In today’s briefing:
- S&P/ASX 200 Index Adhoc Rebalance: Strike Energy (STX) To Replace Costa Group (CGC)
- Selected European HoldCos and DLC: January’23 Report
- Metals Acquisition Ltd Secondary Listing – Too Much to Pay for a Single Asset
- HWKN: Eyes of Free Cash Flow
- SDRL: Drilling into the Calendar
- Revoil S.a. -9M-11M FY2023 Results Presentation
- LVG: The Next Tanzanian Gold Producer + Big Upside
- HELLENiQ ENERGY – Shareholders reduce holding
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S&P/ASX 200 Index Adhoc Rebalance: Strike Energy (STX) To Replace Costa Group (CGC)
- Shareholders have approved Costa Group Holdings (CGC AU)‘s acquisition by Paine Schwartz Partners and the stock is expected to stop trading after the close on 8 February.
- Costa Group Holdings (CGC AU) will be replaced by Strike Energy (STX AU) in the S&P/ASX 200 (AS51 INDEX) at the close on 8 February.
- There will be positioning in Strike Energy (STX AU) but we do not expect it to be excessively large and there could be some outperformance over the next week.
Selected European HoldCos and DLC: January’23 Report
- The discounts to NAV of covered holdcos have mainly tightened during January. Discounts to NAV: C.F.Alba, 47.5% (vs. 49.1%); GBL, 37.1% (vs. 36.6%); Heineken Holding, 16.6% (vs. 16.7%);
- Industrivärden C, 3.8% (vs. 5.4%); Investor B, 7.9% (vs. 13.5%); Porsche Automobile Holding, 42% (vs. 37.1%). The spread of Rio DLC widened to 25.2% (vs. 24.2%).
- What seems interesting: in holding trades, GBL/vs. listed assets, Porsche SE/vs. listed assets and the Rio DLC: long RIO LN/short RIO AU.
Metals Acquisition Ltd Secondary Listing – Too Much to Pay for a Single Asset
- Metals Acquisition (MTAL US) is looking to raise up to A$300m (US$197m) through its ASX secondary listing.
- The proceeds will be used to repay Glencore’s deferred consideration facility for the MTAL’s acquisition of its CSA copper mine, amongst other uses.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
HWKN: Eyes of Free Cash Flow
- Hawkins (HWKN) reported fiscal third quarter (December) results benefiting from higher mix of water treatment sales as the industrial segment dealt with its seasonal soft period
- HWKN has grown its water treatment segment through acquisitions including several made towards the beginning of the December segment
- Water treatment sales were approximately $9 million less than expected due to the timing of acquisitions closing and their sales contribution during a seasonally soft quarter for the segment
SDRL: Drilling into the Calendar
- The contract environment is proving advantageous for Seadrill (SDRL) with the Company announcing two more contracts
- We estimate one of the contracts has a day rate of $500,000 and should result in other bidding activity to reach and eventually exceed this level in 2024
- The day rates SDRL has announced for the latest contracts, along with the two contracts in December 2023, demonstrate there is demand to pay the higher day rates
Revoil S.a. -9M-11M FY2023 Results Presentation
- Revenue decreased by 12.3% in 9M 2023 standing at EUR 602.22M (vs 686.46M in 9M 2022), resulting from a combined drop in the fuel prices and volume sold.
- Cost of revenue decreased by a similar rate resulting in only a slight reduction of Gross Profit by 2.7%
- However, EBITDA decreased by 11.1% to EUR 9.08M (vs 10.22M in 9M 2022), EBT fell by 57.6% at 2.23M (vs 5.28M in 9M 2022), and Net Income by 57% at 1.79M (vs EUR 4.16M in 9M 2022).
LVG: The Next Tanzanian Gold Producer + Big Upside
- LVG’s strategic partnerships & recent acquisitions have set the Company up for a transformational 2024.
- The Company has substantial upside through its partnership with Barrick Gold as well as other exploration potential.
- Lake Victoria Gold (LVG:TSXV) is a Canadian exploration and development company focused on the growth and consolidation of the Lake Victoria Goldfield in Tanzania.
HELLENiQ ENERGY – Shareholders reduce holding
Hellenic Republic Asset Development Fund (HRADF) and Paneuropean Oil & Industrial Holdings (POIH) have announced that they have sold 33.6m shares in HELLENiQ ENERGY, representing 11% of the existing ordinary shares. These were sold via an international private placement at a price of €7.00 per share. Although this is a third-party transaction, this will benefit the liquidity of HELLENiQ ENERGY’s shares.