This fact was already covered during the CC.
Cash went to buy down the debt from $38m( AS OF 6/30)
down to $18M(round figure)..
No of shares out as of Aug 13 ?
First test for you folks when you read the 10Q.
Needless to say Share Count on Yahoo is behind.
More as I read in details.
1. Prior to earnings, $15M growth projects - with income returns - by early 2015.
Gross 20, 40% returns were quoted.
One could done the list toget average ROI
2. By year-end, California operations will be re-planned ( either sales at higher price,
or cut dowoperations...). So 2015 results in Illinois will go get bogdown by California?
o Confirm production projection of 7.5% + or - 1% increase by y/end 2014
o froma Q&A - From Feb 2014 to Today, Debt Ratio forecasted for Y/E 2015
Reconfirm A MAKE of 2.5 x EBITDA. ( in February had projected a Miss).
Answer: all the variables have changed to the point that this new assessment is doable.
o Had a 3B cut due to Productivity.
Past news items ( Tenaris...) suggests that PBR has re-aligned its expenses( deferring delivery, using items in stocks, just-in-delivery...). This will show up in earnings.
Increased substitution of oil revenues with biodiesel, ethanol will show decreased costs.
Expect a beat above analyst .55 number.
Ag products out of Ukraine to Russia are done at 'local' prices. Since Russia raised natgas cost to Ukraine, Putin move here may be a push back to paying full price for Ag products. Another big bear move.
But hunger has a way to change one's opinion. Putin may turn his own people when the shelves are empty.
As for fertilizer, UAN from Russia ( not Ukraine) may be a product to benefit. Since Russian products usually flood the supply line.
Cold war getting icy.
ADM comments on 8/5 will also enlight the market. They are followed more widely than the other ethanol producers.
"Their livestock needs these DDGs" "and boycott can only go on so long".
Time to assess these statements:
a) DDGs is a feedstock for the livestocks but not the only...
b) as long as their own stock is in surplus mode and they can roll it over with next year harvest at a cheaper price, then they may choose to deplete their own stock of 'old corn'.
This MIR 62 conflict is a political communications but in reality it is a logistic issue. Proof : they are buying crops from next year harvest.
The US challenge: more ethanol throws off more DDG; with each week at summer volume, DDG prices plunge.
REX's quarter , May to Juy, will show this impact the most among ethanol producers.
Still a Y-t-Y good return, but imacted by DDG.
Watch ANDE for impact ( less impact but Avril -June business shows this trend).
DDG Prices Drop Another $20, No End in Sight
Just when it appears that prices of dried distillers grains might finally end their three-month freefall, China placed yet another demand on U.S. ethanol producers and all hell broke loose in the market.
China announced last week that it will now require official certification accompanying all DDG shipments guaranteeing it contains no trace of the GMO corn trait MIR 162. While the U.S. is unlikely to agree to China's demand, the announcement literally blew up the market, causing DDG prices to plummet.
Between China's latest debacle and prediction of a record crop, the DTN weekly DDG spot price average fell a whopping $20 per ton in the past week, from $125 per ton last week to $105 this week. This is the lowest the average has been in almost four years, as the last time the average was at $105 per ton was in mid-August 2010.
From a call with IR after CC
o 2.5mil warrants - thus 2.5mil shares - were issued in last transaction on 7/29
o Total no' shares now is 24mil
o 1.6 mil warrants left
Following NOT from the call!!!!
So one can summize
a) plenty of shares floating now; interesting to see next short count report
b) total number of shares to come to approx 26.5M
c) management Bonus shares might make this 27M ( my guess).
If spread is 80-90c per gallon, take out 40-45c for Operations.
If one assumes 20c- 30c Gross Margins on 45mil gallons/qtr,
= $9M -12.5M Gross * times 91% ownership
Take out $4M SGA and $1M (Interest+pref div).
Divide by 24 mil shares
Positive earnings but not as big as when DDG/WDG was selling at a premium.
Growth projects are needed to bump net earnings to $10M per quarter..
Number of shares Gevo 90Mil AMTX 200M
Products ethanol and Biofuel
Production ethanol 4.5mil /quarter vs 16M quarter
Production butanol ??? vs biodiesel(in India)
By-product DDG vs WDG
Share Price 51c vs $10!
Equity value $45M vs 200M!!
Like others in the ethanol industry, since ADM is one of the highest capacity and sales,
a) DDG prices will affect 2Q and forecast
b) Transporation of goods to China (corn and DDG?)
Separately, adjustment for corn value in inventory might be a bog hit.
significant enough for a dip...
a) 22M shares as of 6/30 is a weighted figure
b) $19M in cash gained from warrants is for how many net additional shares?
c) It was also sated that there is 1.6M warrants left as of 7/29
So the question is : as of 7/30/14 how many common shares are isssued to estimate
this 3rd quarter earnings?
An alternative Stage III sanction would be to assist Europe to buy oil from different sources and to lower prices. $90/barrel and then $80 might help Russia bend on its expansion zeal an to retreat its troops without loosing face. .
Not a misprint... see below.
The number itself ($2.24) is not the observation here.
The Delta between East ( a more stable market) and the West, or so call
WEST pemium is down to zero ( from 20c-40c during the peek of train transport hang-up).
Here is the 7 -day data track to address that this not a misprint...
7/18 the print was 2.40-22.43
Then on 7/21(Monday) drop to 2.21 ---then I thought 'just one day'
On 7/22 and 7/23 went up to 2.34 ( mid-way between between the two previous points)
on 7/25 back to 2/24.
All along 7/22 and on, East barges spots are in the 2.22-2.24 range.
East and West spot ethanol prices about level on Friday- $2.24 gallon.
This is just TEN cents above Argo at $2.14.( premium is down from the 40c and up in 1Q).
And Argo is FLAT with CBOT August quote.
With PEIX corn basis at $1.60/bushel, spot premium does not cover basis;
Replenishing working capital means the CASH stays at RNF leveland does not move to RTK as dividends (where it pays for management bonus). Growth Projects will expand
Good assets management.
By the way less cash is needed as natgas prices comes down ! 3.70's is the new ballgame!