RE:RE:Started a PositionPsalm9012 wrote: There's a reason why the stock price is so low. Consider the following: Brazil had record crop production last year. That means farmers made a lot of money. This year is expected to be the second highest crop production year next only to last so farmers will be doing a lot of planting and thus fertilizer purchases. Further, the Real to USD is now over 4:1 meaning good crop export profits and fertilizer too expensive to import. Compare this to the projection of 3.25. You can't have it any better than that which means we should have record fertilizer sales and therefore prices. Yet Itafos got $137US/t for their SSP. This is even well below the lowest price of their sensitivity analysis $160 -$200US/t. Further, phosphate rock was trading over $100US/t earlier this year so what's the purpose of a half billion dollar plant if you can't get much more than that for your SSP? Their projected operating costs were $140US/t but I can't find an actual value for Q2 so it is likely much more. It's only the Conda plant which came from Agrium that's keeping the stock price this high and I don't think they should start on the Farim property until they can show they can make money on anything they do. IMO. Greg
Greg - You took the words right out of my mouth. Very astute observation
" Yet Itafos got $137US/t for their SSP. This is even well below the lowest price of their sensitivity analysis $160 -$200US/t."
I gasped when I saw realized sales prices of $137US/T. Remember in 2012 when the old MBAC management forecasted $200 - $300/T by 2018/9/20? Shows you the value of forecasts.
There are two things that are freightning by this:
(1) It could indicate that the economic proposition of Brazil can't/won't be releazed making the Brazail plant not viable. A total write off.
Or
(2) The SSP economics in Brazil are sound but the company with limited client/sales, a tarnished brand (via MBAC bankruptcy) might have had to sell well below market rates to build relationship with prospective clients.
Look at the inventory numbers as well - They increased significantly all of which I believe is Brazil production with no sales associated with it.
The new presentation is now forecasting a 2018 EBITDA loss for Brazil of between 5 - 10 million dollars.
The company IS Conda - without it ITAFOS dependant on Brazil only would be heading towards further debt/dilution and possible bankruptcy (again). They better sort out Brazil fast otherwise it will be drag on the company going forward.