We have operated better than others in the current coal price environment and our Vlak operation has increased it's profitability over this period. There is no recognition of the impact of cash generation from the Penumbra operation which is now hitting its straps and for the most of FY2014 the company will benefit from it operating at full production rates with a cost profile of approx $50/t and a hedge program in place at $118/t - so even with low coal prices with an almost 500,000t of export sales that will likely contribute over $15m of cash flow.
Debt restructuring is ongoing and an announcement should be made very shortly on that, and will more than address his concerns on that. Debt only increased as a matter of the project financing of the Penumbra Mine with the debt to be repaid over the next 6 years. Short term debt is the convertible notes which we are in the process of restructuring.
On the positive, despite a 24% fall in revenue, and reduced gross profit, EBITDA and EBIT shoe 51% and 24% improvement, so we are managing a number of matters with appropriate cost reductions.
Non-cash Impairments on the assets is the appropriate thing to do in this market, given the decline in the coal price, outlook for the coal price and given that these assets are non-core and do not form part of the Company's immediate development plans.
Trust that this assists
Are thing as bad as this post from hotcopper suggests, could you reply please
I just spent 10 minutes looking at these accounts and that should be taken into account if anybody reads this note. However, I still think holders should take note though of my view (I would think that!), and, if they don't understand accounting, get an accountant to look at this for them. (Need to explain to the accountant also that these consolidated accounts are very misleading in this instance as most liabilities are at the holdco). One of my little boys is fond of saying to, "you listen to me dad, and you listen to me good!". Anyway, in my view:
The chances of any recovery for CCC Australian shareholders is very close to zero, barring a huge rally in coal prices that comes very, very soon. The end is very close now.
The operating cash burn is already bad at $10m, coal prices are now lower and Ferreira is finishing production in November. (Kiwi had got that one right). A chunk of the provision for rehabilitation of Ferreira which I have talked about in the past being more than its worth, is now current. $3.8m to be paid in the next 12 months. Where from, not sure.
The royalties payments due are up to $10.6m. $3.6m current. Unfortunately that is a hold co obligation and likely to use up any value that ends up at hold co after paying other liabilities. The nasty thing is of course it keeps going up even as CCC loses more and more money.
$18m debt is now current. That is going to have to end up being paid out in shares one way or enough, even if liquidation can be avoided. The $15m standby facility which I was always suspicious about is now described as a standby line of EQUITY funding. You have to laugh or you'd cry.
The non core assets (I use that word loosely) that were supposedly for sale are being written down as fast as they can. I glanced through report, but no comment on selling those now?
Anyway, I would sell at any price myself. Could be wrong but JB leaving suggests the last rabbit has been pulled out the hat already.
CCC Price at posting:
3.4¢ Sentiment: ST Buy Disclosure: Held
