RE:Q2 FinancialsClipper2 wrote: Will be announced on Aug 10th.
As the price of V2O5 increases the costs should not increase too much.
So without any unexpected cost surpises I have put together some numbers.
I'm staying with my original prediction of approx. 55m Revenue and .14m to 15m net income.
Not including any iron-ore sales and Royalties.
I hope this darn post formats correctly.
| | Q3-20 | Q4-20 | Q1-21 | Q2-21 | Q2-21 |
| | | | | | |
| production in tonnes | 3,092 | 3,340 | 1,986 | 3,072 | 3,072 |
| pounds per tonne | 2,204.62 | 2,204.62 | 2,204.62 | 2,204.62 | 2,204.62 |
| production in lbs | 6,816,685 | 7,363,431 | 4,378,375 | 6,772,593 | 6,772,593 |
| | | | | | |
| total tonnes sold | 2,321 | 3,751 | 2,783 | 3,027 | 3,027 |
| total lbs sold | 5,116,923 | 8,269,530 | 6,135,457 | 6,673,385 | 6,673,385 |
| | | | | | |
| revenue actual sales | 27,474,000 | 42,254,000 | 39,801,000 | 46,713,693 | 53,387,078 |
| revenue per lb sold | 5.37 | 5.11 | 6.49 | | |
| | | | | test V2O5 price | test V2O5 price |
| Actual avg price V2O5 | 5.33 | 5.29 | 7.09 | 7.00 | 8.00 |
| | | | | | |
| | | | | avg total costs | avg total costs |
| total costs | 24,122,000 | 36,231,000 | 35,354,000 | 31,902,333 | 31,902,333 |
| | | | | | |
| net income before tax | 3,352,000 | 6,023,000 | 4,447,000 | 14,811,360 | 21,484,745 |
| | | | | | |
| | | | | | |
| royalties | 1,552,000 | 1,958,000 | 1,470,000 | | |
| royalties per lbs sold | 0.30 | 0.24 | 0.24 | | |
Clipper,
Your average costs for Q2-21 are too low and are based on a calculation which is not accurate in my opinion.
Your calculation of the average costs for Q2-21:
24,122,000 (Q3-20) + 36,231,000 (Q4-20) + 35,354,000 (Q1-21) = 95,707,000 / 3 = 31,902,333 representing a cost/revenue ratio of 31,902 / 46,714 = 68.3% which is too low. Have you ever seen a cost/revenue ratio of 68.3% in the financial reports of Largo before?
Please notice that there is a relationship between costs and revenues. So to calculate the average costs over 3 Qs you should first calculate the average relationship between costs and revenues over the 3 Qs, as follows:
Q3-20 revenue = 27,474,000 thus cost/revenue ratio = 24,122 / 27,474 = 87.7%
Q4-20 revenue = 42,254,000 thus cost/revenue ratio = 36,231 / 42,254 = 85.7%
Q1-21 revenue = 39,801,000 thus cost/revenue ratio = 35,354 / 39,801 = 88.8%
Q2-21 average cost/revenue ratio = 87.7% + 85.7% + 88.8% / 3 = 87.4%
Q2-21 estimated average costs = Q2-21 estimated revenue x 87.4% = 46,731,693 x 87.4% = 40,827,767
Thus
Q2-21 estimated Net Income = 46,731,693 (estimated revenue) - 40,827,767 (average costs) = US$5,903,926.