Metro set to beat production guidance

By Trevor Hoey. Published at Dec 9, 2019, in Mining

Metro Mining Ltd (ASX:MMI) could well exceed its yearly bauxite shipping guidance after another strong performance in November.

Pleasingly, management is taking a conservative stance with guidance, but mentioned that there was now a likelihood of meeting the upper end of guidance which is in a range between 3.3 million wet metric tonnes and 3.5 million wet metric tonnes (WMT).

If Metro can replicate its November performance, that would equate to 2019 production of nearly 3.7 million WMT.

Based on combined bauxite shipped in October and November, the average for the quarter is about 480 WMT per month.

If the company were to achieve at this level, the yearly shipment would be about 3.7 million WMT, a development that will be well received by investors and no doubt provide considerable share price support.

Commenting on the group’s performance for the full year, as well as the full-year guidance implications, Metro Mining managing director Simon Finnis said, “This is another very pleasing result for the team, both on and off site.

‘’We are on target to meet the upper end of guidance.

“It has been a very successful operational year and I am extremely proud of the effort and performance of the Metro team and our contracting partners.’’

Revenue generation to support Morgan’s price target of 35 cps

Interestingly, Morgans’ resources analyst Chris Brown ran the ruler across Metro Mining at the end of October.

At that stage he projected an above guidance performance, forecasting 3.6 million tonnes for fiscal 2019.

Based on these numbers, Brown expected Metro to generate a net profit of $22.1 million from revenues of $204 million.

This represents a PE multiple of 9 relative to Monday morning’s opening price of 14.5 cents.

While this appears to be extremely conservative for a company with an established operation and clear production and earnings visibility, the story is even more compelling based on 2020 metrics.

This will be the first year Metro will be producing at full tilt for the full nine month period between April and December 2020 inclusive.

Brown is forecasting the group to ship 4 million tonnes of bauxite in 2020, generating revenues of $237.8 million and a net profit of $42.1 million, representing year-on-year profit growth of about 90%.


Where to invest $1,000 right now

When the experts at Next Investors have a stock pick, it may pay to listen.

The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.

They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.

Click the link below to see what they are currently investing in.


SEE THE PORTFOLIO

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

Publishers Notice

The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X