RE: RE: RE: RE: Insider Buying Liberty, you may be looking at Fortress through rose coloured glasses. The last quarter was very disappointing at Thurso for a number of reasons. It has been frustrating that Thurso has not been able to consistently ramp up production and maintain 90% capacity. Every time the mill is not running at full capacity the cost per tonne goes up which results in a loss of potential cash flow. These production problems are not new and they have been going on for multiple quarters. Those type of micro problems are fixable and eventually Thurso will operate at full capacity. Who knows how long this will take as I would have expected the mill to be operating optimally by now,.
However, the more disturbing trends are at the macro level. Dissolving pulp prices have collapsed and it is hard to see the prices recovering anytime in the near future. There is a lot of additional dp capacity that will be hitting the market and I don't believe companies will cancel the additional capacity especially once they begin the conversion process. It takes so long to convert a mill that you hit a point in the process where there is no turning back. Also, It is very disturbing to realize that the dp hedges that were put in place are not worth the paper they are written on. The hedges were put in place for times like these to protect cash flow when dp prices are low. Now what protection do we have especially when the company has a levered balance sheet?
Landquart is a disaster and I don't understand why management continues to lose money on the operation quarter after quarter. Is there no way to put the mill on the equivalent of care and maintenance until capacity can be better utilized? Surely has to be cheaper than losing money every quarter while management crosses their fingers and hopes that some bureaucratic government will give them new orders.
Chad needs to take action if the company wants the share price to improve. Talk is cheap when he talks about taking the company private or spinning out divisions. If you are going to talk about it then take action and do it. In defense of Chad we did get the stock split that he promised. The only problem is shareholders didn't get additional shares. One final thing. Chad needs to communicate with shareholders better about the progress at Thurso. He should be publishing monthly updates as to how Thurso is doing in terms of production utilization. shareholders shouldn't be blind sided. It was completely amateurish the way that Chad released lousy earnings on a Friday when the market closed. Was he thinking that somehow nobody would notice?
At best I see this stock having a dead cat bounce. It's hard to see the share price on a sustainable rise unless the company takes action to realize the value in the company. i don't think Thurso will be the driver of the share price until the dp market improves and that could take far longer than most people realize.