Quarterly Reports: Who’s In, Who’s Out?

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It’s that time of the year again for publicly-listed firms to submit their reports that show how well (or how bad) they performed. This time, it’s the second quarter finish.

Talvivaara Mining

At first glance, one can safely assume that Talvivaara (LSE:TALV) did not come out a winner six months since January of this year. Net sales reduced by nearly two-thirds during the April – June period compared to the same last year, the company blames “depressed nickel price, low production volumes” and higher costs contributed to an almost doubled operating loss during the first six months of 2013 at €43.8 million, compared to €22.3 million for the same period in 2012.

But the CEO of the Finland-based nickel and zinc miner said the year to date performance is not all bad but a “mixture of good progress… and continued challenges”. How CEO Pekka Perä derived at good progress is something I would like to leave to the analysts, as good progress may not be good enough. Though some didn’t really mind that net loss actually increased from €32 million to €51.5 million because as of 8:45 AM London time, shares of this AIM-listed firm were up 7.5% to 10.75 pence.

We’ll have to wait what the management has to say later during their conference call.

Eastern Platinum

From Helsinki, we fly to the Bushveld Complex in South Africa and check on Eastplats (LSE:ELR), which in plain and truthful presentation stated its Consolidated Statements of Loss rather than putting Profit then followed by a Loss in enclosed parenthesis that we normally see when looking at financial statements.

The Canadian platinum miner, without any introductory statement (mostly a carefully crafted press release to ease the impact of the financial result), posted a loss of US$ 158 million for the January – June 2013 period, but that in fact is an improvement over last year’s US$171 million.

The firm does not expect recovery in platinum prices in the short term, basing their outlook in the continued “stagnation in the European car market” that consumes about half of South Africa’s platinum produce – the metal being used to reduce carbon emission. The labour unrest in the country is still ongoing, cost inflation, including wage increases in the PGM industry, and concerns on power security will all weigh down on the firms free cash flow, it said.

Eastplats shares were down a bit by 2.6% to 4.625 shares at 9:00 GMT. But it’s early to tell where the price will be by the end of the trading day.

Uncertainty

“These are troubled times” so the Professor at Hogwarts said and I don’t mean to be mean as the task of doing business for a profit is one that needs a huge amount of ingenuity and wit and all things in between. Yet I don’t lose sight in the fact either that businesses would not hesitate to take away jobs – sometimes thousands of them in one stroke of a pen – in order to survive. Hence, pardon me if I sounded a little nasty.

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