Ghost Bites (Alphamin | Coronation)

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Alphamin has caught up on delayed sales (JSE: APH)

EBITDA is vastly higher in this quarter than the immediately preceding quarter

In a mining group, there’s a big difference between commodities processed and commodities sold. Getting the stuff out of the ground is only the first part of the battle. For the three months ended March 2024, Alphamin’s production is only 1% higher than in the three months to December 2023. The difference is that sales more than doubled as the company dealt with a sales backlog caused by road conditions.

Needless to say, this means big things at EBITDA level. There’s a 156% quarter-on-quarter increase to $52 million. Of course, it helped a lot that the tin price was 7% higher at a time when the company could play catch-up on sales.

For reference, the tin price is up 12% year-on-year. The sales numbers aren’t a useful year-on-year comparison because of the sales backlog.

At Mpama South, tin production has been delayed by a few weeks. Underground development is on target though and ore stockpiles are being established ahead of the plant commissioning.

Thanks to a significant increase in the cash position, net debt has reduced from $73 million at the end of December 2023 to $28 million as at the end of March 2024.

The board will meet on 26 April to make a decision about the final FY23 dividend.

Coronation: be careful of the tax (JSE: CML)

No, not their tax fight – your own taxes in the odd-lot and specific offer

Coronation has finalised the offer price for the odd-lot offer (for those holding fewer than 100 shares) and specific offer (up to 500 shares). The price is R33.6191281, which is a 10% premium to the 30-day VWAP.

The very importance nuance here is the tax, as the offer is structured as a dividend. If you’re subject to dividends tax (e.g. an individual holder), this is almost certainly worse for you than selling shares in the market. If you hold through a company and hence don’t pay dividends tax, then this is likely to be a better outcome than selling in the market.

Please consider the tax carefully in making a decision here and speak to your tax advisor. This is more complicated than a normal offer structure.

The other very important nuance is that the odd-lot offer is something you have to opt out of i.e. the default is to accept it. The specific offer needs you to opt in i.e. the default is to have rejected the offer. Please read the circular for full details.

Little Bites:

• Director dealings:
  • An associate of JD Wiese (son of Christo) bought shares in Shoprite (JSE: SHP) for just over R1 million.

• NEPI Rockcastle (JSE: NRP) allowed shareholders to choose whether to receive a distribution as a cash dividend or a capital repayment. It mainly comes down to taxation consequences. In case this interests you, 37.1% of holders chose the cash dividend and 62.9% chose the capital repayment (the default).

• Oando (JSE: OAO) has finalised its 2022 financial statements at long last. The company will now get the interims and final statements for 2023 done. The board has committed to publishing these financials by the end of July 2024.

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