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NWH - NRW Holdings

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Oddson

Never mind about what you paid for NWH in the past, and do not confuse ASL's business and circumstances (debt for one) with NWH's situation. Work out what NWH does, where it does it, and guesstimate what is going to happen to its business, then figure out what you would pay for it. If, relative to the SP, the value is there, then consider buying, and if you think there is a better place to put your money, then forget about NWH.

If you proffer your views on how NWH's business might perform in 2014 and beyond, and why you think so, then we can get a useful conversation going, and then we would have the basis for a valuation. Thereafter it will be time to consider the buy-in SP and timing.

I hold 100,000 NWH, and I think it will do better than Mr Marklet thinks.
 

Before reading the HY report, I reminded myself of the points above i.e. not being as accountant and so on. The key impression I got from the HY report was that management were playing it safe, which is the right thing to do and maybe it will payoff in the long term by allowing them to achieve a dominant position in the industry. I have to accept I just do not understand enough about the industry to accurately assess this payoff - it is basically a gamble for me. The strong balance sheet means that NWH is a reasonably safe punt dependant on your buy price; unfortunately I paid too much too early. I have sold my position and will stay in cash until something attractive comes along.

The last 12 months has been an education

Cheers
 

Interesting decision, I hold, but got in a lot cheaper than you, even so I wonder about selling out at a loss, unless you have another opportunity that is more attractive I would have thought it may be better to hold and see if you couldnt get back in the black. They have pushed up near your purchase price in recent times.
 

Hi Galumay,

The loss is small and water off a duck's back!

My personal view is that in the short-term it is more likely to go alot lower, especially as all of the mining services companies that i follow have reported poor profitability. The industry is struggling and margins will no doubt get tighter. The dividend cut indicates to me that management expect a tough year and I would rather have my money in cash than a business that expects a tough year. It has been an education - the market is broadly efficient and I should have listened.

Cheers
 
I'm underwater 1.3% percent overall on this company (took a stop loss before buying back in lower). With a 4cps interim and assuming a 5cps final dividend, it's yielding 9% before franking credits for me. Dividend trap? At only a 50% payout ratio I do suspect the dividend is sustainable over the next couple of years given that they do have work in hand including Roy Hill. I'm surprised it's been sold down so much since the report. Unless the share price collapses, I'll probably hold.
 
Hey Guys

Looking to jump into NWH,

I understand profit is down a lot, however company has strong contract books + reduced their loans (Debits), considerably PE ratio is at 5.6,

Dividend is almost 10%,

Unless I'm not seeing something, I think this is possibly a buy? Any opinions, would like to get in before ex div date of 10/10/14
 
I also noticed that EBIT was this low, back in 2010 (when share price was at similar level), and even then it was trading at 93c mark... how much lower can this stock go?
 

I actually own this, but something to consider is the amount of revenue coming from the Roy Hill project. There's been no definite cost per tonne of IO from this project, but Iron Ore has dropped hugely in recent months.

Consider the fact that NWH's direct customers may still pull projects as a result and look at who's on the Order Book.
 

That's true, I believe on their report I read they mentioned that they will diversify into oil etc... I guess its all 'talk' untill deals are signed...
 
Well I ended up getting some today and RCG, both my gut was telling me that they were good value

Thanks for your input
 
Been watching this for a while, and couldn't resist buying in today, when its price dropped over 17%.

I think the business is generally run pretty well, and I will hold for the longer term when the general mining industry picks up again. In the meantime existing mines will still require services and equipment where I trust well run businesses will outperform their competitors.
 

I don't disagree with anything you've said as a generic statement, but what are your thoughts on issues with payment from Samsung?

The write-down of goodwill and assets was somewhat a given in my book.
 
Klogg said:
I don't disagree with anything you've said as a generic statement, but what are your thoughts on issues with payment from Samsung?

The write-down of goodwill and assets was somewhat a given in my book.
Click to expand...

Yes it is a problem, hopefully this has already impacted the price, we will need to wait till after Xmas to find out. It will be an interesting outcome and will tell us much about the management.
 
Klogg said:
I don't disagree with anything you've said as a generic statement, but what are your thoughts on issues with payment from Samsung?

The write-down of goodwill and assets was somewhat a given in my book.
Click to expand...

Same here. I thought the price below $1 had this kind of result factored in, so the big drop on this news surprised me.
 
KnowThePast said:
Same here. I thought the price below $1 had this kind of result factored in, so the big drop on this news surprised me.
Click to expand...

I don't know if the market factored in Roy Hill not being paid. Today's sell-off is mere 10c per share or $28m fall in market cap. Roy Hill rail is $620m contract... a $28m dispute is <5% which is a small problem on project of this scale. It is because NWH is <$1 that the reaction was't more savage.

Compare to say UGL which announced a potential $100m provision (it's 50% share of a $860m power project - albeit more complicated than a rail civils work) it's market value fell by around $130m.

I am surprised that NWH wasn't punished more... given how quickly FGE went from "strong balance sheet" to "VA appointed'. A bad stuff up at Roy Hilll may raise existential issues for NWH.
 
I have bailed out of this company at 44% loss.
Been a while with talks with Samsung. I hear they are going to sort it out in March. Unclear future, 200M of the 900M order book is confirmed revenue next half. The order book was 1B-1.2B at last report (Nov). No dividend.

Will sit and watch for a while. (Now that I am out it will probably do very well )
Good luck to holders.
 
jbocker said:
Will sit and watch for a while. (Now that I am out it will probably do very well )
Good luck to holders.
Click to expand...

I reckon it will take a while to recover, no doubt they are in a sector where you need big hairy, contrarian, gonads to be buying. I think that they will recover a bit in March when the Samsung contractural issue is resolved, mainly because they have taken all the costs and zero profit on the H1 books, so whatever they get will go onto the bottom line 100%.

It certainly takes an act of faith to hold now the dividend is suspended, but that was the only responsible action to take given the impairments and Samsung situation.

I continue to hold, looking at adding some more if they hang around the mid 20s.
 
It's been a long time between posts on NWH.

The overall macro environment has gotten deciding worse for all mining contractors. Most major commodities are at post boom lows, and there are increasingly hungry operators competing for an ever-shrinking pie.

NWH for one has dramatically reduced headcount from 3092 from Jun 2014 to 846 in Jun 2015. Only $250m or so revenue is in place for FY16, against a total order book of $663m. Cash on the balance sheet has reduced from $155.5m down to $34.6m, while debt stands at $142m.

None of this is helped by contract dispute at Roy Hill. It's hard to get a handle on the numbers with this, but it's clear it's a major factor to NWH's. NWH is relying on it's lending group being supportive whilst the dispute is being resolved...

I wonder how the market will react to the report tomorrow...
 
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