RE:RE:Sales volume versus Production volumeMy initial thoughts on Q3 results and a few responses to the many good points being made here:
- meh indeed! I agree Pedro, the Q2 results really had me looking for far better Q3 results. As you say maybe there were many front loaded orders. Still, with such a ramped up sales team, a 68% improvement over very disappointing Q3 2019 results is not in my opinion a great quarter
-I found the switch to giving an annual target only in BRL to be a complete cop out. As far as I remember the company has always set goals in tpy and CAD/BRL. So, no 2021 tpy goal means if the BRL currency were to hypothetically return to pre-pandemic levels, the company would meet their target by only increasing 2021 sales by around 34K tonnes. If, however, all inputs remain the same, 50M BRL assumes a 2021 target of around 327K tpy, a 50% increase over the 2020 target and only a 30% increase if they end up selling 250K tonnes this year. For me this is a troubling setting the bar low development leading me to think my overall growth expectations are extraordinarily premature.
-sugs, if the overall Brazilian potash market is 9M tpy that is equivalent to 54M tpy of k forte due to the potassium differential, so Verde product is a tiny fraction of the market.
-the improvement in cost of production is a positive development. Even without the BRL devaluation the gross margins were 57%.
- the wording of the NR was much improved over the Q3 19 NR but overall these results are still disappointing and I am expecting a sell off in the shares as traders exit. Hope I’m wrong about that