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NFL - Natural Fuel

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Ranger

Ranger

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I have recieved an email from Commsec about an upcoming float Natural Fuel Limited.

The offer price is $1.50 per share, with a minimum contribution of $3,000 with 53,340,000 shares on offer. The offer is open until 13/12 and they are expection to commence production of their Darwin plant in Jan 07.

Does anyone have any thoughts on Natural Fuel Limited?
 
Re: NFL - Natural Fuel - IPO

The biofuel/diesel sector has taken a hammering in the past 1/2 yr, here's a snapshot.

ARW - down to $0.455 from a high of $2.35
ABJ - down to $0.325 from a high of $1.69
MBT - down to $1.20 from $1.88
SBI - down to $0.575 from $0.95
JPR - down to $0.06 from $0.24
BEI - down to $1.75 from $3.45

These reversals started in during the May correlation, but all have continued their downward trend. I think the main reason why this sector is performing poorly is because oil prices have fallen in the 2nd half of the year. This is just my opinion on this sector and i haven't looked closely at NFL's prospectus

happy trading
 
Re: NFL - Natural Fuel - IPO

I have been watching this one with interest. Issue price $1.50, closed on the first day of trading at $1.17. Closed today at $0.935. That's a nice 38% loss in 3 weeks of being a listed company. The price is definitely correlated with the price of oil. After last nights fall in oil NFL was down 14.5c today alone. For the purposes of the prospectus the directors have assumed an oil price of WTI US$55 per barrel. So you can see why holders of NFL are getting spooked by a dropping oil price as it breaches the directors forecast levels.

They have some quite ambitious earnings targets turning a forecast -$25m loss in FY07 into a $119m profit in FY08. Assuming they get up and running their profits are far from certain being highly leveraged to the prices of the products they produce namely biodeisel and glycerine and the inputs into the production process being the feedstock prices of Palm Olein and Soybean oil.

There are also a number of regulatory risks. Whilst there has been no protectionist measures put in place by the US government (NFL's largest target market) the American Soybean Association is lobbying to have imported biodiesel exempted from federal tax benefits. A $1 per gallon blending credit for biodeisel makes it a cheaper alternative to mineral diesel. Without such incentives it would be more expensive. Current market cap $320m NTA $117m. If the price of oil slides some more the price of NFL could get interesting.
 
This stock seems to be going from bad to worse.Does anyone have any thoughts on whether there is light at the end of the tunnel or if it is just a deep black hole?
 
brokenback said:
This stock seems to be going from bad to worse.Does anyone have any thoughts on whether there is light at the end of the tunnel or if it is just a deep black hole?
Click to expand...
There probably is light somewhere there in the the abyss but its a long way to crawl, If your serious about investing in Biofuels Look at Mission Biofuels (MBT) And Sterling Biofuels (SBI). Mission biofuels of the lot by far have the best fundamentals and shares appear to be tightly held. SBI have just finished building their plant and will commence commisioning, Both are subject to fluctuating palm oil prices, Both have tax exemption cause their in malaysia, Both are close to feedstock but mission biofuels has a longterm outlook switching feedstocks to jatropa (an inedible feedstock that will not be affected by external palm oil feedstock prices or any other feedstock price):2twocents Oh yeah please DYOR
 
For those interested - a strongly opinionated article about biofuels from the Economist.

An updated prices from those mentioned in Post 2 (28 Nov 2006):

ARW - down to $0.19 from 0.455
ABJ - down to 0.09 from $0.325
MBT - up to $1.385 from $1.20
SBI - down to $0.215 from $0.575
JPR - up to $ 0.155 from $0.06 (50% in a day!)
BEI - down to $0.475 from $1.75

NFL now $0.27


So food for thought!
 

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  • Economist article BIOFUELS.doc
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Just looked at NFL for the first time....what a shocking chart.:eek:

When will they run outa money?
 
The following is from their FY07 Financial Statement:

Natural Fuel Limited (ASX: NFL) reported a FY07 net loss after tax of $47.8 million which includes a non-cash impairment charge of $21.1 million against the carrying value of its proposed Houston plant. Without the impairment charge NFL’s full year results were $26.7 million compared to prospectus forecast loss of $25.3 million.
FY 2007 was a challenging year for NFL in view of unfavourable feedstock price movements, commissioning issues in Darwin and variability of the economics of the proposed biodiesel plant in Houston, USA. However,
importantly, the Board is pleased with the progress of what will currently be the world’s largest biodiesel plant and the company’s main operation in Singapore. This project remains on track to generate significant revenues
from the third quarter of FY08.
NFL expects to commission the three 200,000 metric tonne processing plants in Singapore and to start exporting biodiesel to USA and Asia in the third quarter of FY08.
As for the proposed Houston project, the Board has taken the view that it is prudent and conservative to make an impairment charge to the carrying value of this project and to write the carrying value to nil given the increased uncertainties surrounding the current economics of building a biodiesel production facility in Texas.
As an example, the recent decision by the Texas State Government not to renew its Biofuels Incentive Program was just one of the commercial issues the Board has considered in evaluating the project. It should be noted that the Houston project remains under continuous assessment by the Board as part of its overall strategy for the USA operations.
NFL remains committed to developing a strong USA presence by pursuing opportunities which add to shareholder value within an appropriate risk profile. Our near term focus in the USA is to establish an effective sales and distribution network to service the increasing number of sales opportunities for biodiesel in the Americas and Canada. Additionally NFL is reviewing opportunities to acquire existing biodiesel plants that would provide more immediate revenues."

As you can see above they have written off their investment in the USA, but say they are also looking at acquisition which I assume they would need to raise funds for. They just better not ask me.

"At 30 June 2007 NFL had a cash balance of $114.4 million compared to $1.4 million at 30 June 2006."

If they loss approx $25 million per year as they would have done without the write down, they should have a few years a cash left, hopefully the revenue from the Darwin plant will increase and the Singapore plant actually comes on line when they anticipate and generates some revenue.

On a personal note, for what they have done, and how badly they overvalued the company for the IPO, these Directors are being paid way to much money.

Not a happy investor. :mad:
Brett
 
WE have had a change in direction with 3 new directors and pushing the production of pharmaceutical grade glycerine the way ahead is now clear to return to up wood direction.. :cautious:
 
Gurgler said:
For those interested - a strongly opinionated article about biofuels from the Economist.

An updated prices from those mentioned in Post 2 (28 Nov 2006):

ARW - down to $0.19 from 0.455
ABJ - down to 0.09 from $0.325
MBT - up to $1.385 from $1.20
SBI - down to $0.215 from $0.575
JPR - up to $ 0.155 from $0.06 (50% in a day!)
BEI - down to $0.475 from $1.75

NFL now $0.27


So food for thought!
Click to expand...

Hi is NFL a good buy at current prices?

Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS -22.1 1.0 7.0 11.0
DPS 0.0 0.0 0.0 0.0

thx

MS
 
will be interesting to watch this over the next month or so when/if they start getting some sales underway of refined glycerine. maybe this could be a turning point to the so far dissapointing constant slide?

any thoughts?
 
I'll assume the $2000/t was in a different announcement. Two questions to ask are 'how much does the raw feed cost per tonne of product produced, and how much does it cost to actually run the plant with 1, 2 and 3 trains operating? You can then see if you are making or losing money on the process, although net profit or loss would also be affected by amortisation and stay in business expenditure.

I have never held NFL.

Cheers!
 
Gee just had a look at the history of this thread. Biofuels look mortally sick looking at NFL and others listed earlier in the thread! Can anyone explain the reasons. Was it just the oil price, bad finance / debt, or some new energy bandwagons going over the cliff (ie biofuels have been found out). I like alternative energy in principle, but biofuels never took my fancy. Thankfully never put a dollar in it.

ARW 0.014
MBT 0.215
SBI 0.085
JPR 0.04
NFL 0.039 suspended
ABJ ?
BEI ?

Is this good night for biofuels?
 
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