Australian (ASX) Stock Market Forum

MIN - Mineral Resources

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qldfrog said:
One of my "dogs of last year" portfolio.
It is true it is more a rabid skin loosing toothless sick nasty mongrel than any pet you would purposely purchase.
I actually wonder if i will even have something to sell next December..
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Am not sweating here I bought mine sub $14 and successfully rescued the investment capital

Am in no hurry to buy more with cash again but that is always an option
 
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.
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They have nearly completed the Onslow port, Ken’s bore mine, the haul road and the trans shippers also along with buying fleets of equipment all up it was some some 5 or 6 billion
Along with that flash new building in Osborne park

With iron ore just starting up at what will be the big flagship site the debt levels will drop significantly over the next few years

The haul road from site to port 49% ownership of it was recently sold also for around a billion
 
The problem is the large instos keep on bagging out iron prices all over the net, it's giving the market a bad sediment and buyers at higher prices are keeping away.
 
TimeISmoney said:
The problem is the large instos keep on bagging out iron prices all over the net, it's giving the market a bad sediment and buyers at higher prices are keeping away.
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Not so bad for me I have a few smaller iron producers on my ( top up ) target list BHP needs to basically halve to lure more cash from me … but never say never and maybe I will even soften my resistance to reentering FMG if the price is low enough
 
divs4ever said:
Not so bad for me I have a few smaller iron producers on my ( top up ) target list BHP needs to basically halve to lure more cash from me … but never say never and maybe I will even soften my resistance to reentering FMG if the price is low enough
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I've bought a few bottoms in FMG and can exit with profits but the SP has proven to be a bit erratic. Any time it finds a high analysts down rate it again.
 
divs4ever said:
Interesting that the green energy darling is so punished by the analysts and brokers are they trying to add/buy
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Yeah, I've noticed that, even worse now with Trump dropping out of the Paris Agreement and defunding all EPA groups and green grants in the US.

I honestly don't think you'll see big gains in iron ore miners for a while, every indicator for China's economy is still going down.
 
TimeISmoney said:
Yeah, I've noticed that, even worse now with Trump dropping out of the Paris Agreement and defunding all EPA groups and green grants in the US.

I honestly don't think you'll see big gains in iron ore miners for a while, every indicator for China's economy is still going down.
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China had to ease back or face a Japanese-like Asian crisis no real worries until China post two years of negative growth NOT GDP
 
Something doesn't add up on Commsec...MIN's percentages

Company Performance​





VolumeToday's Change
SIG26,875,344-0.220 (-6.73%)
PLS15,569,802-0.200 (-9.01%)
TLS13,796,8020.015 (0.39%)
STO10,622,844-0.335 (-4.86%)
NAB7,815,281-3.930 (-9.70%)
MIN7,263,667-7.200 (-22.17%
 
my average buy price is $13.9x and have extracted the investment cash twice over , so am NOT sweating .. yet , however withholding the div. certainly dampened my enthusiasm to buy more
 
From Market Matters afternoon report:

Mineral Resources (MIN) $24.18
MIN-20.72%: The gift that keeps on giving, with MinRes reporting 1H25 financial results that were a slight beat to downbeat expectations driven by Mining Services, however, lower Iron Ore guidance from Onslow Iron plus an additional $300 million needed to upgrade the haul road as a consequence of tropical cyclone Sean saw the shares trade sharply lower.

MIN have now made the decision to fully asphalt the 150km haul road after water damage means capital expenditure for FY25 is now $2.1 billion versus consensus of less than $2 billion at a time when debt is a major concern.

Revenue of $2.29 billion down -8.9% yoy, ahead of expectations for $2.21 billion.
Underlying Ebitda $302 million, -55% yoy, versus consensus of $200.8 million
Net loss of $807 million driven largely by non-cash impairment charges.
Today’s conference call (@ midday AEST) was the first chance for direct questions to Chris Ellison in the past 6-months, which caused some frustration in itself, with most focus on the haul road issues, what they got wrong there, the balance sheet with net debt at $5.1bn and upcoming maturities, related party transactions and the prospect they may need to raise cash under a new Chairman. All of these aspects were answered, some with a straight bat, others with a degree of spin, however the overarching issue is the market has lost confidence at a time when net debt to EBITDA sits at a challenging 7.4x. The markets confidence that MinRes under Chris Ellison will just get sh*t done has vanished.

There is clearly frustration, which is showing up in the share price, however, we came off the call with some semblance of confidence that now is not the time to fall on our sword, and while hindsight says we should have taken our medicine sooner, selling into what we think is an overreaction to today’s update will only compound the issue.

Our focus with this position is identifying when we should be reweighting up to our target, given the decline in the shares has reduced the active weight. We will send an alert at that time.

MM believes MIN is approaching (or is at) peak negativity ~$24

Not Held
 


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