Quarterly resultsThe market did not like this morning's 3rd quarter results. Prices were below expectations and sales volume in Q3 was negligible. They clearly decided to produce in October and November in order to have some production to show for all that effort in capital and time to get the plant running and deferred the final adjustments until a scheduled December overhaul.
Still, they believe that the plant will be commercial in January, gradually ramping up from 20 000 tons per month to 40 000 tons per month over the year and expect 2014 production of 450 000 tons. The price is also not as big an issue as one would think: the depreciation of the Brazilian currency reduces both the price they get and the cost of their raw materials, so they still expect robust margins next year.
Most important for long suffering shareholders: no new equity offerings for the time being with essentially the expansion at Santana financed by the sale of a chunk of that project and the surplus cash produced by Itafos.
It boils down to: Do you believe that they can get it done? If yes, the present price is a good entry point. If not: sell.