Lithium stocks have had a strong run last year as the demand from the EV battery makers cranked up across the world, having said that the year 2018 has not been the best so far for the metals and mining stocks.
Galaxy Resources Limited (ASX: GXY) – Against $5.0 Mn posted in 1H FY17, profit after tax for 1H FY18 came in at $11.49 Mn. Against US$1.5 Mn in 1H FY17 gross profit was recorded at US$23.2 Mn. GXY posted a healthy half-year financial performance with profit after tax almost growing multi-fold from the previous corresponding period. Meanwhile, for the ongoing projects and optimization initiatives, the group has decent cash position to take care of the funding requirements. The group had cash and cash equivalent of $ 45.12 Mn with zero debt, as at 30 June 2018. As at 3 October 2018, the stock of Galaxy Resources traded at $2.680 with a 5-day performance change of 6.75%.
Orocobre Limited (ASX: ORE) – With statutory Net Profit coming in at US$1.9 Mn and Underlying NPAT from continuing operations at US$25.7 Mn compared to US$ 13.8 Mn the group has posted strong FY18 results. The group had cash reserve of US $ 316.7 Mn, and new cash of US$ 229 Mn, as at 30 June 2018. At Olaroz Stage 2 and Naraha Lithium Hydroxide project, the company is expecting a promising growth opportunity with both the projects advancing towards final investment decision. The company has strong operational earnings and is ready for future growth. Also, with available cash at 30 June 2018 of US $316.7 million the company represents Strong balance sheet. As at 3 October 2018, the stock of Orocobre Limited traded at $4.590 with a 5-day performance change of 11.16%.
Lithium Australia Limited (ASX: LIT) - For the year ended 30 June 2018, the operating loss after income tax of the Consolidated entity was $8,093,005 compared to loss of $4,592,225 in 2017 because of which no dividend has been paid during or is recommended for the financial period ended 30 June 2018. The Consolidated entity’s working capital surplus, being current assets minus current liabilities grew from $2,726,613 in 2017 to $13,697,269 as at 30 June 2018. The revenue of the company increased from $42,855 on June 30, 2017 to $113,995 on June 30, 2018. The group had cash and cash equivalent of $ 18.34 Mn with zero debt, as at 30 June 2018. As at 3 October 2018, the stock of Lithium Australia traded at $0.105 with a 5-day performance change of -4.55%.
Pilbara Minerals Limited (ASX: PLS) – As per the support provided from BNP Paribas and the Australian Government’s Northern Australia Infrastructure facility, the company has secured a $19.5 Mn concessional loan facility by the Northern Australia Infrastructure facility and US $15 Mn working capital and foreign exchange hedge facilities from BNP Paribas. The company was expecting the first shipment forecast to start between 14 September 2018 and 21 September 2018. For the full year ended 30 June 2018, compared to $25.9 Mn in FY17 the company recorded decline in loss of $19.1 Mn. The first five years average EBITDA (real) post ramp up of A$400 M pa. As at 3 October 2018, the stock of Pilbara Minerals traded at $0.865 with a 5-day performance change of 2.27%.
Mineral Resources Limited (ASX: MIN) – The group saw an EBITDA change of positive 9% at A$ 507 million. The net profit after tax was reported at A$ 272 million which is an increase of 35%. Resulting into a 40 cents final dividend making it a total of 65 cents for the year. Also, the net revenue was up by 16% which is at $1.7 billion. This significant growth is driven by sale of 3.5 Mt lithium DSO and 382 KT of spodumene concentrate which is up from 262 KT on the prior corresponding period. Mining services business continues to perform strongly. With available cash at 30 June 2018 of US $240.4 million the company represents Strong balance sheet. As at 3 October 2018, the stock of Mineral Resources Limited traded at $16.360 with a 5-day performance change of 18.60%.
Altura Mining Limited (ASX: AJM) – As at the end of the period June 30, 2018, the company’s cash and cash equivalents are at $28.999 million. The group has, however, made an operating loss of $12,816,965 and during the year ended June 30, 2018, there were no dividends paid or declared for the financial period ended 30 June 2018. The stock has risen by 18.60% over the period of 5 days. With first sales due to commence during Q3 of calendar 2018, Altura is focused on achieving name plate production from its Altura lithium project. As at 3 October 2018, the stock of Altura Minerals traded at $0.240 which is near its 52-week low, with a 5-day performance change of 18.60%.
Lepidico Limited (ASX: LPD) – Through oversubscribed entitlement offer and private placement to Galaxy Resources Ltd successfully raised approximately $7.1 million. On the back of strong growth and positive developments within the company, LPD has generated an annual return of 65.07%. With available cash at 30 June 2018 of $4.9 million the company represents strong balance sheet. The net assets of the Group increased from $20,629,913 at 30 June 2017 to $24,499,573 at 30 June 2018. As at 3 October 2018, the stock of Lepidico Limited traded at $0.021 close to its 52-week low, with a performance change of 5.00% over the last one month. No dividend has been paid during or is recommended for the financial period ended 30 June 2018.
Table: EPS Valuation for 7 Stocks
|Serial Number||Company Description||Ticker||Potential increase in EPS as indicated for next FY (market consensus)|
|1||Galaxy Resources Limited||(ASX: GXY)|
|2||Orocobre Limited||(ASX: ORE)||ü|
|3||Lithium Australia Limited||(ASX: LIT)||–|
|4||Pilbara Minerals Limited||(ASX: PLS)|
|5||Mineral Resources Limited||(ASX: MIN)|
|6||Altura Mining Limited||(ASX: AJM)||X|
|7||Lepidico Limited||(ASX: LPD)||–|
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