$SHVA.TA Problems in Paradise - Part II. Q1 Report quietly slipped to the market after the weekend market close - a never promising sign. As said earlier, this very special business is facing some significant issues for investors.
The 18.7% growth in Card transactions and 6% in ATM were strong as Israel shakes off the Covid related restrictions but only resulted in 5.5% Revenue growth as the big contribution of terminals Revenues is now past us.
The main difficulty ahead for the new management team is finding where growth should come from. Investors misjudged management's reluctance to adjust rates even to inflation or the time and cost it would take them. They will eventually get there. who knows when.
As $SHVA.TA is gearing to separate from #MASAB, the company needs to increase its expense, and no doubt will seek to rationalize costs. Expenses are introduced in a staggered manner, but still outgrew the Revenue growth (6.4% vs 5.5%), resulting in a 1.6% operating profit growth
The Cash pile is slowly growing but to my taste should not be considered as a catalyst, because management does not even think about any special div beyond the Div policy. Investors might as well consider it PP&E for valuation/capital allocation skills purposes (M&A coming?).
What we end with (even post 30% drop from April) is a MC of ~720 m NIS, delivering about 50 Pretax Op profit, ~15X for a slow - v slow grower in transition, Qs about the full Separation Costs, capital allocation skill/interest/desire and regrettable lack of an Owner operator.
I think investors would either need a (much) better valuation or signs management found a way to spur generate shareholders' value.
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Verde is seeing demand from Asia and is excited by the possibility to sell K Forte to Asia as well as Brazil. This would fill up demand to 13, 25 tones and higher.
It seems the Price/demand is not coming off Russia sanctions. There is no sanction on Potash. It seems its coming from Food prices (producers price potash back from food prices). This is significant, and would mean there is no risk for price on Russia resolution -
Verde Agritech's Q1 results signaled how the thesis progresses well. However, one blemish was what looked like a tad low KCL USD equivalent price compared to market terms. Here is why I think it is not an issue:
$NPK.TO was unleashing a massive (willing) market penetration push even before the Ukraine crisis. During the whole of 2021, with a much softer price environment, Team Vered was selling K forte for Q1 2022, offering discounts for farmers willing to commit for the future.
As a rule of thumb, Brazilian farmers prefer to buy just on time. Having been able to change the habits of said farmers is a great indication of the product and its acceptance. The unintended consequence is prices which seem too low compared to today's environment 1400$ KCL Eqiv
$MELI's 1Q 2022 video presentation, esp starting at 4:47 spot, is a nice touch. The whole first segment is a welcome change from a boring press release read by management. edge.media-server.com/mmc/p/4wnopf67
While other marketplaces suffered as the world opens, $MELI managed to prove it is far more than merely a "shop" but more of a social utility - touching the lives of its users daily and deeply - every day, online and offline. This is a rare quality few companies possess.
Arguably, $MELI's Flywheel components are far better than any other marketplace when it comes to providing a comprehensive, perfect customer/merchant solution. No fadish gaming, b2b cloud, or TV shows with weird ROI here, just humble, laser focus attention on what users need...
This Famer Testimonial about using $NPK.TO KForte (KCO) connects the dots between Chloride free potash & application of microorganisms (Bio Revolution product line).
Conf: Demand remains very strong. Awareness, Adoption of PPF, and strength of the XPEL brand are intact. 21 performance comes over challenging Inventory situation, however, there are positive signs: