REC – All eyes on the cash position


Min venn i SB1M, Jonas Meyer, er ute med en «teaser» i forkant av resultatfremleggelsen til blant annet REC. Han opprettholder anbefaling slag med kursmål 1,00 og skriver blant annet følgende:

« REC – All eyes on the cash position
REC is in a challenging position where the market for polysilicon is all time low, the market for silane gas is weak, and the company has a weak balance sheet.

We estimate that the company will have a cash burn of USD14m per annum. After the bond coupon payment on April 13th, REC is estimated to have a cash position of USD18m (before potential working capital changes), while the bond covenant is USD15m. However, Nordea called the indemnity loan of USD16.7m from REC in December 2019. REC management dispute that they have to pay at this point of time, but if it has to be paid, the cash position would be as low as USD1.3m.

In addition, there is significant risk to our estimated USD44m EBITDA contribution from Butte. The EBITDA from Butte has been weak in H2 2019, and Q4 2019 run rate is only USD21m per annum. I.e. if we reduce our EBITDA estimate from Butte to USD21m from USD44m, the cash drain per annum would increase to USD37m from USD14m per annum.

Lastly, due to a low market cap, a 10% private placement would only generate +/-USD7m cash (dependent on discount). The semi-annual bond coupon is USD6.3m. Thus, for a potential private placement to generate a liquidity runway longer than a year, which by our estimate is the bare minimum for the markets to have a slight chance to recover, the dilution would be significant.

In sum, we would not buy REC until a potential financing package is announced.

Best regards,

Jonas Meyer
Equity Analyst»
Trier
12.05.2020 kl 08:03 626

Er det ingen webcast?
økon
12.05.2020 kl 08:07 599

Ser ikke ut som de vil bruke mer penger på Hegnarmedia, sikkert like bra :-)
Sa2ri
12.05.2020 kl 08:10 570

Nope - kun via telefon denne gangen. De skal ha en sak hos ARC senere i dag så vidt jeg vet.

At det ikke er mulig å se presentasjonen via web er elendige greier. Hva er ARC?
Sa2ri
12.05.2020 kl 08:25 478

ARC - Arctic Securities
Randers
12.05.2020 kl 14:37 292

Jeg linker til min egen kommentar fra i går - og fastslår at det var korrekt å ikke gi seg :-)

Fordi: "The cash development was better than expected, driven partly by a significant reduction in working capital,
and partly by the fact that the JV payment and the full interest payment likely will be incurred in Q2 rather than in Q1."

".. the JV payment (...) will be incurred in Q2 rather than in Q1."

Da kommer de 5,2 MUSD i JV-penalty til fratrekk cashbeholdning i Q2.

Link: https://finansavisen.no/forum/thread/100425/view/2022111?legacy=0