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[TOP STORY] Early morning insights into Thungela and Afrimat
Bruce Williamson of Integral Asset Managers looks into Thungela’s dividends and Afrimat’s Glenover Phosphate project.
By Simon Brown 1 Sep 2022 10:11
SIMON BROWN: I’m chatting now with Bruce Williamson of Integral Asset Managers. Bruce, I appreciate the early morning time. You sent me an email, I think it was late last week, on two topics that had been discussed separately. One was Thungela. David Shapiro and I – and I assume it had probably been on my TV show, perhaps – were talking around the increase in dividend. He had said a R60 interim dividend, we’ll get another R60 [at] year end; that makes for R120 for the full year. You [thought] hang on a second; actually we could get a bigger dividend at the year end.
BRUCE WILLIAMSON: Morning, Simon and morning to the listeners. No, what tickled me when I heard the comment was I think that David had thought the R60, being such a big dividend, was the final. He said you can expect another R60 in the next 12 months. That’s not the case. You still [get] ……1:07 a R60 dividend right now and my calculation is based on $250 [at] R16/dollar, which is about 15%, 20% below the spot. I reckon you’re going to get an R80 final, maybe even higher, so that you are in for R140 between now and March.
SIMON BROWN: I’m trying to run the numbers on that. That’s a plus-40% yield. I’m looking at coal. If we look at the first six months, which was for that R60 dividend, coal had sort of moved up over the period. But so far, since the beginning of July when the new period starts, it’s been sort of sitting at that elevated level, which means not only is the final bigger, but they’re just going to make more money potentially in this six-month period. And we note there are still some months to go, of course.
BRUCE WILLIAMSON: Absolutely. Simon, the price is over $300, their benchmark price. The rand has weakened, so that’s going to add that to revenue. And then if you didn’t interrogate the numbers in the interim report, there was about R4 billion [in] paper losses attributable to derivative hedging positions, where they received a lower coal price versus spot, so they made a technical loss on that. So there’s R4 billion of losses that went through the income statement. I reckon in the second half at this point in time they’ll only [have] about R1.5 billion of loss. So there’s an extra R2.5 billion there.
SIMON BROWN: Yes, okay. So Thungela resources is just a dividend-printing machine for now.
...
Podcast brought to you by STANLIB
[TOP STORY] Early morning insights into Thungela and Afrimat
Bruce Williamson of Integral Asset Managers looks into Thungela’s dividends and Afrimat’s Glenover Phosphate project.
By Simon Brown 1 Sep 2022 10:11
SIMON BROWN: I’m chatting now with Bruce Williamson of Integral Asset Managers. Bruce, I appreciate the early morning time. You sent me an email, I think it was late last week, on two topics that had been discussed separately. One was Thungela. David Shapiro and I – and I assume it had probably been on my TV show, perhaps – were talking around the increase in dividend. He had said a R60 interim dividend, we’ll get another R60 [at] year end; that makes for R120 for the full year. You [thought] hang on a second; actually we could get a bigger dividend at the year end.
BRUCE WILLIAMSON: Morning, Simon and morning to the listeners. No, what tickled me when I heard the comment was I think that David had thought the R60, being such a big dividend, was the final. He said you can expect another R60 in the next 12 months. That’s not the case. You still [get] ……1:07 a R60 dividend right now and my calculation is based on $250 [at] R16/dollar, which is about 15%, 20% below the spot. I reckon you’re going to get an R80 final, maybe even higher, so that you are in for R140 between now and March.
SIMON BROWN: I’m trying to run the numbers on that. That’s a plus-40% yield. I’m looking at coal. If we look at the first six months, which was for that R60 dividend, coal had sort of moved up over the period. But so far, since the beginning of July when the new period starts, it’s been sort of sitting at that elevated level, which means not only is the final bigger, but they’re just going to make more money potentially in this six-month period. And we note there are still some months to go, of course.
BRUCE WILLIAMSON: Absolutely. Simon, the price is over $300, their benchmark price. The rand has weakened, so that’s going to add that to revenue. And then if you didn’t interrogate the numbers in the interim report, there was about R4 billion [in] paper losses attributable to derivative hedging positions, where they received a lower coal price versus spot, so they made a technical loss on that. So there’s R4 billion of losses that went through the income statement. I reckon in the second half at this point in time they’ll only [have] about R1.5 billion of loss. So there’s an extra R2.5 billion there.
SIMON BROWN: Yes, okay. So Thungela resources is just a dividend-printing machine for now.
...
