And that is the definition of irrational apathy. You have ignored the commodity cycle as well as the entrance and exit of the bankruptcy cycle. Cash flow generated from operating activities was USD6 Million less in 2017 for the first half compared to 2013. Cash at end of period vs. beginning were proportionate.......... all be it much less(totals) for 2017 given the bankruptcy
Please explain how I have ignored the commodity cycle and bankrupcy cycle ... I don't follow what you've written above at all. And, by the way, the opposite of love, isn't hate. It's apathy. I'm not apathetic toward MMC management ... I just loathe them.
in 1H 2013, MMC generated $216M of revenues from washed HCC sales. This was the result of 2.2mT of volume and $98/ton of price.
In 1H 2017, MMC generated $241M of revenues from washed HCC sales. This was the result of 1.9mT of volume and $128/ton of price.
If you were to pick, you would clearly prefer the latter scenario because it should be much more profitable. And indeed it was if you looked at the MCC income statement. However, that profitability did not carry over to the cash flow statement. It's that gap -- between reported profits and actual cash flow -- that is concerning.
You could argue that, in 1H 2017, transportation bottlenecks prevented MMC from selling much washed thermal coal which inhibited their cash flow (since thermal coal sales are esentially pure profit). The only problem with that argument is that in 1H 2013, MMC only generated $2M of revenues from that category (versus $5M in 1H 2017).
So, the question stands, why did MMC translate so little of its operating profit into operating cash flow? Well, IR told us that $30.2M of debt restructuring costs were paid for out of operating cash flow. This would mean that MMC would have generated $60M of operating cash flow. That is a lot better than $28M, but before we take a victory lap, we should recall that MMC generated $34M of operating cash flow in 1H 2013 when HCC prices were $98/ton.
If HCC prices were $98/ton in 1H 2017, MMC should have roughly generated (1.9mT / 2.2mT) x $34M in operating cash flow, which equals $29M. The extra $30/ton that it generated on HCC sales (purely from improved pricing) should have mostly fallen to the bottom line in the form of cash ($30 x 1.9mT = $57M). Let's be conservative and round down to $50M to account for incremental royalties and taxes. So instead of generating roughly $80M of operating cash flow ($29M plus $50M), MMC generated $60M before debt refinancing costs.
Why is the difference such a big deal? Because MMC still has significant cash commitments. It spent $34M in cap ex (IR told us it was primarily pre-stripping activity) in 1H 2017. And by the end of next year, MMC will have to start paying down its debt and accumulated interest.
Again...you can not show how good it is(going to be..et al) when you are in bankruptcy. You can not go full tilt....even if it is available.
This is an interesting and provocative statement. MMC officially came out of bankruptcy in May, although they had the votes in hand by the end of 2016. Why exactly could they not go full tilt in the first half of 2017? Please do tell -- was it operational incompetence or incredible gamesmanship to fail to take into account the lunar holidays and to miss both production and operating cost guidance?
