Daily Brief Energy/Materials: SGX Rubber Future TSR20, Paladin Energy, United States Steel, Boustead Singapore Limited, Eastman Chemical Co, Nagaoka International, Select Water Solutions, Arq, VAALCO Energy, Condor Energies and more

• Thailand likely to receive less rains in the coming one-month period  
• Indonesia, Vietnam, Cambodia likely to have above normal rains  
• WMO predicts 60% chances of La Nina developing

• Paladin Energy faces water supply disruptions from NAM Water in Namibia, leading to a drop in guidance for Langer Heinrich uranium mine.
• The company has adjusted its FY25 uranium production guidance from 4-4.2 million pounds to 3-3.6 million pounds.
• Despite the challenges, Paladin Energy remains confident in meeting customer delivery obligations and has flexibility in contracts to manage the situation.

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• United States Steel Corporation (U.S. Steel) has reported its financial results for the fourth quarter and full year of 2023, showcasing another period of robust financial performance despite the challenging global economic environment.
• The company ended the year with net earnings of $895 million, or $3.56 per diluted share, and adjusted net earnings for the fourth quarter were $167 million, or $0.67 per diluted share.
• These results were bolstered by better performance across both the Mini Mill and Tubular segments, and favorable year-end inventory adjustments in the North American Flat-Rolled segment.

• Given Boustead Singapore Limited (BOCS SP) operating metrics just a minimal 1-2% growth through cycles should offer at least 50% upside.
• Boustead is a solid investment with diversified exposure in energy, geospatial, and real estate sectors, with a focus on sustainability, and steady project pipeline supporting long-term visibility.
• Boustead Singapore Limited (BOCS SP) is a deep value play, which prioritizes stability and risk mitigation over aggressive growth. 

• Eastman’s latest discussion primarily centered on navigating the prevalent market challenges and exploiting growth through innovation and strategic initiatives.
• As the world continues to reel under economic pressures, including high inflation and interest rates, Eastman envisions a recovery trajectory reinforced by strategic product developments and market expansions.
• Eastman indicates a mixed financial environment with several moving parts.

• Q1 FY06/25 revenue increased 20.3% YoY to JPY1.8bn, with operating profit up 18.1% YoY to JPY261mn.
• TRANSFORM 2027 targets JPY16.0bn revenue by FY06/27, with Water-related business aiming for JPY8.3bn (CAGR 41.3%).
• Nagaoka plans JPY6.0bn for growth investments, maintaining a 20% dividend payout ratio with a progressive policy.

• Y/Y Water Infrastructure segment revenue increased 41% in 3Q24 and gross profit before D&A increased 99%.
• The strong profit performance allowed Select to overcome a 5% Y/Y total revenue decrease to generate an 11% total gross profit increase.
• Water Infrastructure gross profit before D&A margin increased to 56.7% in 3Q24 from 51.0% in 2Q24 and 40.1% in 3Q23. 

• Arq reported 3Q24 revenue of $34.8 million and EBITDA of $5.1 million, up from $29.8 million in revenue and $0.9 million in EBITDA in 3Q23.
• The strong results were driven by further PAC pricing increases (sixth consecutive quarter of >10% ASP increases), operating efficiency, and the benefits of a more diversified customer base.
• While 3Q is typically the strongest seasonal quarter, the results far surpassed 3Q23 and 3Q22, showing the success of the company’s efforts to restructure its PAC business through improved contract terms and operating execution.

• • 3Q24 WI production was 26,709 boe/d.
• This is above our expectations of 25,740 boe/d and towards the higher end of the guidance range of 24.9-27.6 mboe/d.
• • Vaalco has narrowed its FY24 production guidance range from 23.6-26.5 mboe/d to 24.1-25.4 mboe/d with lower capex (US$110-130 mm vs US$115-140 mm previously).

• • 3Q24 production was 10,010 boe/d; which is line with our expectations.
• • Production has increased to 10,706 bo/ed in the last seven days following low cost work-over activities.
• • With the expansion of the workover programme upon the arrival of the second work-over rig and the installation of additional in-field flowline water separation systems, we expect that this trend will continue.