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Incitec Pivot Ltd T.IPL


Primary Symbol: ICPVF

Incitec Pivot Limited is an Australia-based manufacturer and supplier to the resources and agricultural sectors. Its segments include Asia Pacific and Americas. Asia Pacific segment includes Fertilisers Asia Pacific (Fertilisers APAC) and Dyno Nobel Asia Pacific (DNAP). Fertilisers APAC manufactures and sells fertilizers in Eastern Australia and the export market. It also manufactures, imports and sells industrial chemicals to the agricultural sector and other specialist industries. DNAP manufactures and sells industrial explosives and related products and services to the mining industry in the Asia Pacific region, Turkey and France. Americas segment includes Dyno Nobel Americas, which manufactures and sells industrial explosives and related products and services to the mining, quarrying and construction industries in the Americas (Canada, Mexico and Chile) and initiating systems to businesses in Australia, Turkey and South Africa. It also manufactures and sells industrial chemicals.


OTCPK:ICPVF - Post by User

Post by MOJOJONOon Mar 30, 2020 3:45am
357 Views
Post# 30858917

Inter Terminals and the global oil glut Contango

Inter Terminals and the global oil glut ContangoNot a deep thoguht here, but clearly we should expecting Inter Terminals to be running at maximum as counter cyclical support for IPL for this quarter and at least others in the future. There's been news lately of an increasing glut of oil internationally with lower demand due to COVID 19; and the Saudis trying to overwhelm competitors. With lower supply of storage you would also expect higher prices.

Contango (when current spot price is lower than future contract price) means traders/companies will hold oil in hopes for better future prices. To hold oil they need somewhere to store it whether ocean tankers or land based storage. https://www.forbes.com/sites/gauravsharma/2020/03/29/oil-futures-in-record-contango-of-over-10-for-first-time-since-2009/#3a713d5332fd

Inter Terminal's utilization rates have fluctuated over time, but during the 2014-2016 oil crash utilization actually ramped up significantly. IPL purchased additional storage in Sweden back in 2015, when demand was high; then again in 2018 in Amsterdam and UK (NuStar Energy Europe) when utilization was low. I don't see any reason why we won't see utilization rates surge with oil weakening starting late last year and traders trying to capture contango. In fact Q4 2019 already showed a surge 93% utilization rate vs a very weak 68% in Q4 2018! Demand will quickly outstrip supply. Contracts are about 1+ years long . https://www.interpipeline.com/files/pdf/investor-presentations/IPL_-_Investor_Presentation_-_March_2020_-_FINAL.pdf

On top of this business is in UK and Europe. While GBPCAD has been weak EURCAD has been strong. We may see a bump from that.

This business segment pulled in $294MM of revenues and $104MM of EBITDA for 2019.
https://www.interpipeline.com/files/pdf/fact-sheets/q4_2019/IPL_-_Bulk_Liquid_Storage_-_Fact_Sheet_-_Q4_2019_-_FINAL.pdf


2013: 84%
2014: 79%
2015: 94%*
2016: 98%
2017: 96%
2018: 77%*
2019: 87%
2019 (Q4): 93%



https://www.nytimes.com/2020/03/26/business/energy-environment/oil-storage.html


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