FMG expects to produce a conservative 55mt this year with an average grade of 60% fe.
the current benchmark price is $144 USD per tonne.
lets assume that the benchmark price falls by 25%, ie to $108 USD per tonne.
lets assume the long run AUD/USD rate is $0.75.
lets assume that FMG's debt of $3b AUD is charged 10% pa in int.
lets also assume that all FMG's customers dont increase or decrease consumption and that they all pay their bills.
one last assumption, assume that FMG's cost per tonne is $25 AUD.
so they will produce 55mt x 60% x {($108/$0.75)-$25} = 33mt x $119 AUD per tonne = $3.927b AUD in profit from the ore sales.
less the int of $3b x 10% = $300m AUD.
Therefore FMG should still make $3.927b - $300m = $3.5b AUD.
for FMG's price to fall further the fe price will have to really collapse. remember that the spot price was $200 USD per tonne last year, so the fall in benchmark prices wont be as drastic as the spot market. i think 25% is quite reasonable.
so $3.5b of EBIT x 4 = $13.4b. If FMG is trading around this level then it quite attractive, if the benchmark price falls further than 25% or the AUD goes back over $0.75 then the price will weaknen, BHP is still trading on a forward PE of 6x.
so i suggest all you doom and gloomers out there look at the fundamentals first, then try and work out a fair entry level.
- Forums
- ASX - By Stock
- lets work out fmgs cash flow
FMG expects to produce a conservative 55mt this year with an...
-
- There are more pages in this discussion • 27 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add FMG (ASX) to my watchlist
|
|||||
Last
$21.41 |
Change
-0.260(1.20%) |
Mkt cap ! $65.92B |
Open | High | Low | Value | Volume |
$21.52 | $21.67 | $21.30 | $150.5M | 7.000M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
1 | 93 | $21.40 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$21.41 | 12657 | 3 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 93 | 21.400 |
2 | 3150 | 21.350 |
1 | 200 | 21.330 |
2 | 1046 | 21.320 |
1 | 1000 | 21.310 |
Price($) | Vol. | No. |
---|---|---|
21.420 | 1200 | 1 |
21.450 | 1500 | 1 |
21.510 | 2020 | 1 |
21.520 | 951 | 1 |
21.530 | 1500 | 1 |
Last trade - 16.10pm 28/06/2024 (20 minute delay) ? |
Featured News
FMG (ASX) Chart |
The Watchlist
LU7
LITHIUM UNIVERSE LIMITED
Alex Hanly, CEO
Alex Hanly
CEO
SPONSORED BY The Market Online