FMG - Fortescue Ltd

[Value Collector]

Looken a little shaky.

I wouldn't put to much weight in forecasts of price, FMG is profitable at those prices anyway.

The half year results are due some time next week, I wouldn't be surprised if they are better than the Bears think, we should see a bump in the share price I think.

 

[Wysiwyg]

Yes the news and forecasts can be confusing but as was mentioned FMG can still run at a profit at these low ore prices. That being the case then sentiment will play a role as to where the low is because looking down the track at India and its proximity to W.A. makes a lot of sense for a long term hold on FMG. The wait in years until demand gains momentum again is a deterrent for me but $2.25 and lower is very tempting to start accumulating in my opinion only. Being a small gap at $2.25 - $2.30

 

[Value Collector]

Yes the news and forecasts can be confusing but as was mentioned FMG can still run at a profit at these low ore prices. That being the case then sentiment will play a role as to where the low is because looking down the track at India and its proximity to W.A. makes a lot of sense for a long term hold on FMG. The wait in years until demand gains momentum again is a deterrent for me but $2.25 and lower is very tempting to start accumulating in my opinion only. Being a small gap at $2.25 - $2.30

I don't think you have to wait years to see a profit on this one, if they can make $10 a tonne profit, they will be worth well over $6 per share.

 

[burglar]

... looking down the track at India and its proximity to W.A. makes a lot of sense for a long term hold on FMG. ...

I hope you are right about India.
Though any country will do!!

 

[notting]

According to the market, at first it looked bad, then it looked good for a little while, now it's worse than the bad it first thought it looked like.
It could be bad, real bad, if dividend holders treat it like they have everything else that has cut.
Then of course, there is this -

12:57pm: A senior government official in Beijing has likened conditions in China to those that existed in the lead-up to the 1997 Asian financial crisis, as capital flight gathers pace in the world's second-biggest economy.

Guan Tao, the director of international settlements at the State Administration of Foreign Exchange (SAFE), sounded the warning even as the government continues to stress the economy is stable.

"My personal view is that the domestic and foreign situation facing China looks more and more like the Asian financial crisis," he told a conference over the weekend. "We can sense the atmosphere of the Asian financial crisis is getting closer and closer to us."

SAFE sits under China's central bank and is responsible for managing the country's $US3.84 trillion in foreign reserves.

Guan said the crisis-like symptoms were showing up in the foreign exchange markets, as capital continued to leave China at ever greater rates.

Officially $US20 billion left the country in December, but many believe the real figure could be four times that level if money taken out through grey channels was included.

This capital flight has shown up in China's foreign reserves, which have declined by $US150 billion or around 3 per cent over the last six months.

Read more: http://www.smh.com.au/business/mark...eek-slammed-20150217-3qbvv.html#ixzz3RyLnyYab

It's bad.

 

[Wysiwyg]

if dividend holders treat it like they have everything else that has cut.

The question is why bother with a company that is up to its eyeballs in debt and making a foreseeable small margin of profit in the future. Day traders love it.

 

[notting]

Why bother?
I think you answered your own question.

Day traders love it.

 

[notting]

As if RIO and BHPs excessive expansions weren't enough But wait. There's more -

Gina Rinehart's $10 billion Roy Hill iron ore mine is on track to begin exporting in September 2015 and will have shipped 5 million tonnes by the end of the year, a company executive said.

"We're certainly on budget. We remain ahead of overall schedule," Garry Torte, chief financial officer of Roy Hill, told Reuters.

The 55-million-tonnes a year mine is expected to ramp up ahead of the company's original 30-month timeline, Korte said.

Read more: http://www.smh.com.au/business/mark...hrough-5900-20150218-3qenm.html#ixzz3S4RYBKYd

 

[nulla nulla]

Are you long or short?

 

[Wysiwyg]

As if RIO and BHPs excessive expansions weren't enough But wait. There's more -

Talk about late for the party. Supply glut and hence low iron ore prices now for the next 10 years? Dumb.

 

[notting]

Are you long or short?

It depends what time of day it is at the moment it seems.
Right now I am short.
Negativity should continue to weigh with 70% cut to dividend and 80% drop in profits.
With no light on the horizon other than some vague hope that the Chinese will stimulate once more before the collapse. But even then the supply side will be too strong.
FMG has 9 Billion in debt and can't moth ball mines due to that if they become unprofitable.
The future is not looking to bright right now.

 

[skc]

Hmmm... what does this mean? 3 days of short covering followed by massive sell down by the holder who made the recall?

 

[notting]

Talk about late for the party. Supply glut and hence low iron ore prices now for the next 10 years? Dumb.

Too busy being a control freak. She should have floated it years ago kept a controlling stake to satisfy her madness in thinking she knows how to run it. At least that way she could have diversified.

RIO is on at 61.8 retrace and BHP is very close.
Could get a little bounce here as BCI, FMG and AGO did for some of the day.
But chances are RIO and BHP will just keep falling, they have really shot themselves in the feet.

 

[notting]

FMG will also extend its $US4.9 billion term loan to December 2021 and may pay a minimum yield of 5.5 per cent, the person familiar with the deal told Bloomberg, up from the current 3.75 per cent and at the higher end of the range it had been expected to pay. The deadline to agree to the extension was pushed out to March 17 from March 13, the company said.

Read more: http://www.smh.com.au/business/mark...roled-rally-20150317-3s9ld.html#ixzz3UbJ4OotZ

Yikes!

 

[notting]

Yikes!

No one wants the bonds!!
Oh no. Equity issue? I donno. A dollar maybe?
Doing nothing would probably be the best thing at the moment but now they have let the cat out of the bag, doing nothing will not help the stock price.

 

[notting]

Just broke out of the mornings high and it seems some shorters are getting out quick.
Not sure why, perhaps Twiggy has got another financing deal penned.
Watching closely.

 

[notting]

Bit of selling there on the close to keep it in short zone!

Fortescue needs iron ore prices above $US70/tonne to be able to repay debt through cash flow, Morgan Stanley analysts say.

Analysts and shareholders are back studying the iron ore miner's balance sheet after the failed $US2.5 billion ($3.2 billion) debt deal.

"Even if a refinancing were possible, FMG makes modest FCF on spot iron ore prices, restricting its ability to repay its debt should spot prices persist," the analysts told clients on Thursday morning.

Read more: http://www.smh.com.au/business/mark...-100b-stock-20150319-3sf88.html#ixzz3Uo7bCuCH

 

[Knobby22]

It will be sad to see this company fail when it has got so close to success.
I am wondering more about Gina's mine and whether it has a future.

 

[notting]

Andrew Forest has always had a question mark sitting on the top of his head despite the charade of success that FMG seemed to be.

Anything that runs on massive debts, other peoples money, from some redneck from the bush with a highly questionable track record prior, is not a success story until the debt is under control and FMG's has never been under control in realistic terms.

If you had run a very clear ruler over this thing during the GFC you would have found it hard not to stamp one word on it's report card - insolvent.

They probably should have declared it and the only thing that saved it was the huge stimulus undertaken by China which popped up IO prices for the medium term to give FMG the best possible chance it had to get that tag off its financial state.

The team did as good a job as you could expect, and should expect in the face of it's real situation, in the breathing space offered to it, as luck would have it, but even with all that it's paid off and restructured, it is still yet to get ahead of the tsunami of debt over running it.

This whole Mindaroo charity thing has always seemed like a bloke trying to paint himself as a pillar of society when in reality he may turn out to have been a rather overenthusiastic opportunist, nothing more, than a salesman and the founder of another failed company of other peoples money.

Mindaroo's holding in FMG was worth 6,2B or so about one year ago, it's now worth 2B
Yep that's a 4.2 Billion dollar loss in a year and it aint over yet it seems!
Lets see if they can suck in some more backers to peddle it along a little longer.

All this time when big question marks have arisen over China, he has been very vocal saying, it's all good and there wasn't a problem the massive expansion is going to go on for decades to come and the Chinese know what they are doing, and we should listen to and trust them.
Blah blah BS!!

 

[fiftyeight]

Recently at a FMG site.

Did not expect to see exploration drilling going on and work is going ahead on a new pit.

Also, in the mess there are signs asking for money savings ideas to achiever their goal of $20/tonne. I wonder how close they actually are to that target?