Of course. They provide that in quarterly call. Answer that and you will see they are losing money on every pound of aluminum with possible exception of certain value added products that they don't break margin data out on. Overall though, it is clear that they will have at best a near break-even quarter (EBITDA) and probably a significant operating loss on operating basis for primarily aluminum ignoring the costs associated with explosion.
I can' figure out alumina cost per ton for last quarter (or any period of time) as they don't disclose. Can figure out EBITDA relative to sales and operating income relative to sales but the figure is all over the place. My guess is that they will show revenue growth in alumina of roughly 10% QOQ due to China sale and they might earn $10 M operating income for the quarter off of alumina. Very tough to project. Might only be $5 million.
Yea. As of today LME is at $1,569 per metric tonne or $.712 a pound. I don't have data on Midwest premiums but I'm pretty sure they are less than 10 cents a pound. They are losing money on every pound of aluminum in the third quarter. Should be profitable in 4th even at this level.
Alumina is around $300 a metric tonne but I don't have data to say for sure. They are making plenty of money on alumina but I thought you said aluminum.
No dividend was suspended. No logical explanation was ever provided as to why it was suspended. Recognize prices are down and they are going to start burning cash but it was only $700K a quarter.
No one is talking bankruptcy at this point in time to my knowledge. Might very well happen in 2019 but for now it seems unlikely although who knows, maybe LME goes to $1,000 a metric ton. It won't stay there but it could happen.
Biggest reason would be refinancing the 11% notes at a discount to face. That would make sense. Issuing convertible bonds or bonds with separate equity kicker of some kind. Bond holders would prefer a straight equity issuance but I don't think that is likely as it would not be in interest of shareholders.
Also conceivable that they would do something with individual units in terms of a sale or joint venture. I think that is a low odds event as well as it would require involvement of bond holders.
Law firm would draft bankruptcy papers should they go bankrupt in 2018 and the mortgage banker hired by Noranda is Morgan Stanley.
When the industry is in stress people tend to hunker down. There are two investment banker dreams that they might be able to do:
Purchase $175 million in unsecured notes at a huge discount. It is looking more doable with the collapse in bond prices.
Alumina refining in America is ripe for consolidation. Glencore closed their aluminum smelter so they really don't want alumina refining. Century indicated they wanted to expand further up to secure supplies and all are connected to Noranda's bauxite mine as that is their supply source. None of this will happen soon but a bump in aluminum prices and odds increase exponentially.
LME continues down.
Bond holders are getting killed. I guess they thought BOD was just going to issue equity. Why they'd think that is beyond me but I guess I was a little bit worried about that.
In meantime, LME is down again. That isn't good news for anyone.
Probably adds a couple of million in cash per quarter but that is just a wild guess. Will add a fair amount to sales growth. Business isn't just about home runs, have to hit a bunch of singles.
Agree on equity/debt. All things considered I would prefer Apollo even though I will say I don't trust them.
Rolling mills and Gramercy did well. Not got my arms around primary.
Those were "old and cold" estimates. Creates a negative headline and that moves share prices but the news was pretty good. Will turn unless call is really bad for some reason point or LME declines.
If they do a straight equity offering without redeeming some portion of the unsecured notes at a discount the result would probably be litigation.
If they do nothing but talk about the Core program savings tomorrow shareholders will have every right to be disgusted.
Just remember that it is the equivalent of an option. It can go to zero although it would take awhile to get there.
Published an article on Seeking Alpha. Should be available on "free site" later today.
Also published a long paper on my Seeking Alpha Instablog. Search for Jeff Boyd and you should find it.