In today’s briefing:
- Event Driven: India Glycol, A Demerger Catalyst, Capacity Expansion
- Giga Metals Corp – Mining Monthly: February Edition
- ITMG IJ Q4 FY24: Coal Price Decline Squeezes Margins, FY25 Costs To Increase
- OMG: Continues to Hit Strong Mineralization at Wenot
- PEMEX 4Q24: High Carry, But Risks Outweigh Rewards
Event Driven: India Glycol, A Demerger Catalyst, Capacity Expansion
- The demerger of three verticals will separate biopharma and profitable spirits from bio-based specialties and performance chemicals will be the catalyst for the company.
- The expansion in potable spirits, set for completion by March 2025, is expected to drive growth in this segment, alongside anticipated recovery in the core chemical business.
- The Potable spirits segment accounted for 45% of revenue but contributed 58% of EBITDA margins, benefiting from backward integration that drives higher margins.
Giga Metals Corp – Mining Monthly: February Edition
- After January’s strong gains in the metals and mining markets, February saw further growth across spot prices with the equities lagging due to cautious investor sentiment.
- In February, gold hit all-time highs up 3.4%, silver was up 0.8%, and copper up 6.1%.
- The equities underperformed compared to the metals, with the GDX up 1.9%, GDXJ up 0.5%, and SIL up 0.3%.
ITMG IJ Q4 FY24: Coal Price Decline Squeezes Margins, FY25 Costs To Increase
- Indo Tambangraya Megah (ITMG IJ) reported FY24 revenues of $2.3 billion and profits of $374 million, reflecting declines of 3% and 25%, respectively, consistent with expectations amid lower coal prices.
- The company will encounter higher costs in FY25 as the B40 biodiesel mandate takes effect. This is expected to put pressure on margins for all coal producers.
- Alongside declining coal prices, we anticipate profits will fall to $250-300 million. This positions the stock at an FY25 PE of 5- 6.5x with a 12-13% dividend yield.
OMG: Continues to Hit Strong Mineralization at Wenot
- Omai announced assay results from the final three drill holes as part of its 26-hole 13,716m 2024 drill campaign.
- All three holes intersected strong mineralization with the highlight being 5.21 g/t Au over 19.3m, including two higher-grade sections.
- Results are pending for an additional 8 holes at Wenot drilled this year as part of the 10,000m 2025 drill program.
PEMEX 4Q24: High Carry, But Risks Outweigh Rewards
- Weak 4Q24 results, rising leverage, and lack of a clear plan heighten credit concerns.
- We downgrade Pemex to Underperform. In our view, the absence of a clear financial plan under the current circumstances significantly undermines Pemex’s management credibility in addressing its serious debt challenges.
- From a credit perspective, results were marked by a 27.1% sequential decline in LTM adjusted EBITDA, while total debt decreased by $2.1 billion.
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