Australian (ASX) Stock Market Forum

MIN - Mineral Resources

Jump to new
The Guardian reported on Chris Ellisons tax and company fraud activities and an easier to read style.
I think he is incredibly fortunate not to be behind bars.

Rips off his company for millions, Rips off ATO for more millions. He is a billionaire . The fines are not pocket change but for someone worth north of 1.2 Billion dollars they could be considered the cost of doing business.

www.theguardian.com

Mineral Resources boss Chris Ellison to step down after board finds he used company resources for personal benefit

Billionaire mining CEO fined $8.8m amid investigation, which follows accusations he failed to disclose revenue generated by overseas entities to tax authorities
www.theguardian.com www.theguardian.com
www.forbes.com

Chris Ellison

#2410 Chris Ellison on the 2024 Billionaires
www.forbes.com www.forbes.com
 
frugal.rock said:
"Ellison grew up in a poor family in rural New Zealand where his father was a pig farmer and later worked in a quarry."
www.forbes.com

Chris Ellison

#2410 Chris Ellison on the 2024 Billionaires
www.forbes.com www.forbes.com
Click to expand...
and as far as i know .. no relation to me

but 'key person risk ' will be immense after the CEO and chair move on

i should probably cry and wail over this , but i rescued the investment cash twice over here , and still hold a few shares
 
basilio said:
The Guardian reported on Chris Ellisons tax and company fraud activities and an easier to read style.
I think he is incredibly fortunate not to be behind bars.

Rips off his company for millions, Rips off ATO for more millions. He is a billionaire . The fines are not pocket change but for someone worth north of 1.2 Billion dollars they could be considered the cost of doing business.

www.theguardian.com

Mineral Resources boss Chris Ellison to step down after board finds he used company resources for personal benefit

Billionaire mining CEO fined $8.8m amid investigation, which follows accusations he failed to disclose revenue generated by overseas entities to tax authorities
www.theguardian.com www.theguardian.com
www.forbes.com

Chris Ellison

#2410 Chris Ellison on the 2024 Billionaires
www.forbes.com www.forbes.com
Click to expand...
Hmm perhaps friends and associates in very high places have saved his bacon.
 
farmerge said:
Sad for the employees I guess.
Click to expand...
depends on how much maintenance and upgrades are needed , it MIGHT be the break needed to sort out any glitches.bottle-necks

( it might send some of the workers on holiday/long-service leave , and retain skilled staff that way )

a buddy's brother is still getting offers ( to operate heavy machinery ) despite being a nervous wreck over family issues



but maybe EV mania has peaked , and that might be a good thing as well
 
I am surprised no posting on MIN thread since last 12 days !!

This is a copy of my posting on DLI


The market digested this announcement like slow-release fertiliser, not as a steroid boost.
Who knows, good sense prevails for MIN after so much publicity.
Once guilt has been accepted, there should be remissions and reprives for leading a better life, not a vendetta.
No one can deny CE's excellent contribution to turning a little pipe company, PIHA, into CSI and big MIN. It has benefitted shareholders, governments, businesses, and the community. We should also remember that our super funds invested significantly in MIN. There could be massive job losses if CE also leaves MIN.

I hold neither MIN nor DLI.
 
Cam019 said:
After reading @DrBourse post which you can find here, I decided to do some fundamental research on MIN myself and thought I would share what I found using the 2022 Annual Report which was released on the 14/10/2022. Part of this was inspired due to my current re-reading of The Intelligent Investor. Here we go.

Share price as at today is $88.79.

MIN is currently trading at 48x earnings based on the 2022 AR. Implied growth rate of the business at these levels (based on the simplified formula in Benjamin Grahams booked noted above: Valuation = Current (Normal) Earnings x (8.5 + 2x expected annual growth rate) is 19.77%p.a. This would bring EPS to $11.23 in 10 years time and at current earnings multiplier levels, prices in the vicinity of $539 per share. On this assumption, and shares outstanding staying the same, market cap in a decade would be approx. $101.3 billion dollars. If you believe this is not sustainable, current prices are too expensive.

From a quick overview of the financial statements:

1. EPS down 72.5% YoY

This is about the only thing I can note without making some amendments to the financial statements.


See below for probable reason.

Free Cash Flow

Looking at the statements, net cash from operating activities in 2021 is $1.309B. Now we have to subtract the maintenance CapEx for which we are going to use Depreciation and amortisation which looks to be $258M. However, one thing that The Intelligent Investor teaches you is to read your financial statements from back to front because the back is where all the creative accounting happens. So, if we scroll to page 164 of the AR, we actually find that accumulated depreciation and amortisation for 2021 is $749M. This gives us free cash flow of only $560.4M, not $1.051B. that's $2.97 FCF per share on current outstanding shares.

Let us do the same for 2022. Net cash from operating activities in 2022 was only $279.8M. Maintenance CapEx for the same period (go back to page 164) is $940.7M which gives MIN for 2022 negative FCF of -$3.51 per share.

Debt

As DrB noted in his post, on the surface, total debt has increased by 83.19% from 2021 to 2022. However, it is actually worse than that I believe. As you can see below from page 188, there are commitments relating to the purchases of property, plant and equipment that are not recognised as liabilities, hence we need to add another $527.7M to the 2022 total liabilities. This brings the actual debt increase to 104.48% YoY.

Additionally, this reduces equity from $3.271B down to $2.743B, a reduction of 16.13%.

Debt to equity is now 184.75%.

View attachment 152637
Dividend Payout Ratio

Instead of using dividend per share / EPS, I instead like to use dividend per share / FCF per share as earnings does not always equal cash, as we can perfectly see this with MIN in 2022 with $1.8487 EPS to -$3.51 FCF per share.

Therefore, using the above, in 2021 we had a dividend payout ratio of $2.75 / $2.97 or 92.59%

In 2022, we had a dividend payout ratio of $1 / -$3.51 or -28.49%

There could be other things in the annual report that I have not found, however what I have found, for me, would be enough for me not to invest in this company at this point in time.

Find MIN 2022 Annual Report here.
Click to expand...
Thought I'd do a follow up on this as I almost picked the high with the timing of my above analysis.

Things seem to be going from bad to worse for MIN with not only the share price down circa 65% from the Jan '23 high, but the fundamentals in this company are still garbage too.

Share price is currently $33.63.

MIN is currently trading at 52x earnings based on the 2024 AR. Implied growth rate of the business at these levels (based on the simplified formula in Benjamin Grahams booked noted above: Valuation = Current (Normal) Earnings x (8.5 + 2x expected annual growth rate) is 21.93%p.a. MIN has become more expensive even with a 65% price drop as the fundamentals deteriorate along side the share price.

Free Cash Flow

Looking at the financials, net cash from operating activities in 2024 is $1.449B with CapEx being $2.108B. This means MIN has negative free cashflow of -$659M or -$3.37 per share.

This is deceiving because if you just take the comprehensive net income figure from the income statement, you'd be remiss to think that MIN are profitable, albeit in a reduced capacity - which is not true. Once you factor in the $659M in negative free cash flow, the real basic earnings per share for 2024 are -276.29 Cents.

Debt

As I mentioned in my last analysis, this company understates their debt level at face value, and you need to go hunting into the notes to find the truth. At face value the debt-to-equity ratio is 2.41x, however it gets worse. Jump to page 187 of the AR and you will find we need add another $961M of capital commitments not recognised as liabilities on the balance sheet. This brings the total debt level up to circa $9.6B and the D/E ratio up to 2.68x.

1732968249919.png


Almost $10B in debt, they still paid out $170M in dividends to shareholders during FY24, and they're not even cash flow positive by a LONG way.

I wouldn't be touching this company with a bargepole.

The share price still has a long way south to go.
 
Cam019 said:
Thought I'd do a follow up on this as I almost picked the high with the timing of my above analysis.

Things seem to be going from bad to worse for MIN with not only the share price down circa 65% from the Jan '23 high, but the fundamentals in this company are still garbage too.

Share price is currently $33.63.

MIN is currently trading at 52x earnings based on the 2024 AR. Implied growth rate of the business at these levels (based on the simplified formula in Benjamin Grahams booked noted above: Valuation = Current (Normal) Earnings x (8.5 + 2x expected annual growth rate) is 21.93%p.a. MIN has become more expensive even with a 65% price drop as the fundamentals deteriorate along side the share price.

Free Cash Flow

Looking at the financials, net cash from operating activities in 2024 is $1.449B with CapEx being $2.108B. This means MIN has negative free cashflow of -$659M or -$3.37 per share.

This is deceiving because if you just take the comprehensive net income figure from the income statement, you'd be remiss to think that MIN are profitable, albeit in a reduced capacity - which is not true. Once you factor in the $659M in negative free cash flow, the real basic earnings per share for 2024 are -276.29 Cents.

Debt

As I mentioned in my last analysis, this company understates their debt level at face value, and you need to go hunting into the notes to find the truth. At face value the debt-to-equity ratio is 2.41x, however it gets worse. Jump to page 187 of the AR and you will find we need add another $961M of capital commitments not recognised as liabilities on the balance sheet. This brings the total debt level up to circa $9.6B and the D/E ratio up to 2.68x.

View attachment 188707

Almost $10B in debt, they still paid out $170M in dividends to shareholders during FY24, and they're not even cash flow positive by a LONG way.

I wouldn't be touching this company with a bargepole.

The share price still has a long way south to go.
Click to expand...
this is a share where my investment cash was rescued a while back ( in November 2020 ) in fact i have taken out the investment cash twice over and this holding is some of the profit running

so for me , the question is , would i throw any new cash at it ?

while not written in stone , i would consider that if the share price drops below $14 again ( where i bought last time )

i suspect a take-over offer would come before that
 
Smurf1976 said:
I've had some success with it in the past as a stock for short term trading so that's a different perspective.

I don't hold it at present. :2twocents
Click to expand...
my activity in this stock , actually looks like medium term trading , rather than just making decisions at the time ( the first sell-down was just logical to remove the possibility of investment cash loss and the second sell-down was to help fund purchasing this farm )

regarding MIN .. has the lithium hysteria peaked , and is the wider ( global ) economy heading into a prolonged recession , lowering iron-ore demand
 
Top