FLX - Felix Resources

[michael_selway]

Felix Resources recovered to close at $22.03 after the big sell off in recent weeks. After thermal coal went above US$160 a tonne and talk on Bloomberg of the price reaching US$180 or more, later this year: Felix may well continue to follow the coal price up.

Hi Noirua, how high do you think Thermal Coal prices can go, and how long can it sustain aroudn those highs?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 64.8 234.4 155.7
DPS 6.0 11.8 16.7 15.6

thx

MS

 

[noirua]

Felix Resources MD Mr Brian Flannery has said, in an ASX announcement, "that the companies gross profits to the year 30/6/2008, will be in the range of $220 to $240 million, - the figure includes profits of $120 million from asset sales" of $160 million which sees trading profits in the range $100 to $120 million.

 

[noirua]

Hi Noirua, how high do you think Thermal Coal prices can go, and how long can it sustain aroudn those highs? thx MS

Hi m_s, much depends on the value of the US Dollar that I think is due for a sharp recovery as Europe moves towards recession. Lots of coal piled up in Aus with infrastructure and Ports too small for the coal capacity needed. China needs all its coal with so many coal fired power stations opening up.

My bet is that the oil price will tumble to around US$100 per barrel later this year. Coal prices for thermal will push on to US$180 per tonne or even US$200 per tonne, set at US$125 per tonne for 2008 deliveries, but will fall back by 2010 when all the new ports are developed, and China develops its new bigger coal mines to replace the small ones, and slows down on the opening of new coal fired power stations.
Analysts are going for US$135 per tonne for thermal in 2009 and that may well be the peak.

 

[noirua]

Felix have suffered quite a fall and most of that on the MCC takeover talks coming to an end with the overpriced comment.
Coal prices should remain strong, but many coal stocks are being priced on production as long as 6 years from now and Felix is very much one of these.
Profits for 2008 should see an after tax figure of around $200 to $220 million, as previous losses reduce the tax figure. A final dividend of around 15 cents, making 18 cents for the year, would cost about $35.3 million in total.
Profits for 2009 should see the after tax figure in the range $210 to $250 million. A dividend of around 40 cents, costing $78.4 million, could easily be afforded.

Higher dividends could not be paid as Felix will need about $330 million for their share of the open-cut and longwall mine developments and land purchases at Moolarben.

2010 should see coal production rise from 5.2 million tonnes to around 7 million tonnes as extra PCI coal is sold from Yarrabee and Moolarben starts production.
Easy to forecast an after tax profit in the range $300 to $350 million and a dividend of $1 costing $200 million.
HOWEVER, the coal price and the value of the Greenback is vitally important here and may cause this forecast to be a longway adrift.

2011 should see production at 10 million tonnes, 2012 around 13 million tonnes and Felix's own forecast of eventual production around 16 million tonnes.

 

[Muschu]

What an intriguing world the share market is - and frustrating [at least for a novice like me].
Recently I took a small hold in GCL and it has improved a tad and held its own last week. At the same time I had been considering FLX but decided against it - and it took a 20% drop last week.
Are there any TAs out there who are interested in commenting on what the FLX charts are telling them at this time?
Regards
Rick

 

[noirua]

Felix ship thermal and semi-soft coking coal from their mines at Ashton in the Hunter Valley.

Australia's Newcastle Coal Price Rises to Record $172.10 a Ton By Leony Aurora June 28 (Bloomberg) -- Power-station coal prices at Australia's Newcastle port, a benchmark for Asia, jumped to a record for a fifth week as demand for the fuel surged in countries including India and China.

Coal prices at the New South Wales port, the world's biggest export harbor for the fuel, rose $9.44, or 5.8 percent, to $172.10 a metric ton in the week ended June 27, according to the globalCOAL NEWC Index.

 

[noirua]

Interesting now as all eyes move to the Macarthur Coal situation, where the shares are in trading halt.
The main interest at Felix Resources remains with the Moolarben Project where the NSW Appeals court have taken a month deliberating over Ulan Coal's appeal over their land within Moolarben.

 

[noirua]

The coal sector has taken a thumping and this is mainly due to the debacle that reads Macarthur Coal. MD, Mr Brian Flannery of FLX, has sought to steady nerves in saying that Felix, unlike Macarthur, does not have major shareholders who are likely to consider deals to sell-off and split their holdings.
Providing time shows this to be true, the Felix partial recovery looks on strong ground, however, who can be absolutely sure, not me.

 

[noirua]

Felix Resources are named, with Gloucester Coal, to be Australias most promising coal stocks.

By Jesse Riseborough

July 4 (Bloomberg)

``There is no cause for panic,'' Merrill analysts led by Sydney-based Vicky Binns said in a report yesterday after a 7.2 percent decline in the Bloomberg World Coal Index during the past two days. ``We expect buying opportunities to arise in coming days as the market settles.''

Gloucester and Felix Resources Ltd. are Merrill's favored stocks in Australia, it said. Sydney-based Gloucester rose 70 cents, or 6.6 percent, to A$11.30 at the 4:10 p.m. Sydney time close on the Australian stock exchange. Felix gained 10 percent to A$17.14.

Bottlenecks at Australian ports, together with flooding in Queensland state, helped double coal prices in Australia in the past year. The price of coal from Newcastle port rose to a record for a fifth week to $172.10 a metric ton.

Fundamentally, the international coal markets appear to remain extremely tight, so prices are likely to remain close to record highs,'' Peter Atherton, an analyst at Citigroup Inc. in London, said yesterday in a note report.

 

[michael_selway]

Felix Resources are named, with Gloucester Coal, to be Australias most promising coal stocks.

By Jesse Riseborough

July 4 (Bloomberg)

``There is no cause for panic,'' Merrill analysts led by Sydney-based Vicky Binns said in a report yesterday after a 7.2 percent decline in the Bloomberg World Coal Index during the past two days. ``We expect buying opportunities to arise in coming days as the market settles.''

Gloucester and Felix Resources Ltd. are Merrill's favored stocks in Australia, it said. Sydney-based Gloucester rose 70 cents, or 6.6 percent, to A$11.30 at the 4:10 p.m. Sydney time close on the Australian stock exchange. Felix gained 10 percent to A$17.14.

Bottlenecks at Australian ports, together with flooding in Queensland state, helped double coal prices in Australia in the past year. The price of coal from Newcastle port rose to a record for a fifth week to $172.10 a metric ton.

Fundamentally, the international coal markets appear to remain extremely tight, so prices are likely to remain close to record highs,'' Peter Atherton, an analyst at Citigroup Inc. in London, said yesterday in a note report.

Hi yep, it does appear a grat buying opportunity

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 41.8 218.9 188.3
DPS 6.0 10.7 19.1 21.6

thx

MS

 

[noirua]

After recent events it will be intertesting to see if Felix really do recover on the back of Merrills upgrade. Appeal concerning Ulan coal and Moolarben still awaits the results some 5 weeks after the Judges started deliberating.

 

[noirua]

Felix Resources at the Sydney Mining Club Presentation: http://www.brr.com.au/event/47499
Speech by MD Mr Brian Flannery of Felix Resources.

 

[noirua]

Felix Resources at the Sydney Mining Club Presentation: http://www.brr.com.au/event/47499
Speech by MD Mr Brian Flannery of Felix Resources.

Right now, a very interesting speech that should, in theory, send Felix stock up a couple of dollars. However, markets are so bad now, in certain sectors in Western domains and even in the Far East, that it would take a mighty effort for any stock, in the short term, to resist the trend.

 

[noirua]

Right now, a very interesting speech that should, in theory, send Felix stock up a couple of dollars. However, markets are so bad now, in certain sectors in Western domains and even in the Far East, that it would take a mighty effort for any stock, in the short term, to resist the trend.

Doing their best are Felix Resources after a sudden dip early on. The MD affect is a tad stronger than I thought and the promising low cost Moolarben Project augers well in 2010. Punching their weight are Felix and all this despite spoilers XSTRATA.

 

[noirua]

I hold a lot of Felix stock, that is in regards to the % of my portfolio. The price performance yesterday was impressive earlier but the fall back seems to show, despite the MD's 41 minute speech, which was impressive, that the Merrill comment "we are not convinced that profit taking is over in the sector" is pulling in the opposite direction.

 

[michael_selway]

I hold a lot of Felix stock, that is in regards to the % of my portfolio. The price performance yesterday was impressive earlier but the fall back seems to show, despite the MD's 41 minute speech, which was impressive, that the Merrill comment "we are not convinced that profit taking is over in the sector" is pulling in the opposite direction.

Hi Noirua, thanks hes a great speaker!

He has his own predictions for the future, 30 years coal left in the world....

http://ss01.boardroomradio.com/files/FLX/FLX - 20080703.swf
http://www.brr.com.au/event/47499

Very interesting indeed and he appears quite bullish

thx

MS

 

[noirua]

Hi Noirua, thanks hes a great speaker!

He has his own predictions for the future, 30 years coal left in the world....thx MS

Hi m_s, I've been following Felix longer than anyone still with the company, I think. I have to be honest with you and say, there are errors in the report etc., and very significant.
If you look at the coal production chart it shows a lot of coal produced at Moolarben in the year ending 30/6/2009, NOT SO. Production at Moolarben is now put back to start in 2010 to coincide with the port expansion at Newcastle.
Production shown for 2009 will not be achieved until 2011, 2 years later.
Quite a serious mistake to show production estimates several years out of date.
Confusingly Felix show production from the Yarrabee mine constant at 1.8mtpa until 2012 when the plant is to be expanded with a new washery and coal production should reach 2.8mtpa for the year ending 30/6/2010.
Still further, Felix show full production from their Moolarben underground mine in the year ending 30/6/2012, I'm not saying this is impossible but Mr Brian Flannery and co will need to achieve quite a gallop to get there.

 

[noirua]

Felix Resources has been raised to buy in an article by Bloomberg citing Goldman Sacks. From Bloomberg on Tuesday.

Treasuries rose, with yields on two-year notes dropping to the lowest since May, after Federal Reserve Chairman Ben S. Bernanke said there are ``significant downside risks'' to economic growth.

Dollar Falls Most Against Yen Since March on Bernanke's Remarks
Crude oil tumbled more than $6 a barrel in New York amid concern that a slower U.S. economy will curtail demand for oil and gasoline.
Gold Climbs on Demand for Alternative to Falling Dollar, Stocks...

 

[noirua]

Felix Resources, once owned Way Linggo gold holdings in Indonesia and other assets, thought to have been converted into royalties between 1999 and 2003 (Questions have been raised about this) have once again surfaced. These holdings were once valued at C$300 million and were later of little value due to the slump in the gold price.
This matter has now been raised to Mr Brian Flannery, MD of the company, and hopefully this time the matter will not be ignored.

Further information and very many links to follow.

 

[michael_selway]

Felix Resources, once owned Way Linggo gold holdings in Indonesia and other assets, thought to have been converted into royalties between 1999 and 2003 (Questions have been raised about this) have once again surfaced. These holdings were once valued at C$300 million and were later of little value due to the slump in the gold price.
This matter has now been raised to Mr Brian Flannery, MD of the company, and hopefully this time the matter will not be ignored.

Further information and very many links to follow.

Thanks Noirua, also FLX holding up these few days which is good to see!

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 7.8 45.3 202.5 232.4
DPS 6.0 10.3 19.1 21.6

thx

MS