Broker Liberum raised its price target for Thungela Resources Limited (LSE:TGA) today after better than expected results today.
EBITDA of R16.7bn topped Liberum’s R14.9bn forecast on higher coal price realisations, as certain coal qualities attracted higher than normal premia, offsetting the destocking of lower quality material.
The broker also noted management has stuck with its capital returns policy, that all cash after a buffer of c.R6bn is surplus and will be distributed to shareholders and expects a final dividend off R67 per share to follow the interim pay out of R60 announced today.
Liberum increased its price target to 1,855p from 1,800p and shares advanced 2.56% to 1,439p after the news.
CT Automotive dives after profits warning
CT Automotive warned on Monday that despite first half revenues being ahead of expectations that gross margins were lower than expected.
The supplier of interior components to the global automotive industry said this reflected two factors: 1) Covid-related lockdowns in China in H1 2022 and the associated disruption to freight meant the group had incurred around $1.6mln of additional freight costs; and 2) inflationary cost pressures and a shortage of labour has led to the group's UK manufacturing facility becoming loss-making, impacting H1 gross margin by c. $1.7mln.
As a result, CT has closed its UK manufacturing operations, which accounted for c.5% of group revenues.
Analysts at Shore Capital now forecast a first half EBIT loss of $7mln EBIT loss and $21mln of net debt (exc. leases).
US legislation boosts Velocys
Shares in sustainable fuels technology company, Velocys, received a boost from news of the passing of the "Inflation Reduction Act of 2022" by the US Congress.
The share price rose 12.69% on the news.
Subject to becoming law, this landmark piece of legislation allocates approximately $369bn to reducing greenhouse gas emissions and incentivises expanded production and use of domestic clean energy.
Sustainable Aviation Fuel ("SAF") tax credits are an integral part of the Act, with SAF the only current commercially scalable decarbonisation route for the aviation sector.
As announced in November 2021, Velocys has already secured long-term offtake arrangements for 100% of the SAF output expected from the Bayou Fuels facility..
This critical legislative development in the US follows last month's launch by the UK Government's Department for Transport of its Jet Zero Strategy, setting out the Government's approach for achieving net zero aviation by 2050.
This includes an ambition for a minimum of five commercial-scale SAF plants to be under construction in the UK by 2025, and a mandate for the equivalent of at least 10% SAF to be blended into conventional aviation fuel by 2030.
Henrik Wareborn, CEO, said: "This development, coupled with the UK's launch of its Jet Zero strategy, represents a major endorsement of Sustainable Aviation Fuel, and Velocys' proprietary technology to produce it."
Treatt plunges after profits warning
Shares in Treatt, the fragrances and flavoring manufacturer, plunged 32% to 256p after it warned that full year profits would be below expectations.
The group said it now expects profit before tax and exceptional items to be between £15.0mln and £15.3mln reflecting lower consumer demand, foreign exchange rates, inflation and lockdowns in China impacted its margins.
The company’s tea category will be particularly hit as lower consumer confidence has impacted demand for that category, leading to lower year-on-year sales.
Peel Hunt pointed out the that new forecasts compared to consensus expectations of £21.7mln but it said most of these adverse factors should prove temporary.