Result updates of SXX, NEX and FRES

Result updates of SXX, NEX and FRES

Sirius Minerals PLC

Sirius Minerals PLC (SXX) is a United Kingdom-based mineral development and fertilizer company. It has exploration rights over Polyhalite mineral deposits located in Whitby, Yorkshire United kingdoms. The mineral, which is a combination of six micronutrients viz; potassium, magnesium, sulfur, calcium, nitrogen and phosphorus can be used directly as fertilizer without going for further chemical processing. The company plans to use this mineral to produce a granulated NPK type blended fertilizer product called POLY4.

The company is yet to start production of its headline product, and It is currently in the construction and commissioning phase of the mine at Whitby, Yorkshire. It is listed on AIM at the London Stock Exchange and trades with the ticker name SXX. It is also a part of the FTSE 250 index.

Recent News update

The company on 6 August 2019 announced suspension of $500 million worth of bond sale, which was scheduled to hit the debt markets by the end of July. The company has stated that the impending economic conditions are not conducive for the proposed fundraising and that it would wait till the next quarter to revisit the same.

The company is strapped of cash with enough to sustain operations only till the end of September. fund raising is critical as it would open up a $2.5 billion credit facility extended by JP Morgan, required to complete the construction of the mining project.

Financial updates from Annual report for FY 2018

Sirius Minerals PLC is a mining company in the development stage; it has no sales and is still funding its construction activities. The company reported an operating loss of £24.2 million for the year ended 31 December 2018, compared to a loss of £24 million year ended 31 December 2017. The net loss for the year ended 31 December 2018 was £19.2 million compared to a loss of £79.8 million for year ended 31 December 2017. The higher loss in previous year was due to adverse valuation of embedded loan derivatives and royalty financing derivatives, whereas the company has gained this year on those two accounts. The loss per share (diluted) of 0.41 pence was recorded for the full - year period ended 31 December 2018, whereas for the period ended 31 December 2017,  the loss was 1.28 pence per share.

Source – Company Annual report publication for FY 2018

The stock price performance of Sirius Minerals PLC

 Daily Chart as on 8 August 2019, before the market close (Source: Thomson Reuters)

On 8 August 2019, at the time of writing (before the market close, GMT 10.29 am), SXX shares were trading at GBX 9.62, up by 4.11 per cent against the previous day's closing price of GBX 9.24. The Stock's 52- week High is GBX 38.74, and 52-weeks Low is GBX 8.50. The total market capitalization of the company is around £668.43 million

Outlook

The company has a business model where it is able to convert a mineral directly to fertilizers without much processing cost involved vis-à-vis other petrochemical-based fertilizer companies. Theoritically, margins will be higher for the products of the company, which will translate into a higher valuation for the company.

The company’s reluctance to float bonds has got more to do with the countrywide economic environment and has no link with the risk-return profile of its project. The company is expected to raise the required funds in the next quarter.

National Express Group PLC

National Express Group PLC (NEX) is a multinational commuter transport company based out of Birmingham in the United Kingdom. The company offers commuter services in Buses, trains and trams in the United Kingdom, Germany, Spain Portugal, Mata, Bahrain, Canada Morocco, Australia and the United States.

The company founded in 1992 as National Express Group PLC, is listed on the London Stock Exchange and trades with the ticker name NEX. The stocks of the company also form part of the FTSE 250 index.

Recent News Update

The company on 30 July 2019 announced a deal with the Australian technology company Seeing Machines. The latter provides AI-based driver safety solution, which promises to improve safety and productivity of the user company's staff and equipment

It tracks the eyeball movement of drivers to initiate pre-programmed responses when they defy preprogrammed safety parameters; thus it provides on-the-go safety support to the driver as well as the operators.

Financial update from Annual report for FY 2018

The company for its financial year ending 31 December 2018 reported revenues of £2.45 billion compared to revenue of £2.321 billion for corresponding prior-year period ended 31 December 2017 (on IFRS basis). It reported an operating profit of £215.4 million for the year ended 31 December 2018, compared to a profit of £197.9 million for year ended 31 December 2017 (on IFRS basis). The net profit for the year ended 31 December 2018 was £138.7 million whereas it was a profit of £134.3 million for year ended 31 December 2017(on IFRS basis). The higher profits this year was on account of a 5.57 per cent growth in revenues. Earnings per share (diluted) were 26.5 pence for the full year ended 31 December 2018, whereas it was 24.4 pence per share for the period ended 31 December 2017.

Source – Company Annual report publication for FY 2018

The share price performance of National Express Group PLC

Daily Chart as on 8 August 2019, before the market close (Source: Thomson Reuters)

On 8 August 2019, at the time of writing (before the market close, GMT 10.29 am), NEX shares were trading at GBX 422.4, down by 0.24 per cent against the previous day's closing price of GBX 423.4. The Stock's 52-week High is GBX 450.2, and 52-week Low is GBX 356.00. The total market capitalization of the company is £21.6 billion.

Outlook

The company is in the public transport industry, and its business is relatively stable. The new technology will add value to commuter safety, staff safety and equipment efficiency. This will have a marginal effect on the revenues of the company. However, the real growth for the company will come from expanding into the markets where it has recently forayed into.

Fresnillo PLC

Fresnillo PLC (FRES) is a United Kingdom incorporated metal and mining company, with headquarters and operations in Mexico. The company has interests in six mines, the Fresnillo and Saucito mines in the Zacatecas province, Cienega mines in Durango, Herradura mines in Sonora, Soledad-Dipolos in Sonora and Noche Buena in Sonora, where it extracts gold, silver zinc and lead. The company also has two other projects under development in Durango Saucito II and San Julian. Saucito II has started production since Q2 2018 and produces 24% of the total silver output of the company.

The company is listed both on the London Stock Exchange and the Mexican Stock Exchange. At the LSE it trades with the ticker name FRES and it is included in the FTSE 100 index.

Recent News

The company on 30 July 2018 came out with its first half-yearly results for 2019. The company has performed poorly with net profit plunging by as much as 69%. The company also gave a weak guidance that production will take a further hit for the rest of the year and in FY2020 as well.

Financial update for H1 FY 2019

The company for the Half-Year ended 30 June 2019 reported revenues of £1.002 billion compared to revenue of £1.115 billion for half-year period ended 30 June 2018. It reported an EBITDA of £307.9 million for the half-year ended 30 June 2019, compared to an EBITDA of £566.9 million for half-year period ended 30 June 2018. The net profit for the half-year ended 30 June 2019 was £70.9 million whereas it was £229.3 million for half-year period ended 30 June 2018. The lower profits for the most recent half-year was on account of a drop-in revenue and an increase in the cost of sales. The earnings per share (diluted) of 9.5 cents for the half-year ended 30 June 2019 whereas for the period ended 30 June 2018 it was 31.1 cents per share.

Source – Company Annual report publication for H1 2019

The share price performance of Fresnillo PLC

Daily Chart as on 8 August 2019, before the market closed (Source: Thomson Reuters)

On 8 August 2019, at the time of writing (before the market closed, GMT 2.56 pm), FRES shares were trading at GBX 678.2, down by 0.38 per cent against the previous day's closing price of GBX 680.8. The Stock's 52-week High is GBX 1028.0, and 52-week Low is GBX 570.00. The total market capitalization of the company is around £5.00 billion

Outlook

The company is suffering from production-related bottlenecks, which has hampered its production and has been a drag on its revenues. It will continue to affect the company until at least 2020 as is being anticipated by the management. However, the company may draw some solace from strengthening precious metal prices in international markets, which will provide some counterweight to its falling margins.

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