FY2018 Report

Been reviewing the HY report from February and the two subsequent quarterlies to see what can be deduced... Basically the FY report is going to look terrible, borrowings are going to increase to ~$190M, however its the Sept forecast for sustained positive EBITDA with significant accumulated losses which is appealing...

At 30th December 2017 TER;
- $1M in the bank, $11.5M in receivables, $11.8M in coal stock
- $175M in significant borrowings ($15M super senior note A, $141M Euroclear bond, $6.4M super senior note B, $12M working capital)
- Completed $15M capital raise at $0.215 (Partial super notes payment + BA TLO construction)
- Hold $180M in accumulated losses

At 30th July 2018 TER (what we know);
- Took out further $15M loan with SBI for house acquisitions ** Total $190M in borrowings
- $13.9M in the bank, $13.5M in receivables, $36.1M in coal stock **Increase of $39.2M
- $US4.3M paid for Euroclear notes interest, PIK 50%, quoted as last time TER will PIK interest
- Still hold $180M in accumulated losses

Look Ahead for Sept TER;
- $38.3M EBITDA after corporate overheads, income tax will be $0 because of accumulated losses, so we need look only now at the interest payable on the various borrowings
- Super Senior Note A: $10M payable on 30th October + interest of $1.5M on 30th October
- Super Senior Note B: $4.2M payable on 30th October + interest of $0.625M on 30th October
- Euroclear bond: $8.7M payable every 6 mnths, next due on 30th Dec  (Half paid half PIK those due in June 2018)
- Euroclear bond: $181M payable on 30th June 2021 - so we have 3 years to work on paying this down

So this says to me, come September the company should be able to fully repay the Super senior notes A&B (totaling $16.5M) and also pay the interest on Euroclear ($8.7) out of EBITDA from Sept quarter - this will leave $13.1M left over to cover the other facilities including the dragline and other working capital... So basically the story for TER although not rosey now will begin to turn quickly by September.

If we lock in $10M EBITDA in Sept quarter left over + $36.1M inventory (as of June 30) + $11.5M in receivables (as of June 30) this equals to $57.6M potential cash in the bank forecast for 30th September 2018...

So I am tipping the following;
- Terrible FY report, pressure on the SP in the short term
- Sept quarterly repayment of $35M of Euroclear bond ($22M retained for BNU CHPP and drilling)
- Yearly liability decrease to $7M p.a. due to reduction in bond + SBI refinancing at 6-7%
- Poised for liftoff and potential maiden dividend for H2 2018/19
- Any re-rate or caomparison to WHC or NHC cannot really be made until the Sept quarter is over and we recieve confirmation that TER has successfully repaid the Note A & B facility.