The stock has lost 20% of its value over the last few weeks notwithstanding the accuracy of what you have posted. Seems to me that most institutional investors have tuned this stock out and won't be interested in it unless something materially positive emerges. What that might be is hard to say.
Just like a lot of the juniors, Allana was all hat, no cattle. It never had the ability to finance its CAPEX which it has now acknowledged to everyone. But it does have some important projects such as Danakil in Ethiopia that ICL will definitely see to conclusion. Current estimates to enable Danakil to produce 1 MMT annually for 25 years are $642 million. Africa is a growth area in terms of agriculture and so when that project is completed, ICL will be close to both key Asian and African markets while at the same time diversifying its asset base outside of Israel. POT may be unable to acquire control of ICL but unlike SQM, ICL is an investment not likely to fall apart. And it has historically paid a decent dividend to POT when business was decent and there were no strikes on the horizon.
Currency traders are a fickle lot. One day they are in love with a currency and the next day that same currency is viewed as toxic waste. It is reasonable to believe that Fed policy is keeping traders convinced that an interest rate hike is coming. But what happens if it doesn't come and instead the Fed goes back to quantitative easing? This is not a far fetched idea. It only requires a catalyst such as an explicit downturn in the U.S. economy or some financial crisis somewhere in the world. Spewing out medicated money is all the Fed knows how to do. It cannot unwind its bloated balance sheet because the U.S. cannot afford a material rise in interest rates. One does not have to be a survivalist to believe that U.S. stocks, bonds and real estate are in bubble mode propped up by zero interest rates. Take the punch bowl away and watch them fade at which point the Fed will be back in print mode. I don't bet on the rise and fall of currencies but I doubt that the U.S. dollar will remain as strong as it has been relative to other currencies. It is already a very crowded trade so once folks head for the door, some will get trampled. The best thing to do is take advantage of it while one can by going overseas on vacation. That is what I plan to do shortly.
The payout ratio should give no one pause given that it should be heading way down along with the CAPEX. Moreover, the dividend coverage ratio is currently 132% which is healthy enough. We are unlikely to see another dividend increase this year but next year is another story.
This is a provincial matter; the national government is not involved. I don't expect any more tax shoes to drop.
Here is their analyst, Steve Hansen on why:
“While it does appear that the balance of power is tipping toward the Chinese as the spring application period approaches, we remain optimistic that a contract will ultimately be reached – likely by early April with a modest (5-per-cent) price increase attached.”
BPC's deal with major Chinese importer is first for 2015. Uralkali criticized hike as too small. So Belarus now selling into China at $315 per MT. Both Uralkali and Canpotex have been in negotiations with China over a $25-$30 price increase per ton according to Uralkali head of sales, Oleg Petrov. Belaruskali declined to say what the size of the China deal was.
The report said CDN $75-100 million, not U.S. $75-100 million. POT reports earnings in U.S. dollars. Impact of increased taxes therefore $59.25 million to $79 million. Not good but manageable.
Here is why the POT execs quit the SQM BOD:
(Reuters) - Potash Corp of Saskatchewan said on Wednesday that its three representatives quit the board of Chilean fertilizer group SQM due to concerns that SQM was not adequately investigating allegations of wrongdoing or fully cooperating with Chile's public prosecutor.
"It has become clear that given our minority and dissident position on the board, we are unable to ensure either that an appropriate investigation is conducted or that SQM collaborate effectively with the public prosecutor," Potash Corp said in a statement on its website. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Jeffrey Benkoe)
No can do. Control is in the hands of Pinochet's son-in-law, Juan Ponce
It does look bad but this could turn out to be a 'lemons into lemonade' story if the end result is that POT takes over SQM as the White Knight. Otherwise it does not look as if SQM is going to remain in the POT portfolio.
The operator of a rock moving machine died during repair works being carried out to a shuttle car. Matter under investigation. While investigation into the cause of the accident continues, the director of the complex, the chief engineer of the mine and complex and the head of the Berezniki mine have all been suspended. No doubt a lot of work will get done during this period. Not.
India says they can't pay more for potash than they paid last year because the rupee has declined 16% against the U.S. dollar. Couple that with the likelihood that Belaruskali will offer potash at last year's price to maintain or augment its market share in India and the probability is that India may get its wish. And if it does, then China will likely pay no more than what they paid last year as well. Not good news but not shocking either. Not sure if the producers can do anything about it. I have no doubt that if the rupee had gained 16% in value against the U.S. dollar, India would come up with a different excuse for why it was not willing to pay more for its potash.
Not sure why CS, which has been very negative on POT and the potash industry generally and continues to be so, believes that China will agree to a price increase. But putting their speculation aside, as I recall, Canpotex is not seeking a 10% price increase. The current price per metric ton on the existing contract is $305 and Canpotex has asked Sinofert for a $25 bump which amounts to an 8% increase. Sinofert demurred, stating that with shipping costs having come down along with other producer cost saving measures, Sinofert said that keeping the price where it is is the right thing to do. Which means that the price should wind up somewhere between those 2 figures. However, as I indicated earlier, Macquarie is telling everyone that the sky is falling in China, that there will be price decreases there to $270 and that volumes for the whole year will be off at least 6 MMT from last year. I certainly hope that there is some upward movement in the price for potash in China if only to stick it to bogus crystal ball gazers like Macquarie. Because that would mean that the shelf life of their prediction regarding pricing proved very short lived indeed.
Now here we have a crystal clear statement that will tell us whether we are dealing with know nothing gerbils or prescient prognosticators. Macquarie says the potash volumes in 2015 will only total 54 MMT, an amount materially lower than anybody in the business is predicting. It also says that potash prices will not only not increase but will dip to $270 per MT this year and continue heading lower for the next 4 years bottoming out at ~$250 per MT.
I plan to watch how this year goes and will #$%$ on this clown big time if they are off as much as I think they will be.