IOP keeps going up, something has to give and will give....

IOP keeps going up, something has to give and will give.

24/11/2017:
Platts 62% US$68.45 up US$0.75. MTD US$63.29

Platts 62% Futures:
- November US$63.18 up US$0.15
- December US$67.18 up US$1.01
- Q1 2018 US$67.46 up US$0.94
- Q2 2018 US$66.98 up US$1.08

July - Septemeber Platts 62% average US$70.90
October Platts 62% average US$60.91
November Platts 62% average US$63.29

Let's say using above numbers and average Platts 62% for first 6 months is rounded down to US$67/dmt.

If FMG's FY Guidance is correct at 70-75% and we take 70% as the worst case scenario with 85WMT shipped first 6 month of this FY.

For the first 6 months, we get:
- Revenue US$3667M (67x0.7x0.92x85)
- Underlying EBITDA US$1840M (((67x0.7x0.92)-21.5) x 85)
- Net Cash Flow from Operating Activities US$1585M (((67x0.7x0.92)-24.5) x 85)
- Net Profit After Income Tax US$723M (((67x0.7x0.92)-31) x 85 x 0.7)
- Basic Earnings per Share US$23.2c (723/3113.798) or A$30.6c

If dividend payout is 50-80%, we are looking at interim dividend of 15.3c-24.5c, or 6.6%-10.6% yield at current SP, and THIS IS THE WORST CASE SCENARIO AT 30% DISCOUNT.

These numbers are just NOT matching the current SP. We just need ONE piece of good news, or even just a COMPANY UPDATE saying FMG is getting US$46.9dmt (US$67 x 0.7) for their IO so far this financial year, then you'll watch the SP FLY!

WHO IS GOING SAY NO TO 10.6% YIELD???

DYOR.

Frank.