Australian (ASX) Stock Market Forum

FLX - Felix Resources

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Reefer said:
Half yearly's out and are up to expectations.

28 February 2008
Australian Securities Exchange
Company Announcements
Level 4
20 Bridge Street
Sydney NSW 2000
FELIX ANNOUNCES RECORD HALF YEAR PROFIT
Felix is pleased to advise shareholders that it has posted a record profit for the half year ending December 2007.
The result is a profit before tax of A$68.8 million made up of an $18.9 million operating profit and $49.9 million abnormal profit due to the payment by Sojitz of the second tranche of its Moolarben 10% purchase following grant of mining leases.
The directors are pleased to announce the payment for the first time of an interim dividend of 3 cents per share unfranked.
This result relates to a NPAT of $50.6 million although no tax is payable due to accumulated tax losses and R&D allowance.
The Managing Director of Felix, Brian Flannery, said the result is very pleasing despite some $4.5 million paid out in demurrage. We have also completed, this week, the sale of a further 10% of Moolarben to the “Korean Consortium” which was previously announced on 2 January 2008. This transaction will result in Felix receiving approximately A$90 million during February/March. We have also signed five coal supply contracts with Korean power companies for a total of 2.8mtpa commencing second half 2009. The contracts will be for the life of Moolarben and price negotiated each year.
By the end of March, Felix will be in a strong financial position with some $170 million in cash and a total bank debt of $96 million of which $57 million is non-recourse. The profit from the Korean transaction will be taken up in the second half and this combined with substantial coal price increases augers well for our full year profit.
Key highlights:
• Record before tax profit of $68.8 million
• First interim dividend paid by Felix of 3 cents per share unfranked
• Substantial cash reserves for Moolarben development
• Negative nett debt
• Strong increase in coal prices for 2008/2009
• 480,000 tonnes of thermal coal sales hedged for calendar 2009 at an average selling price of US$101.69/tonne
• Substantial increase in resources for Ashton open cut semi-soft coking coal and Yarrabee open cut PCI coal as per the attached statement
• Feasibility study for expanding Yarrabee PCI production including a small coal preparation plant documented for March/April board discussion.
• Minerva production YTD exceeds budget of 2.5mtpa despite wet weather delays
Felix Resources Limited ABN 75 000 754 174
Postal: PO BOX 10470 Brisbane Adelaide Street QLD 4000 Delivery: 316 Adelaide Street Brisbane QLD 4000 Australia
T (61-7) 3248 7900 F (61-7) 3211 7328 E admin@felixresources.com.au W www.felixresources.com.au
• Ashton longwall production slightly behind budget YTD due to a hard two metre vertical dyke encountered in centre of current panel. Expect another 7 weeks of lower retreat rates. Development of third panel well advanced.
• Additional exploration licences No. 7073 &7074 granted at Moolarben. Exploration to commence in next period over this 1145 hectares.
• New coal terminal at Newcastle (NCIG): under construction; dredging underway; shiploader under fabrication with delivery February 2009; stacker reclaimers under fabrication with delivery to site late 2008; and port commissioning early 2010
• Demurrage at Gladstone is decreasing although there are some delays with multi producer shipments which has a flow-on effect for Yarrabee shipments as Yarrabee customers tend to ship in multi producer shipments.
• Demurrage at Newcastle remains high and unacceptable even though the vessel queue reduced from 75 in July 2007 to around 30 in early 2008. Mr Greiner, previously Premier of New South Wales, chairing meetings of producers to attempt to find common ground to divide up the port capacity for 2008-2010.
Click to expand...

Hi first ever dividend, yay!

thx

MS

First interim dividend paid by Felix of 3 cents per share unfranked
 
See our hedged price for thermal coal is $101 USD for calendar 2009 so Noirua was spot on with his estimate of agreement prices. Think he must have a mole on the board. haha.
Felix also announced substantial increase in resources for Ashton open cut semi-soft coking coal and Yarrabee open cut PCI coal, and we have $170 mill in the jar ready to plough into the Moolarben start up (or pay the costs of the court battle).
All looking good imo.
 
I have to try and be careful what I say, as the 29 fold increase in Felix Resources, since 2003, has made the company a high percentage of my portfolio.

A price around $11.00 is looking for a dividend, be it 4 years away, of around 60 cents a share and a forward PE ratio of around 6. That is looking for profit, after tax, of around $360 million for year ending 2012. IMHO

Felix need to find about $280 million to develop the open-cut mines at Moolarben and the underground mines. They have $170 million in the bank but have over $90 million in loans. That means they need $200 million more or if they maintain the loans, just over $100 million more.

How much profit to be added in the second half of 2008, to June 30th 2008? Well, about $72 million from asset sales, ( $90 million in the bank) after taxation. Extra profit from Minerva sales and high Ashton and Yarrabee prices in the last quarter, should see a trading profit at $70 million for the second half against about $20 million in the first half.
Cash in the Bank at 30/6/2008 should reach $300 million, enough to pay down the $90+ million in loans.
Profit for Y/E 30/6/2008 should reach around $210 to 250 million before tax.

Thus, the Felix 80% development cost of $280 million for Moolarben looks only a very small risk indeed.

Everything is now on a go ahead at Moolarben in 2009. Costs at the mine are very low and were at AUS$30 a tonne in 2005 and may have esclalated to AUS$40 - $42 a tonne by 2009. Felix should have attributable coal from the open-cut mine at 3.2mtpa by Y/E 30/6/2010, rising to 8mtpa by 2012.
 
Felix Resources jumped to $10.87, up 97 cents, in what was brisk trading for this normally lightly traded stock.

Felix are thought to have sold larger tonnage of coal from the Minerva mine in the last month, from Gladstone shipping records, at market prices. This was after several miners declared false majeure in Queensland after bad weather. An upgrade at the washery at the Yarrabee mine, QLD, has meant increasing availability of coal as PCI coal.
Felix mines escaped the flooding.
 
noirua said:
Felix Resources jumped to $10.87, up 97 cents, in what was brisk trading for this normally lightly traded stock.

Felix are thought to have sold larger tonnage of coal from the Minerva mine in the last month, from Gladstone shipping records, at market prices. This was after several miners declared false majeure in Queensland after bad weather. An upgrade at the washery at the Yarrabee mine, QLD, has meant increasing availability of coal as PCI coal.
Felix mines escaped the flooding.
Click to expand...

Yeah some of these coal stocks have really held their ground in this bearish market, which is good to see. Noirua, are u holdign FLX for the longer term or plan to sell it it gets "high"?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 33.4 97.3 117.2
DPS 6.0 9.8 11.6 12.7

thx

MS
 
michael_selway said:
Yeah some of these coal stocks have really held their ground in this bearish market, which is good to see. Noirua, are u holdign FLX for the longer term or plan to sell it it gets "high"?
MS
Click to expand...
Hi m_s, FLX are already high and I'm gambling by holding on to a stock that has gone up by 28 times its 2003 low. I've held Felix for nearly 25 years so maybe that's the longer term.
I believe there are some families that have held the Alliance Trust since 1888, that makes it 120 years.
 
Felix Resources stock has experienced a sudden change in the pattern of trading this week, after suffering very light trading for over 1 year.
Yesterday rose 90 cents before closing up just 10 cents. Trading today up 95 cents, at $10.93, but patches of weakness appearing, followed by sudden renewed strength.
Felix are a very tightly held stock with former White Mining shareholders with nearly 50% and AMCI with 19.2%. Felix hold about $180 million in cash with debts totalling $96 million.
 
Felix Resources was very weak early on falling $1.10 to $9.47. A large order arrived for 2 million shares and took all available stock off the fence at $10.25.
Felix trading has been unusually volatile this week after a long quiet period.
Trading has now gone quiet as buyer appears to have withdrawn.
 
noirua said:
Felix Resources was very weak early on falling $1.10 to $9.47. A large order arrived for 2 million shares and took all available stock off the fence at $10.25.
Felix trading has been unusually volatile this week after a long quiet period.
Trading has now gone quiet as buyer appears to have withdrawn.
Click to expand...

The final tally was just over 2 million shares last Thursday that went through at $10.25.
Felix now trade well up at $10.90 only just off their 2008 high.
The first of the two outstanding Court cases will take place in April at The NSW Supreme Court of Appeal - Ulan Mining (10% Mitsubishi and 90% Xstrata) appeal the decision in favour of NSW Government and the second defendant, Moolarben Coal ( 80% Felix Resources, 10% Sojitz and 10% Korean Consortium).
 
Felix Resources have continued their bullish ways and stopped just a tad short of the $12.00 mark at $11.95, up 95 cents.

I'd like to post a rumour or some brilliant news, but there appears nothing that is not known already.
Xstrata and Vale seem to have given up on their merger plans, but Felix with a $2.3 billion market cap are only in the minnow market compared with these giants.
 
Felix Resources MD, Mr Brian Flannery, outlined in his last Half Year report, last month, the increased reserves at Yarrabee and Ashton Mines. In particular the longer term possibilities of the reserves at Yarrabee North where exploration is continuing.
The Athena Prospect, near Minerva, is also being evaluated as a longer term mine with inferred resource around 560 million tonnes of thermal coal, similar to that of Minerva.
South Australian tenements are also being explored where there is mineralization and 5 billion tonnes, inferred resource, of sub-bitumous coal.
Felix Resources closed at a 2008 high of $12.04, up $1.04 on the day.
 
noirua said:
Felix Resources MD, Mr Brian Flannery, outlined in his last Half Year report, last month, the increased reserves at Yarrabee and Ashton Mines. In particular the longer term possibilities of the reserves at Yarrabee North where exploration is continuing.
The Athena Prospect, near Minerva, is also being evaluated as a longer term mine with inferred resource around 560 million tonnes of thermal coal, similar to that of Minerva.
South Australian tenements are also being explored where there is mineralization and 5 billion tonnes, inferred resource, of sub-bitumous coal.
Felix Resources closed at a 2008 high of $12.04, up $1.04 on the day.
Click to expand...

Hi Noirua, yep these coal stocks keep setting new highs, plenty of reserves for FLX.

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 41.1 112.9 141.4
DPS 6.0 9.8 18.0 12.6

Date: 29/2/2008
Author: Stephen Wisenthal
Source: The Australian Financial Review --- Page: 76
Felix Resources has reported a 12 per cent rise in first-half profit to $A50.5million. Pre-tax operating profit improved to $A18 .9 million over the sixmonths to 31 December 2007. The company expects work on its Moolarben coal minein the New South Wales Upper Hunter region to commence in June 2008. Felixshares closed $A0.10 higher on 28 February, at $A11.20. Meanwhile, WhitehavenCoal has posted a $A372,000 loss for the six months to 31 December 2007.Whitehaven stock closed at $A3.55 on 28 February 2008, a $A0.20 fall
Click to expand...

http://sog.globalcoal.com/images/sog/27_3_2008_weekly.gif
Click to expand...
 
michael_selway said:
Hi Noirua, yep these coal stocks keep setting new highs, plenty of reserves for FLX.
Click to expand...

Hi m_s, I have hunted around the internet, newspapers and a few other contacts about Felix Resources.

I believe there was some talk, this has been running on for years though, that there were rumours again about a tie-up with MCC.
Felix market cap at $12.04 is around $2.3 billion and Macarthur's at $13.58 is around $2.9 billion: That does not really look likely to bring about a bid situation.
Macarthur suffered badly in the floods, though both companies are strong in PCI coal, particularly MCC, in QLD.
The substantial holders in Felix have 70% of the company and are unlikely to see that much of a benefit by joining MCC, IMHO.
 
For some reason Felix Resources is not a very popular stock on ASF despite having achieved a 33-fold increase since 2003 and trading around $12.25 today.
Felix have moved from a minnow market cap of $25 million to around $2.3 billion in under 5 years. Now the seventh largest miner in Australia.

Managing Director Mr Brian Flannery has moved from a quite ordinary Aussie Director of a coal mining company to one of the richest people in Australia.

No way of guessing the road ahead for certain but today Coal is King.
 
noirua said:
For some reason Felix Resources is not a very popular stock on ASF despite having achieved a 33-fold increase since 2003 and trading around $12.25 today.
Felix have moved from a minnow market cap of $25 million to around $2.3 billion in under 5 years. Now the seventh largest miner in Australia.

Managing Director Mr Brian Flannery has moved from a quite ordinary Aussie Director of a coal mining company to one of the richest people in Australia.

No way of guessing the road ahead for certain but today Coal is King.
Click to expand...

Hi Noirua yes i agree, btw how do u know FLX is the 7th largest Australian miner? :)

thx

MS

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 41.1 112.9 141.4
DPS 6.0 9.8 18.0 12.6
 
11.07am and about to say goodbye to the $12 range. Volumes have been increasing over the last month or so, think something is in the wind. Possibly Chinese interests securing future supplies, Xstrat having a dip, who knows.
No change in significant holding notices so perhaps the buying is across the board. Tax department is going to love this when we eventually sell.
 

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