Sorry for the multiple version, but I have considered input from other posters and figured out a few things for myself. The ANZ drawdown facility was used to fund the short-term cash flow management of inventory.
So TAS is right there. It shouldn't be included in cash flow and it's somewhat immaterial but still needs to be paid back so I put it under debt - but it's a temp debt.
I also fine tuned the cash flow estimate and estimate of C1 costs and production to better reflect past, current and anticipated margins. In effect, endevouring to squeeze every reasonable dollar out of it to see if EBIDTA could be on track.
Based on these new revisions I see EBIDTA coming in at about 35 mill (down from 40-45). With interest -3 tax -8.7 and depreciation -30, I think KZL may record a loss about -6 to -7 mill.
That being said, and prior to Q3, management expectations of recording 54-72 in EBIDTA were pretty accurate.
The question is 'is it priced in?' - The loss this year will be far less than last year and reflects a lot of improvements; add to that the balance of resource upgrades, the sale of Lounge Lizard this quarter, and 25 million that comes out of escrow in June, 2012 from MUX; together with a better outlook for commodities in 2013-15.
Had they even recorded a paltry 11 mill gain in Q3, EBIDTA would have been 75 mill.
If you are looking to buy - risk on would say now is a good time. Risk off, wait until the half year results come out Feb 15. After this analysts will figure out if a recorded loss in August will happen or not. That's just my opinion.
With higher risk comes a higher % gains of course...
KZL actually finished up today...and I noted at the close..
174 buyers for 3,888,533 units 83 sellers for 2,239,200 units
I think analysts have figured the same as me. If you can stomach a small loss, the future looks bright indeed.
NOTE: This is just a guide for discussion and based on limited public information and should not be used for investment purposes - please do your own research.
KZL Price at posting:
30.5¢ Sentiment: Buy Disclosure: Held
