08/07/2011

NYRSTAR CE MATIN

DE ING....QUI NE TIENT PAS COMPTE DE CETTE LOI QUI POURRAIT PASSER...

NYRSTAR: 1H11 results preview: impact from mining no longer immaterial

Nyrstar reports 1H11 results on 27 July before market opening. We expect Nyrstar to report a 45% increase in normalised EBITDA to €134.7m in 1H11F, mainly driven by the early ramp up of its mining assets. The latter barely impacted 1H10 EBITDA (€7.0m), but should, for the first time, have a more material impact (€48.4m) in 1H11F. Key drivers of the mining EBITDA are the zinc in concentrate production (INGF 90kt) and the overall C1 cash cost (INGF US$1,536/t). We expect normalised smelting EBITDA to increase 13.2% to €96.2m, driven by a 6.0% increase in zinc smelting production to 562kt and significantly higher by-product revenues, while being held back by YoY lower treatment charges. Bottom line, we expect a 27% increase in normalised net profit to €54.2m. But at the same time, normalised EPS should decline 22% to €0.33, due to the immediate dilutive impact from the €490m rights issue in early 2011, while a significant part of the EBITDA contribution from the acquired mines still has to materialise in 2H11F and FY12F.

We expect net debt down to c.€173m at the end of 1H11 from €296m at the end of 2010, as net debt should take into account the proceeds from the rights issue and only take into account the acquisition of Farallon Mining at the start of the year (€296m), while the acquisition of Breakwater Resources should be paid in 2H11 (€473m).

Nyrstar typically does not provide quantified FY guidance, hence the outlook statement is most likely no trigger. We continue to focus on 2012F, in which most of the acquired mines should be ramped up close to full capacity. On our estimates, Nyrstar trades at 4.0x EV/EBITDA 2012F. Hence, even after the recent rally, valuation remains at the very low end of peer group valuation. We continue to target 5.0x EV/EBITDA 2012F.

Price: €10.25. Last published: target price: €12.0; recommendation: BUY

Filip De Pauw, Brussels +32 2 547 60 97

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09:53 Écrit par swingteam-cc | Lien permanent | Commentaires (0) |  Facebook |

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