Vicwest Inc VICUF

CIBC Reaction to Q4

[retiredcf]

 

 

Vicwest Inc.

Q4/12 In Line - Lowering Q1/13 Estimates, But FY13 And FY14 Estimates Unchanged

? VIC reported Q4/12 EBITDA of $8.7MM, which was in line with our estimate of $8.5MM, but slightly lower than consensus at $9.4MM. Revenues for the quarter came in at $103MM, which was in line with expectations, but down 5% year-over-year due to lower Vicwest BP revenues.

? Despite a challenging outlook for H1/13, having commissioned a new IMP plant (increased capacity by 50%) and completed a new roof automation line (coupled with robust grain bin demand), we believe VIC will overcome near-term challenges and achieve EBITDA growth of 15% in 2013.

? Westeel's H1/13 will be impacted by a shift in buying patterns (AGU managing working capital and spreading sales through year vs. Viterra volume ordering and getting volume discounts) for grain bins, lower Quebec building product sales and lower frack-pond sales.

? A recovery in Vicwest BP earnings still remains a 2015 story, although we do expect margin improvements with new ERP system implementation and higher contributions from IMP sales. We maintain our $16 price target and Sector Outperformer rating with no material changes to 2013/14 estimates

[Honestjane]

Interesting update.  Anyone know what will drive the $100M IMP sales estimate.  2 plants seem to be generating $40-$50M prior to new plant opening.  Is there a compelling event that will make this jump dramatically by 2014 in a competitive still econonomically challenging environment?

[Honestjane]

Price seems to be getting back to where it was in early Jan.

[retiredcf]

Agreed but it's on low volume which always presents buying opportunities. Concensus targets are 25% higher and when combined with a nearly 5% dividend, makes for a nice potential return.  GLTA

[Honestjane]

Ok, thanks.  A few risks discussed in the Q4 call tho:  impact of Glencore acquisition on Viterra on Westeel orders; impact of Carbonneau inquiry on construction sector in Vicwest eastern region;  high fracking pond inventories in the natural gas sector so limited ST growth opps there.  Continuing challenging environment in EMEA perhaps offset by growth in India.? Wondering if