Molycorp Inc (NYSE:MCP)’s Q2 crop does not impress
Molycorp Inc (NYSE:MCP) announced its Q2 earnings last week. The results turned-out to be like a bag of assorted jelly beans packed with every flavor. Some segments of the reports had very positive connotations while others were just plain black.
The company’s net revenues touched $136.9M in comparison with the 2013 Q1 net revenues of $146.4M. This indicates there has been weakening the demand for rare-earth prices as well as in its prices. It is just too soon to comment on a price-rebound at the moment. To look the top-line results in the right perspective, this quarter’s revenue was only 1.9% more than the 2012 Q4 revenue of $134.3M.
The latter had come as a definite shock to MCP investors and had led to a capital raise in 2013 January. The company also incurred a net loss of $74.0M in comparison to the net loss of $38.2M that the company incurred in the earlier quarter.
The cash stash
As of 15 July, MCP’s short-interest was 48.8M shares. Based on Molycorp’s recent cash-flows, the shorts may not materialize for at least a few quarters. At the moment, the company’s run rate cash-flows from its operations stand at $37M. In the pipeline are planned capital-expenditures of around $69M. It will be using this amount for the completion of its Chlor-Alkali plant and Mountain Pass expansion. It is definite that MCP will not run-out of its cash kitty anytime before 2014 Q1.
Molycorp Inc (NYSE:MCP) is a producer of rare-earth oxide. Its largely operates in the Western Hemisphere. The company owns several developed rare-earth projects outside China and produces rare-earth alloys in the U.S. Molycorp has three different operating segments. Molycorp Tolleson, Molycorp Mountain Pass and Molycorp Sillamae. MCP Sillamae sells various products to customers across North and South America, Europe, Russia, Asia and some former Soviet Union nations. The company also owns an open-pit mine at its Mountain Pass facility.