Ann: NUF Update, page-51

Wewill see though you told us H1 would be out in early February because thedecrease in Q reporting requirements it does not look like it made it.  Post #: 37167347      Starting to look like very late February or early March per usual.  Yes many things are involved in profits.   I have  said many times NEXT will bring down COP.     ASP is still number one for impact I would like you to explain if you disagree.     Now  I know you  like to use 2017 as a base line for prices I have even extended my charts to include this period.  I will admit prices are up 25% since then.  I have asked multiple times and you have never answered why do you think using a year when they had a loss of   45M on  257M in revenue is a good point in time to compare to.  Could you do it now?    

Now I think that a good time to compare to is H1 2018 when they had 51M ( 79M  with currency gain ) in profits on 201M in revenue for diluted earnings of 8.57 cents per share for six months,  that justified a stock price  over   $2.00   Of course  Prices and EPS have come way down in H2 profit of 2.3 M on 173 M in revenue  even as tons sold went up  a little.     And unlike your china export figure we know the mix H1 ’19 to H2 ’19 all the increase was Nd Pr which went up from 2664 tons H1 to 2779 tons H2 and even with this improve mix  profits fell  92%.  So if it was not REO prices that caused this could you explain what did?     Next was  being turned on so COP should have gone down.  Look  at cash flow reports  for all Qs or H1 and H2 all NEXT cost were CAP EX as was all mine expansion.     So if you are correct please explain profit changes H1 to H2.   You can say all you want what I am not considering.   Unless you say otherwise with numbers,   you see to always leave numbers  out,  and just talk in broad sweeping statements..  The only thing that explains it is falling prices which somehow you still do not think is a factor.   So instead of telling me what I am not including, which is false, why don’t you explain what it is with at least a few numbers.  


Now I see you are already starting to explain the H1 2019 by the lack of production in Q2,  this  is a valid point I agree with it.      It is easy to estimate the impact and put numbers on it.    Something I am sure you would prefer not to do.   First they shipped all the Ce and La they could because of the surplus in inventory.   Nd and Pr were short now you can use 400 tons which is what we were told or you can use 1800 -  1223    or 573T shortfall for December.  I did not do it this Q but Lynas has pretty consistently  received about 105% of market price,   last  Q I proved accuracy  two different ways.   So   I will assume a sell price for Nd and Pr of AUD 58.25 X 573  that is $34.4 M  in revenue.   Now profit on this is harder.  No one was laid off so no savings in labor.   Solvents, propane, water and other material expenses were avoided.  The labor used to do long term maintenance could very well be called CAP EX but because of no cash report we do not know.      We will need to wait for H1 to see what was called CAP EX.   All startup cost  of the Nd and Pr line also may be CAP EX.        So you can decide how much of the 34.4 M is profit I think 25% to 50 % is fair but will admit there are  many variables.     

According to Calvo "Theupdated figures are as follows they are mean values of five analysts. Thisis for your information only and not to be acted upon without further due diligence."   to support 8 cents a share,    which is a downward revisionfrom  16.5 cents.     They need 57 M in profits in FY ‘19which was revised   down from 118M .       Ifthey make  less than 10M H1 what do you think the chance of  themmaking 40M + at todays prices in H2 are?        You canpush your usual hype about loss of production in Q2  but it just can notmake that big of a change.     With the ASX 200 PE at 15 and dropping,what is you justification for Lynas to have a $2.00 SP if profits for year are6 cents PE 33, 4 cents PE of 50.   

H1 one will be telling.   Q3 will give firm numbers on three fullmonths of unhindered production with NEXT complete.   Cash will givea good idea of profits when expenses and credits from H1 are applied toit.  

You have often said there is a market delay of 90 days between market pricesand Lynas’s sales price and touted this often when Prices were going up.   Well if it applies going up it applies going down   That meansthe sales price for all of 2019 will be fixed in about 45 days  that 4.5 monthsof  6 months is already determined.  

 

I expect that H1 combined   with Q3 will be very telling on the long term potential of Lynas,  with REO prices staying flat.    I expect you will then say current performance is unimportant. The future looks better which I absolutely agree with.   What you have never explained is, why stay invested in a company whose short term prospects look bad just because future could be great.    Why not sit on side lines till the future looks close at hand?  I would like to hear how you explain that investment idea.    

The ultimate proof of you inability to put anythingsubstantial forward is this great sounding statement.

 

Not making any current predictions givendisruptions last half but simple fact is if you pull more product out, liftproduction say LN targets ~40% at perhaps 10/15% increase in CoP, you are goingto significantly raise earnings even with static prices.111

  Why not make a Prediction.    You love to say prices are not a problem if so make a prediction and show why!!!!  Nothing tying this to current numbers.   Nothing saying what profits will be.   No justification for very small COP increase.    Do you have any prediction for what COP will be in Q3 either total or  per KG?   If not how can you say only 10% ~ 15%?  Give you a hint in Look in Q1 and Q2 reports determine cop and multiply times you percent.  I do not think the math is that hard.     Just flowery good sounding statement that says nothing that anyone can make an investment decision on.     Stop telling others how wrong they are if you are so unwilling to put up your own numbers.