Conduril reported their results for 2013 last week, and while the investment thesis doesn’t hinge on exceptional operational results it’s good to see that the business is doing well. Earnings per share are up 56% and the dividend has been increased to €3/share giving the company a 4.8% yield. The only slightly negative news is that revenues are down 9.5%, but I don’t think that signals a trend because the backlog has increased 23% from €610 million at the end of 2012 to €750 million at the end of 2013. The fact that the company invested a significant amount of money in fixed assets last year also hints at (a) sunny year(s) ahead. In 2013 Conduril spent €22 million on capex while it spent just €4 million in 2012. I’m not exactly sure how they arrive at these numbers since they doesn’t show up in the financials:
Despite the run-up in share price Conduril remains very cheap. It’s still trading at a PE ratio of just 3.1x, a 0.6x PB ratio and an EV/EBITDA ratio of just 1.5x. Pretty remarkable for a company that has almost tripled in value since I first bought it.
Disclosure
Author is long Conduril
Hi, just a quick question regarding the stock. In OTC you can find with ticker CNDUF, but I was wondering whether it makes sense to buy from the grey market? Do you know if there is any difference in terms of getting the dividend etc. when owning the one listed in the U.S.? Obviously the liquidity with that one is bad as well but I guess you could get filled some price/time? Thanks!
I don’t think there is a meaningful difference; you probably get the dividend a few days later. But I don’t think it is smart to buy this OTC since it’s illiquid enough already in Portugal.
I went to their web site and I just see the AR in Portuguese. Did you get an English version somehow?
Using my google translator I see that their profit for the year includes a E18.5mm FX gain. After taxes that’s about a third of their EPS profits.
Business is still good. Only 7% of their revenue comes from Portugal vs 33% a couple of years ago. If infrastructure expenditures ever pick up in their home market they should get an enormous boost. The government can’t do the austerity thing forever.
Africa is gaining some respect as a growth market also.
English version isn’t online yet, used the Portuguese AR as well.
Not sure where you got the E18.5 FX gain from though. Note 14.1 details the FX gains/loses recognized in income, and they recognized a 20.5M FX loss and a 19.5M FX gain for a small net loss.
They did however have some losses this year that were not reported on the income statement but directly to the equity statement, and those are mostly related to FX losses in Angola. Comprehensive income/share was approx. E15 versus the reported E20/share.
I’m sure you looked at this closer than me. I did a little piecemeal translating so didn’t get the whole picture. I’ll be waiting on the English version.
Conduril is now my largest position and I feel like I should still be adding some shares. Thanks for reporting on this one.