OTCPK:TMBMF - Post by User
Comment by
Alphaseeker1984on Feb 16, 2017 5:22pm
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Post# 25857935
RE:RE:Consolidatiion
RE:RE:ConsolidatiionThe reference period I used to compare is last year's Q2 (Jan-Mar 2015) so the 4mm cash bonus and 10-12mm downtime for Tartas are not in those numbers.
For the FX, I am pretty certain that they will take a hit on this but will be happy if I am wrong. In the long run it does not really matter as I believe the CDN$ will fall back to low 70s and TMB will benefit.
I have looked at some modelling, I have seen your analysis in prior posts and think you have captured the essence. I think 200mm is conservative for 2018-2019. I suspect that TMB's specialty cellulose business is going to see a few good years due to the cotton inventory draw down in China. I think lumber is going to continue higher for the next couple of years, and TMB's capex is expected to produce efficiency gains of 35mm in EBITDA. With regards to paperboard TMB has a great product so I do not see huge downside or upside (demand is fairly contained). A variable is paper pulp. Toss up, if the Indonesian capacity comes online at 2mm tons then its going ot be tough to maintain the EBITDA they are now making on this product.
Also, the EV/EBITDA multiple will depend a lot on overall market sentiment, get a bullish trend and the multiple might be 8-10x. Otherwise, it could stay low 4-5x.
Either way, TMB is poised to produce significant FCF in the next couple of years and the stock should go quite a bit higher from here if the trajectory continues.