# EXL - Excel Coal



## nizar (12 January 2006)

Excel is a coal company based in Sydney, Australia. It produces a diverse range of products including thermal coal, hard coking coal, semi-hard coking coal and coke, most of which is sold under contract to major customers in both the export and domestic markets. The Company's export production is shipped through Newcastle and Port Kembla. T

Plans to more than treble production by FY2009 with the development of the Wilpinjong mine and expansions of Wambo and Metropolitan, market conditions and other factors permitting. 

It has several operations, which suprised me as the company is only recently listed....

They include:

Wambo (NSW), whose major long term customers include major Japanese power utilities and international coal traders. 

Metropolitan (NSW): Around 90% of coal produced at the mine is exported under contract to customers in Japan, India, South America and Europe. The remaining product is trucked to domestic customers, including Excel's 50% owned Illawarra Coke. Metropolitan's customers include major steel producers and industrial consumers in Japan, India, Brazil, Germany and Australia. 

It also owns Chain valley (Newcastle) and its WILPINJONG PROJECT which has a 19-yr supply agreement with macquarie generation beginning from 2007...

This company seems to be out of favour in recent times... but look at its forecast earnings growth...

p/e=10.7
      Curr 2006 2007 2008 
EPS 49.3 67.3 96.0 132.7 
DPS 24.0 34.0 48.0 68.5 

7/11 analysts rate it a "strong buy" or "moderate buy" with the remaining 4 a "hold", according to westpac broking research.

its sitting on a yield of 4.8%..


Given that coal, oil and gas produce 95% of world's total energy demands... and oil is getting expensive... do u reckon that means coal will be increasingly favoured as an energy source?

Coz of course uranium is "cleaner", but the laws are strict (in aus), and i dunno if we are ready for wind-power just as yet... 

So could this be a winner in the medium term?


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## Julia (12 January 2006)

*Re: Excel Coal (EXL)*

I bought this May 04 at $2.20 and sold last week just under $6 after several warnings that coal prices are under threat.  However, it seems to be recovering from the downturn.  Some while ago you couldn't see an analyst report that wasn't a Buy.  Now they are somewhat divided.  Large article on yesterday's Courier Mail (Brisbane) re coal prices.

Julia


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## justjohn (12 January 2006)

*Re: Excel Coal (EXL)*

EXL has had a good run over the past 2 years or so up over 350%but with other coal stocks like MCC & CEY nothing much is happening


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## michael_selway (12 January 2006)

*Re: Excel Coal (EXL)*



			
				Julia said:
			
		

> I bought this May 04 at $2.20 and sold last week just under $6 after several warnings that coal prices are under threat.  However, it seems to be recovering from the downturn.  Some while ago you couldn't see an analyst report that wasn't a Buy.  Now they are somewhat divided.  Large article on yesterday's Courier Mail (Brisbane) re coal prices.
> 
> Julia




Hi Julia, what did this article say?

Large article on yesterday's Courier Mail (Brisbane) re coal prices.

Yeah the only danger is Coal Prices Slump, also currently some delays with Excel's Coal best potential mine

Thanks

MS


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## Julia (12 January 2006)

*Re: Excel Coal (EXL)*



			
				michael_selway said:
			
		

> Hi Julia, what did this article say?
> 
> Large article on yesterday's Courier Mail (Brisbane) re coal prices.
> 
> ...




Can someone please tell me how to post a link to a newspaper article?

Michael:

Headline on front page of Business section of Courier Mail yesterday was:
  "WARNING BELLS ON COAL PRICES"
Then two graphs - one of Coal Prices showing Hard Coking and another Steaming:  the other graph Macarthur Coal showing steady decline in SP from $7.50 to $5 in less than six months."'

(Excel's drop was pretty much the same)

I'll just quote a few paras from the article until someone posts a link.

"Australia's multibillion dollar coal sector was yesterday hit with more predictions of falling prices for the commodity used in power stations and steel making.

Reports out of Asia, where miners are undergoing annual negotiations, suggest prices from initial deals could be 31 percent down on last year.

In further bad news BHP Billiton Mitsubishi Alliance admitted its capacity at Hay Point Coal Terminal in Queensland had been reduced by 30 percent after a shiploader was damaged...."

......."Urging caution, they said Queensland based Macarthur Coal would be most affected, with Excel Coal and Centennial Coal also affected.

Julia


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## TheAnalyst (12 January 2006)

*Re: Excel Coal (EXL)*

Hi when you are on the article web page, go to the address bar and right click the actual web address and click on; copy

The when you reply on the forum just right click inside where u usually type your reply or quote, then right click your mouse and then left click paste.


			
				Julia said:
			
		

> Can someone please tell me how to post a link to a newspaper article?
> 
> Michael:
> 
> ...


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## justjohn (12 January 2006)

*Re: Excel Coal (EXL)*

I agree with you nizar the coal sector must be reaching the bottom soon with large companys like Macarther, Centennial & Excel all dropping around the 35-40% mark off there yearly highs but also you wonder why coal is so out of favour at present especially being a major energy source & oil very costly right now, .Macarther & Centennial shedded another 2% today so keep an eye  on these 3


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## Julia (12 January 2006)

*Re: Excel Coal (EXL)*



			
				TheAnalyst said:
			
		

> Hi when you are on the article web page, go to the address bar and right click the actual web address and click on; copy
> 
> The when you reply on the forum just right click inside where u usually type your reply or quote, then right click your mouse and then left click paste.




Hi Analyst
  Thanks.  But I read it not online but in my home delivered hard copy.
  Is there a way of doing it fromthere?


Julia


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## Smurf1976 (13 January 2006)

*Re: Excel Coal (EXL)*



			
				justjohn said:
			
		

> I agree with you nizar the coal sector must be reaching the bottom soon with large companys like Macarther, Centennial & Excel all dropping around the 35-40% mark off there yearly highs but also you wonder why coal is so out of favour at present especially being a major energy source & oil very costly right now, .Macarther & Centennial shedded another 2% today so keep an eye  on these 3



Coal versus oil. 

Oil - Limited resources in the ground which limits production capacity and much of it is located in politically unstable countries.

Coal - Still plenty in the ground so it's just a matter of developing the mines and infrastructure. And there's far less of an issue with political stability.

Also it's relatively difficult politically to get approval to use coal in the first place. Getting approval to use oil is as simple as buying a car or booking a flight.


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## trader (17 January 2006)

*Re: Excel Coal (EXL)*

EXL went up alot on the back of their ann that they signed a new contract
but now back down again because they didn't say what price they got,
you could easily sign a contract for a billion tonnes if you sold it for a dollar
a tonne.


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## michael_selway (17 January 2006)

*Re: Excel Coal (EXL)*



			
				trader said:
			
		

> EXL went up alot on the back of their ann that they signed a new contract
> but now back down again because they didn't say what price they got,
> you could easily sign a contract for a billion tonnes if you sold it for a dollar
> a tonne.




yeah i was wondering they mentioned nothing about price per tonne! why?!

17 January 2006
EXCEL COAL SIGNS MAJOR NEW CONTRACTS WITH TAIPOWER AND CARGILL 

Wambo Coal Pty Ltd, a wholly owned subsidiary of Excel Coal Limited (ASX:EXL), has entered into a contract with Taiwan Power Company (Taipower) to supply 3,000,000 tonnes of coal at the rate of 500,000 tonnes per year for six years starting 1 January 2006.

This contract will be supplied by coal from the Wambo mine, located in the Hunter Valley in New South Wales, and will be exported via the Port of Newcastle.

Excel Coal has also entered into a contract with the international trading group, Cargill International SA (Cargill), to supply 1,800,000 tonnes of Excel Blend coal over 3 years, with 300,000 tonnes to be delivered in 2006, 600,000 tonnes in 2007 and 900,000 tonnes in 2008.

This delivery schedule has been specifically tailored to fit with Excel’s planned mine expansions.

This coal will be principally supplied from the Wambo mine and shipped via the Port of Newcastle, but can also be supplemented by production from Excel’s other mines in New South Wales.

This contract provides for a partial prepayment by Cargill of US$40 million, which has been received.

These two new major contracts with Taipower and Cargill, when combined with existing, longstanding contracts with major Japanese utilities, provide Excel with important commitments to support Wambo’s expanded production profile.


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## michael_selway (3 February 2006)

http://www.asx.com.au:80//asxpdf/20060203/pdf/3v9t6709hy8xq.pdf

A late annoucement

Does anyoen knwo it it means to their future NPAT? or has the current price already incorporated that?

--------------------------------------

3 February 2006
Project Approval Granted to the Wilpinjong Coal Project
Wilpinjong Coal Pty Limited (Wilpinjong), a wholly-owned subsidiary of Excel Coal Limited
(ASX:EXL), has received Project Approval for the Wilpinjong Coal Project from the NSW
Minister for Planning, the Hon Frank Sartor, MP.
The Project Approval under Part 3A of the Environmental Planning and Assessment Act 1979 will
permit the construction and operation of the Wilpinjong Coal Project, an open cut coal mine to be
located near Wollar, north east of Mudgee in New South Wales.
The Wilpinjong Coal Project will produce up to 13 million tonnes run of mine coal with up to 8
million tonnes per annum (Mtpa) of coal for domestic power generation and approximately 2 Mtpa
for export markets.
Wilpinjong has engaged Thiess Pty Ltd to construct the mine infrastructure, including a coal
handling and preparation plant and train loading infrastructure, and to operate the mine for the first
five years.
Wilpinjong will invest $116 million to develop the Project. The construction of the Project will
employ approximately 200 people during 2006. The operational workforce will be approximately
100 people thereafter. The construction and operation of the Project will result in a large
contribution to the local, state and national economies.
The mine will become the major supplier of fuel to the Macquarie Generation power stations at
Bayswater and Liddell in the Hunter Valley.
Wilpinjong has a 19 year contract with Macquarie commencing in January 2007, with up to 7 Mtpa
to be supplied, to a total of approximately 120 million tonnes over the contract term. The mine has
an additional three year contract with Macquarie commencing in 2006 for a further 500,000 tonnes
per annum.
“We are extremely pleased by the Minister’s decision to award Project Approval to the Wilpinjong
Project,” Excel Coal Managing Director Mr Tony Haggarty said.
“We believe the project will make a significant contribution to the local economy, as well as the
New South Wales economy.
“We are committed to fulfilling our social, environmental and corporate responsibilities and look
forward to working with the Mudgee community to enhance the region’s attractiveness as a place to
live and do business.”
The grant of Project Approval follows a two year period in which Wilpinjong has completed an
exploration programme, preparation of a conceptual project development plan, and extensive
environmental assessment studies.
The Project Application and Environmental Assessment have been evaluated by the Department of
Planning. Some aspects of the Environmental Assessment have been assessed by an Independent
Hearing and Assessment Panel appointed by the Minister.
This evaluation has resulted in a Project Approval which includes a number of stringent
environmental protection conditions. These conditions will ensure that the Wilpinjong Coal Project
is constructed and operated to manage and minimise impacts on the local environment and
community.
Wilpinjong has also made application to the Minister for Mineral Resources for the grant of a
mining lease for the Wilpinjong Coal Project. The grant of Project Approval was the major
outstanding pre-condition for the grant of the mining lease and Wilpinjong expects the mining lease
to be granted in the near future.

thx

MS


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## Dutchy3 (3 February 2006)

Hi Michael_Selway

Couple of BIG WHITES on relatively heavier volume. If I was long I'd hold. The 820 -830 area could be an issue again. The price and volume action will indicate when the run is over.

I'd never have taken a position in this one as the move north occured from a base I could not recognise, and the breakout came out of the blue. I'm very particular with those stocks that make my watchlist and have very narrow view of what is acceptable. Helps me cut down on the dumb entries ... does not eliminate them though!


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## michael_selway (7 July 2006)

Dutchy3 said:
			
		

> Hi Michael_Selway
> 
> Couple of BIG WHITES on relatively heavier volume. If I was long I'd hold. The 820 -830 area could be an issue again. The price and volume action will indicate when the run is over.
> 
> I'd never have taken a position in this one as the move north occured from a base I could not recognise, and the breakout came out of the blue. I'm very particular with those stocks that make my watchlist and have very narrow view of what is acceptable. Helps me cut down on the dumb entries ... does not eliminate them though!




ONE of Australia's last independent coal companies is about to disappear, Excel Coal directors having given their blessing to a $1.83 billion offer from US coal group Peabody Energy Corp.

But some in the market raised the likelihood of a higher offer from a third party, believing the Peabody offer undervalues Excel.

The deal will give Excel shareholders $8.50 cash per share, delivering handsome profits for a company that floated at $2 in May 2004. Six directors, including chief executive Tony Haggarty, who collectively control 47 per cent of the company, will walk away with profits of $656 million from the company they created.

Excel and Peabody have signed a merger implementation agreement which must now be voted on by shareholders. Excel directors will be able to vote and a resolution must get 75 per cent support to be binding.

Peabody is a global company fuelling 10 per cent of US power generation with 9.5 billion tonnes of coal reserves. In Australia it has four Queensland mines and the Excel purchase will deliver it new mines in the Hunter Valley and Bowen Basin.

*There was controversy over the deal when Excel announced it was expecting a full-year profit of $120 million for 2006-07 - when the market had been expecting a figure closer to $160 million. That led to suspicions that a bid based on the lower figure would undervalue Excel.*

"I haven't had any feedback along those lines," Mr Haggarty said.

Those saying the valuation was too low must have been factoring in high coal prices for the next 20 years in what till now had been a cyclical industry. "You have to ask if that's realistic," he said.

Tim Gerrard, an analyst with Austock Brokers, said he did not think the bid was undervalued. "Our net present value figure is $7 per share," he said. "We think we're at the high point of the coal cycle and prices will adjust to a more normal level over the next two years."

The prospect of an overbidder couldn't be counted out if other groups take a more bullish view on coal prices. "In this sort of market anything is possible," Mr Gerrard said.

Rob Patterson, of Argo Investments, a major Excel shareholder, said: "To some extent I'm disappointed. We've been trying to build resources exposure but now we're about to lose it."

Mr Patterson did not believe the bid undervalued Excel. Given the profit forecast shock, "without the bid the share price would have fallen today", Mr Patterson said.

Peabody had first approached Excel in mid-May and the board had made a quick decision because of the bid's attractiveness, Mr Haggarty said. The bid valued Excel at a multiple of 18 to 19 times expected earnings for last financial year and a 24 per cent premium on a $100 million capital raising made in February.

A Peabody bid would have to get Foreign Investment Review Board approval.

Mr Haggarty said he did not feel sentimental at the thought of the company passing into American hands.

http://www.smh.com.au/news/business...to-18b-us-offer/2006/07/06/1152175726119.html
http://www.smh.com.au/news/Business/Excel-undervalues-bid-by-2-analyst/2006/07/06/1151779052226.html

Earnings and Dividends Forecast (cents per share) 
2005 2006 2007 2008 
EPS 49.3 47.8 75.0 108.9 
DPS 24.0 24.0 37.8 54.0 

EPS(c) PE Growth 
Year Ending 30-06-06 47.8 17.6 -3.1% 
Year Ending 30-06-07 75.0 11.2 56.9% 

120mil/100mil = 1.25 or 25% growth next year, but consensus market is saying 56% growth, strange

thx

MS


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## michael_selway (19 September 2006)

Funny today, who would have thought the rival bid was itself? ie Peabody?

http://www.smh.com.au/news/business...-for-excel-coal/2006/09/18/1158431643611.html
http://www.smh.com.au/news/BUSINESS...n-revised-offer/2006/09/19/1158431682521.html

Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 47.9 56.2 93.7 105.4 
DPS 23.5 27.9 46.6 51.9 

thx

MS


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## 3 veiws of a secret (19 September 2006)

Alright hindsight wins another day with me! sold out EXL @ $8.70 ??? and was going to jump in again on fridays  close of trade ( I think it got down to $8.41??? very tempting at the time) . What a regretful dill I've been! Looks like the monkey never got onto my shoulder! For those who held on I bow to your patience. I've got a splitting headache


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## Julia (19 September 2006)

3 veiws of a secret said:
			
		

> Alright hindsight wins another day with me! sold out EXL @ $8.70 ??? and was going to jump in again on fridays  close of trade ( I think it got down to $8.41??? very tempting at the time) . What a regretful dill I've been! Looks like the monkey never got onto my shoulder! For those who held on I bow to your patience. I've got a splitting headache




You're not alone here, 3 views.
I sold out some months ago in the face of a then poor outlook for coal.
Made a good profit and had no regrets.  Until today!!!  Great for holders of EXL.  Good for you.

Julia


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## michael_selway (20 September 2006)

Julia said:
			
		

> You're not alone here, 3 views.
> I sold out some months ago in the face of a then poor outlook for coal.
> Made a good profit and had no regrets.  Until today!!!  Great for holders of EXL.  Good for you.
> 
> Julia




I hold   

http://www.smh.com.au/news/business/peabody-lifts-offer-for-excel/2006/09/19/1158431710682.html



> Peabody lifts offer for Excel
> Jamie Freed
> September 20, 2006
> 
> ...




Will there be a higher bid? $10 or $10.50 maybe?

Forward Terminal PE wise its still cheap, and thats excluding synergies if merged

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 47.9 56.2 93.7 105.4 
DPS 23.5 27.9 46.6 51.9 * 


thx

MS


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