nickel: resolving supply chain constraints
DESCRIPTION
Jim Lennon, Chairman, Macquaries Capital Securities about changes in the Nickel industry. Jim will be speaking at New Caledonia Nickel, held on the 1- 5 July 2013. For more information on the conference, please visit www.newcaledonianickel.comTRANSCRIPT
Resolving supply constraints – changes in the industry and what this
means for producers and prices
April 2013
Jim Lennon
Macquarie Capital Securities (Europe) Ltd
+44 203 037 4271
In preparing this research, we did not take into account the investment objectives, financial situation and particular needs of the reader. Before making an investment decision on the basis of this research, the reader needs to consider, with or without the assistance of an adviser, whether the advice is appropriate in light of their particular investment needs, objectives and financial circumstances. Please see disclaimer.
Page 1
The changing face of the nickel market – meeting Chinese demand Huge requirements for new capacity driven by explosion in Chinese demand since 2000 Nickel shortage in 2006/07 led to price explosion and three “solutions”:
Massive growth in use of 200-series stainless steel (1-2% Ni) as a substitute for 300-series stainless steel (8-9% Ni)
Processing of low-grade laterite nickel ores into nickel pig iron in China as a substitute for conventional nickel units
Allocation of over $30bn by non-Chinese industry to expand production
Historically (the 1990s and to mid-2000s), the solution to the challenge of meeting nickel demand growth was thought to be mainly through increased processing of low-grade laterites (limonites) by pressure acid leach processes (PAL) or by processing higher-grade laterites (saprolites) by conventional ferronickel smelting
Soaring capex and major technical challenges have made this “solution” mostly a disaster for most of the nickel producers involved
Main questions for the market: Economics of Chinese NPI now and into the future – when does this end?
What are the economics of the alternatives? Will we revert back to PAL/FeNi “solution” or there alternatives?
Page 2
Take-off of Chinese demand stretched the nickel supply chain to breaking point in 2006/07
China's nickel demand
0
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
'000
t p
rim
ary
Ni
Stainless steel Non stainless applications
LME nickel stocks and price
0
20000
40000
60000
80000
100000
120000
140000
160000
180000
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
LM
E s
toc
ks
: to
nn
es
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
55000
Pri
ce:
$/to
nn
e
LME stocks LME price
Page 3
Source: LME, Antaike, Macquarie Research, April 2013
Nickel demand growth is all about China
Changes in stainless steel output by region, 2000-12
-681
-530
-382
-255
1
665
1632
11257
-5000 0 5000 10000 15000
Japan
Europe
N.America
Taiwan
S. America
Korea
India
China
'000t SS
Changes in global nickel use by region, 2000-2012
-65
-50
-42
-19
1
9
20
676
-200 0 200 400 600 800
Europe
Japan
Taiwan
N.America
Korea
S.America
India
China
'000t Ni
Source: INSG, ISSF, Macquarie Research, April 2013
Page 4
Need for new nickel capacity – subdued in 2000-10 mainly by use of 200 series stainless, but lots of supply growth now needed
• Major surge in nickel use from 2000-2006 driven mainly by china
• Shortage of nickel prompted switch to 200-series stainless in China
•Collapse in global demand in 2009, combined with substitution led to major deceleration in demand growth
•Past three years has seen surging demand (and supply) once again
Source: INSG, CSSC, Macquarie Research, April 2013
Nickel consumption growth
120270
93238 215
369 310
59
294
900370
80
290
105
125
-100
100
300
500
700
900
1100
1950-60
1960-70
1970-80
1980-90
1990-00
2000-10
2000-06
2006-10
2010-13F
2010-20F
'00
0t
Primary use Demand "lost" by substitution
Page 5
Chinese found two ways of avoiding an absolute shortage of nickel after 2007
Source: ISSF, CSSC, Macquarie Research, April 2013
Nickel "shortage" from 2005 led to Chinese "solutions"
0 0 0 1868
13780
274 297 300368 393 431
0 0 0 1868
139100
345399 410
525
686
776
0
100
200
300
400
500
600
700
800
900
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
'00
0t
ni
0
100
200
300
400
500
600
700
800
900
Ni use displaced by Chinese 200 SS Chinese nickel pig iron production
Page 6
Global ratio of 300-series stainless in total
55%
57%
59%
61%
63%
65%
67%
69%
71%
73%
75%
1990
1993
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
% o
f to
tal
2003
The changing face of nickel – stagnation in sulphide production as laterites take off – mine production basis
Page 7
Source: INSG, Macquarie Research, April 2013
Laterite nickel mine production takes off
-100
100
300
500
700
900
1100
1300
1500
2007 2008 2009 2010 2011 2012
'000
t co
nta
ined
ni
Indonesia
Philippines
Turkey
Ukraine
Albania
Papua New Guinea
Madagascar
Venezuela
Serbia
Dominican Rep.
FYROM
Aust Laterite
Cuba
Colombia
Brazil
New Cal. (France)
Sulphide ore production stops growing
0
100
200
300
400
500
600
700
800
900
2007 2008 2009 2010 2011 2012
'000
t co
nta
ined
ni
Norway
Kazakhstan
United States
Zambia
Zimbabwe
Botswana
South Africa
China, P.R.
Aust Sulph
Canada
Russian Fed.
The massive role of Indonesia and the Philippines
Indonesia and Philippines share in global mine production
5%
10%
15%
20%
25%
30%
2007 2008 2009 2010 2011 2012
% o
f w
orl
d m
ine
pro
du
ctio
n
Nickel ore production in Indonesia and the Philippines
0
100
200
300
400
500
600
700
800
900
1000
2007 2008 2009 2010 2011 2012'0
00t
con
tain
ed n
icke
l
Indonesia Philippines
Source: Philippines Mines and Geosciences Bureau, INSG, GTIS, Macquarie Research, April 2013
Mine production overstates the actual impact due to massive ore stocking in China and also >50% of ore from Philippines not being used as nickel, but iron ore
Page 8
The picture on type of ores used in finished nickel production shows a major shift up in laterites
Finished nickel production by ore type - % share of total
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
75%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
F
2014
F
2015
F
2016
F
2017
F
% o
f to
tal
Sulphide Laterite
Page 9
Source: Company data, INSG, Macquarie Research, April 2013
Current main production processes for nickel
Note: excludes leaching processes for sulphides (Talvivaara bioleach in Finland) and limonites (in
Guangxi and Jiangshi in China) Page 10
ORE TYPE
UPGRADING
PROCESSING
INTERMEDIATE
PROCESSING
PRODUCT
SULPHIDEOXIDE
(LATERITE) LIMONITE SAPROLITE
CONC.
PYRO HYDROPYRO
HYDRO
PYRO
MATTE NiS NiCO3 MATTE
HYDRO HYDRO HYDRO
CLASS 1 FeNiCLASS 1 CLASS 1 Ni-OXIDE CLASS 1/2
SMELT
PAL PROCESS
CARON PROCESS
NPI
Source: INSG, Macquarie Research, April 2013
Our estimates and forecasts of nickel production by process route
Finished nickel production by main process
0
500
1000
1500
2000
2500
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
F
2014
F
2015
F
2016
F
2017
F
'000
t N
i
Sulphide - conventional Sulphide bioheapleach Laterite - ferronickel Laterite - Caron
Laterite - PAL Other laterite Laterite - nickel pig iron
Page 11
Source: Company data, INSG, Macquarie Research, April 2013
Laterite growth dominated by FeNi, PAL and NPI
Much of major sulphide mine investment over past 20 years (Voisey’s Bay, Raglan, Nickel Rim, Mount Keith, Cosmos, Santa Rita, Flying Fox, Nkomati, Lanfranci, FNX, Kevista, etc) was essentially defensive, to offset falling reserves elsewhere.
Growth in laterites has come mainly from conventional ferronickel, high-pressure acid leach and Chinese nickel pig iron
Finished nickel production from sulphide ores
0
100
200
300
400
500
600
700
800
900
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
F
2016
F
'000
t N
i
Conventional sulphide smelting/refining Bioleach
Finished nickel production from laterite ores
0
200
400
600
800
1000
1200
1400
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
F
2016
F
'000
t N
i
Laterite - ferronickel Laterite - Caron Laterite - PALOther laterite Laterite - nickel pig iron
Page 12
Source: Company data, INSG, Macquarie Research, April 2013
Where the finished nickel supply growth has come from and could come from
Page 13
Source: Company data, INSG, Macquarie Research, April 2013
'000t Ni Level Level Level Level1990 2000 2012 2017F*
Sulphide - conventional 658 692 760 823Sulphide bioheapleach 0 0 13 25Laterite - ferronickel 178 209 334 516Laterite - nickel pig iron 0 0 346 370Laterite - Caron 48 83 82 81Laterite - PAL 20 53 142 319Other laterite (leach&smelt/refine) 40 70 82 104Total 944 1108 1758 2238
% share % share % share % share % share1990 2000 2012 2017F
Sulphide - conventional 70% 62% 43% 37%Sulphide bioheapleach 0% 0% 1% 1%Laterite - ferronickel 19% 19% 19% 23%Laterite - nickel pig iron 0% 0% 20% 17%Laterite - Caron 5% 8% 5% 4%Laterite - PAL 2% 5% 8% 14%Other laterite (leach&smelt/refine) 4% 6% 5% 5%Total 100% 100% 100% 100%
* 2017f forecast is before disruption allowance
Share of nickel production by process
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1990
2000
2012
2017
F
Other laterite(leach&smelt/refine)
Laterite - PAL
Laterite - Caron
Laterite - nickel pigiron
Laterite -ferronickel
Sulphidebioheapleach
Sulphide -conventional
Strong growth ahead for FeNi and PAL…but that has been the case for some time now!
Ferronickel production by producer
-50
50
150
250
350
450
550
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
F
2014
F
2015
F
2016
F
2017
F
'000
t N
i
0%
5%
10%
15%
20%
25%
Onca Puma
Barro Alto
Koniambo
Kwangyang
Pristina
Kavadarci
Laryma
Pobugskoye
Lomo do Niquel
Pratopolis
Niqualandia
Pomalaa
Oheyama
Hachinohe
Hyuga
Cerro Matoso
Doniambo
Falcondo
% of world total
PAL production by producer
0
50
100
150
200
250
300
350
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
F
2014
F
2015
F
2016
F
2017
F
'000
t N
i
0%
2%
4%
6%
8%
10%
12%
14%
16%
% s
har
e o
f w
orl
d p
rod
uct
ion
Moa Bay*
Ambatovy
Ramu River*
Taganito*
Coral Bay*
Ravensthorpe*
Cawse*
Bulong
Murrin Murrin
VNC
% of world supply
* intermediate product only
Page 14
Source: Company data, INSG, Macquarie Research, April 2013
Stainless industry getting lots more nickel and (mainly free) iron units now
Source: Company data, INSG, Macquarie Research, April 2013
Page 15
Nickel-iron units for the stainless steel industry
0
200
400
600
800
1000
1200
1400
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
F
20
14
F
20
15
F
20
16
F
20
17
F
'000
t N
i
30%
35%
40%
45%
50%
55%
60%
65%
% o
f al
l n
i u
sed
by
stai
nle
ss s
teel
FeNi NPI Purchased SS scrap FeNi/NPI/SSS ni as % all of all ni in SS
Main recent PAL and FeNi projects – late and expensive
PAL '000tpa $m Ferronickel '000tpa $mStart-up Capacity Capex $/t cap Acid plant Refinery Start-up Capacity Capex $/t cap
Murrin Murrin 1999 40 1700 42500 x x Gwangywang 2008 30 720 24000Coral Bay Stage 1 2005 12 220 18333 Onca Puma 2011 52 3200 61538Ravensthorpe original 2007 40 3000 75000 x x Barro Alto 2011 40 1900 47500VNC (Goro) 2010 60 6000 100000 x x Koniambo 2013 60 5500 91667Ramu 2012 32 1800 56250 x Taguang Taung Nickel 2012 22 850 38636Ambatovy 2012 60 5500 91667 x xTaganito 2013 30 1600 53333
Total above 274 19820 72336 Total above 204 12170 59657
Ravensthorpe reopening 2011 40 740 18500
•Projects running many years late, capex mostly rose 2-4 times above original estimates and commissioning problems have been major
•Too early to be precise on operating costs but we think the PAL projects will range from $8,000-15,000/t with an average of $12-13,000/t while the ferronickel projects range from $8,500-13,000/t with an average of $10,000/t. Opex estimates much higher than in feasibility.
Page 16
Source: Company data, INSG, Macquarie Research, April 2013
Nickel pig iron progress by contrast has been miraculous!
The "economics" of new capacity - based on today's parameters
80000
60000
5000
150001300010000
1700013500
29000
2200018000 16500
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
PAL (recent) FeNi (recent) Old NPI New NPI (RKEF)
$/t
on
ne
Capex Opex Incentive price
This is a very rough guide to the economics of new capacity
Page 17
Source: Company data, Wood Mackenzie, Macquarie Research, April 2013
Long run prices need to be higher…depending on NPI!
Page 18
Source: Wood Mackenzie, Macquarie Research, May 2012
How industry costs and incentive prices have evolvedExcluding NPI
0
5000
10000
15000
20000
25000
30000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
$/lb
pri
ces
and
co
sts
0
10000
20000
30000
40000
50000
60000
70000
$/lb
cap
ital
inte
nsi
ty
Average cash costs Incentive price (with 20% capital charge)
90th percentile cash costs Capital intensity new projects ($/lb capacity) RHS
Nickel pig iron – the big unknown Estimates for 2012 output (still!) vary by more than 50kt – very little reporting,
lots of guessing.
Cash costs range from $12-20,000/tonne ($5.45-9/lb). Costs vary widely.
Costs do vary with nickel price so there is no single price below which supply shuts – indeed costs have fallen sharply (-10 to -20%) since March 2012 (lower carbon and ore prices).
Capacity potential is massive – OVER 400,000 tpa NEW capacity due, mostly Greenfield rotary/kiln/electric arc furnace and integrated with stainless mills. Costs will rise as energy prices rise and RMB appreciates but new plants have 30-50% less energy consumption and stainless mills get significant energy and iron credit benefits.
Ore supplies from Philippines and Indonesia are critical in determining the future output limits. Many Chinese producers trying to backwardly integrate into ore.
If new supply outside China comes on successfully, capping prices, NPI production will be limited – if new supply fails, there will be more NPI.
Page 19
Key factors in NPI
Indonesian ore ban/quotas and taxes? 20% export tax (adds 35-40c/lb to costs if passed on…but it was not!)
Longer term cost pressures – breakeven for NPI could rise from $6.50-8.50/lb currently to $9-12/lb over next 4-5 years.
Replacement of current capacity by lower costs RK-EF capacity will offset cost pressures partly
Competition for higher-grade ore (1.8%+Ni) will intensify as more RKEF comes on and high grade reserves deplete – price of these ores could rise sharply
Still unclear how long the resources can last at current rates
We don’t think ore supply from Indonesia to China will stop in 2014 – it will become (a lot) more expensive and there will probably be some NPI capacity built in Indonesia from 2015 onwards
Page 20
Not all nickel pig iron is the same – cost falls in 2012/13 as ore and carbon prices decline
Page 21
Source: SMM, Macquarie Research, April 2013
14000
16000
18000
20000
22000
Jan
-10
Mar
-10
May
-10
Jul-
10
Sep
-10
No
v-10
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-11
Jan
-12
Mar
-12
May
-12
Jul-
12
Sep
-12
No
v-12
Jan
-13
Mar
-13
$/lb
ex-
VA
T
Price: 4-6% NPI Costs: 6% Ni in blast furnace
20000
22000
24000
26000
28000
30000
32000
Jan
-10
Mar
-10
May
-10
Jul-
10
Sep
-10
No
v-10
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-11
Jan
-12
Mar
-12
May
-12
Jul-
12
Sep
-12
No
v-12
Jan
-13
Mar
-13
$/lb
ex-
VA
T
Price: 1.5-2% NPI Costs: 1.7% Ni in blast furnace
13000
15000
17000
19000
21000
23000
25000
Jan
-10
Mar
-10
May
-10
Jul-
10
Sep
-10
No
v-10
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-11
Jan
-12
Mar
-12
May
-12
Jul-
12
Sep
-12
No
v-12
Jan
-13
Mar
-13
$/lb
ex-
VA
t
Price: 8-13% NPI Costs: 10% Ni - Coastal
Costs: 10% Ni - Inner Mongolia
12000
14000
16000
18000
20000
22000
24000
Jan
-10
Mar
-10
May
-10
Jul-
10
Sep
-10
No
v-10
Jan
-11
Mar
-11
May
-11
Jul-
11
Sep
-11
No
v-11
Jan
-12
Mar
-12
May
-12
Jul-
12
Sep
-12
No
v-12
Jan
-13
Mar
-13
$/lb
ex-
VA
T
Price: 8-13% NPI Costs: 12% Ni - Conventional
Costs: 12% Ni - RKEF
Importance of ore cost is large – 95 tonnes of ore needed for one tonne of ni in NPI (10% grade)
Breakdown of costs of producing NPI from RKEF (2012 average)
Ore cost fob29%
Ore logistics24%
Power24%
Carbon12%
Other11%
Impact of ore cost changes on NPI costs for RKEF
6.0
6.5
7.0
7.5
8.0
8.5
9.0
35 45 55 65 75 85 95
1.8% Ni ore: $/wmt fob
Co
st/l
b N
i: c
ents
/lb
Source: Macquarie Research, April 2013
Page 22
Lots of new rotary kiln electric furnace (RKEF) capacity coming on stream in 2013!
Source: Industry estimates, Macquarie Research, April 2013
Page 23
Chinese RKEF Capacity by month
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
2010 2011 2012 2013
Cap
acit
y: t
on
nes
NI a
yea
r
Liande (LISCO)
Beihai Chengde
Ningbo Wangxiang
Shangdong Xinhai
Tenlong Hejin
Hongda Nieye
Changjiang Nieye
Suqian Xiangxiang
Jinguang (SW)
Baogang Desheng
Fufeng Shiye
Delong Nieye
Shangdong Jinaihui
Shangdong Xinhai
Yichuan Nieye
Haigan Keji
Tsingshan Siji
Shangai Haihe
Tsingshan Changqing
Beihai Chengde
Ningbo Wanxiang
Delong Nieye
Shangdong Jinaihui
Shangdong Xinhai
Tsingshan Dingxin
Chinese nickel pig iron production
120
71102 110
156
293
345385
0
50
100
150
200
250
300
350
400
450
2005 2006 2007 2008 2009 2010 2011 2012 2013f
'000
t N
i
0
50
100
150
200
250
300
350
400
450
0.5-2% Ni blast furnace 4-8% Ni blast furnace
9-15% Ni electric arc furnace 9-15% Ni RKEF
In conclusionThe laterite “revolution” has arrived – it is built on the shaky ground of
low-cost Indonesian ore/Chinese NPI and VERY high-cost non-Chinese PAL/FeNi capacity
Failure of major Greenfield projects outside China and massive rises in construction costs of non-Chinese Greenfield projects likely to deter future investment
Next two years will be challenging for the nickel industry – unless the Indonesians ban ore exports in 2014
Growing deficits by mid-decade will lead to need for new capacity…new capacity needs prices significantly above $22,000/t ($10/lb)
Huge reliance on Indonesian ore to feed RFEF plants in China – unlikely to stay as “cheap” as it is today?
Page 24
Page 25
Nickel supply/demand summary – surplus in 2012-14
Source: INSG, Macquarie Research, April 2013
`000t 2011 2012 2013f 2014f 2015f 2016f 2017f 2018f
Total SS production 33648 35125 38013 40760 43360 45563 47432 48963% Change 5.6% 4.4% 8.2% 7.2% 6.4% 5.1% 4.1% 3.2%Ni-containing SS prod. 25067 26556 28654 30739 32725 34473 35719 36947% Change 9.2% 5.9% 7.9% 7.3% 6.5% 5.3% 3.6% 3.4%Nickel Consumption 1597 1667 1781 1891 1990 2069 2125 2181% Change 7.4% 4.4% 6.9% 6.1% 5.2% 4.0% 2.7% 2.7%
Nickel Supply 1630 1758 1833 1922 1995 2057 2090 2176% Change 12.3% 7.8% 4.3% 4.9% 3.8% 3.1% 1.6% 4.1%(of which NPI) (282) (346) (387) (375) (360) (360) (370) (390)
World Market Balance 33 91 52 31 6 -12 -35 -5
LME/Producer stocks 186 227 279 310 316 304 269 264Weeks' world demand 5.9 6.9 8.0 8.4 8.1 7.5 6.5 6.2LME Cash Price (cents/lb) 1036 795 746 817 953 1134 1300 1300LME Cash Price ($/tonne) 22831 17527 16455 18001 21001 25000 28660 28660
Important disclosures:
Recommendation definitions
Macquarie - Australia/New Zealand
Outperform – return > 3% in excess of benchmark return Neutral – return within 3% of benchmark return Underperform – return > 3% below benchmark return
Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield
Macquarie – Asia/Europe
Outperform – expected return >+10%Neutral – expected return from -10% to +10%Underperform – expected <-10%
Macquarie First South - South Africa
Outperform – return > 10% in excess of benchmark returnNeutral – return within 10% of benchmark returnUnderperform – return > 10% below benchmark return
Macquarie - Canada
Outperform – return > 5% in excess of benchmark returnNeutral – return within 5% of benchmark returnUnderperform – return > 5% below benchmark return
Macquarie - USA
Outperform – return > 5% in excess of benchmark returnNeutral – return within 5% of benchmark returnUnderperform – return > 5% below benchmark return
Volatility index definition*This is calculated from the volatility of historic price movements.
Very high–highest risk – Stock should be expected to move up or down 60-100% in a year – investors should be aware this stock is highly speculative.
High – stock should be expected to move up or down at least 40-60% in a year – investors should be aware this stock could be speculative.
Medium – stock should be expected to move up or down at least 30-40% in a year.
Low–medium – stock should be expected to move up or down at least 25-30% in a year.
Low – stock should be expected to move up or down at least 15-25% in a year.
* Applicable to Australian/NZ stocks only
Recommendation – 12 months
Note: Quant recommendations may differ from Fundamental Analyst recommendations
Financial definitions
All "Adjusted" data items have had the following adjustments made:
Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expenseExcluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests
EPS = adjusted net profit /efpowa*ROA = adjusted ebit / average total assetsROA Banks/Insurance = adjusted net profit /average total assetsROE = adjusted net profit / average shareholders fundsGross cashflow = adjusted net profit + depreciation*equivalent fully paid ordinary weighted average number of shares
All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards).
Recommendation proportions – For quarter ending 31 March 2013
AU/NZ Asia RSA USA CA EUR
Outperform 45.12% 53.24% 50.00% 40.70% 62.98% 43.30% (for US coverage by MCUSA, 10.55% of stocks covered are investment banking clients)
Neutral 41.52% 28.01% 41.43% 55.01% 32.60% 34.10% (for US coverage by MCUSA, 9.05% of stocks covered are investment banking clients)Underperform 13.36% 18.74% 8.57% 4.29% 4.42% 22.60% (for US coverage by MCUSA, 0.00% of stocks covered are investment banking clients)
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