Wednesday 07 November 2018 by FIIG Securities FIIG Securities General

Company Updates

Ausdrill and Barminco

Ausdrill completed the acquisition of Barminco as anticipated. The new, enlarged group is now the 2nd largest contract mining company in Australia.

While Ausdrill’s wholly owned subsidiary AUMS (which used to be a joint venture between Ausdrill and Barminco) announced that its contract with Perseus Mining at the Edikan mine in Ghana wouldn’t be renewed, the now expanded group benefits from a recent string of positive contract announcements for AngloGold Ashanti, Gold Fields and Independence Group.

As expected, S&P and Moody’s have upgraded Ausdrill’s ratings on the back of the acquisition completion, and S&P also upgraded the rating on Barminco’s notes.


Frontier Communications 3Q18 results

·         Frontier reported relatively stable results however did revise down its full year guidance slightly

·         Revenue for 3Q18 was USD2.13bn (2Q18: USD2.16m) with the decline driven by voice and video. Adjusted EBITDA was USD878m (2Q18: USD884mm)

·        Management stated it remains committed to reducing debt over time and improving its leverage profile. During the quarter Frontier repaid USD443m of outstanding notes. It also converted its 11.125% Mandatory Convertible Preferred Stock into shares which will save  ~USD50m per quarter

·         As of 30 September 2018, Frontier’s leverage ratio was 4.78:1 (2Q18: 4.70:1)

·         The company revised down its 2018 guidance slightly to adjusted EBITDA of USD3.55bn (Previously: USD3.6bn)

Full details are available on Frontier’s website.



IAMGOLD reported its 3Q18 with revenue of USD245m and EBITDA of USD54m. Both were down compared to the corresponding prior period in 2017. The decline was primarily due to lower production at its mine in Suriname which affected unit cash costs. Saying that, gold margins remained healthy at USD377 per oz. The balance sheet remains strong, with USD715m of cash and short term investments as at 30 September 2018, comparing favourably to the company’s USD396m of debt.

IAMGOLD reaffirmed its guidance for 2018, with no changes other than reallocation of expected volumes across all of the company’s mines (but no change to the aggregate). IAMGOLD is expected to finish 2018 with a strong cash position, supported by the expected payment of USD95m related to the sale of a 30% in one of the company’s mines in 2017. During the quarter, IAMGOLD reported strong increases in its gold reserves and resources and is currently working on a capital investment plan for 2019 that will look to increase its overall gold production through greenfield and brownfield developments.

Mallinckrodt 3Q18 results

·         Mallinckrodt reported solid 3Q18 results and has again upgraded it full year guidance

·         Net sales were USD640m compared to USD601m in the prior period

·         H.P. Acthar Gel sales of USD290m decreased 6% on the prior period. However management reiterated its expectation net Acthar sales for 2018 will be above USD1bn and expect 2019 net sales will also exceed USD1bn.

·         During the quarter the company reduced total debt by USD171m and ended the quarter with net debt of USD5.9bn. Subsequent to quarter end the company reduced debt by a further USD220m.

·         Management has again increased its full year 2018 guidance of adjusted diluted earnings per share of USD7.00 to USD7.20 (previously USD6.50 to USD6.90).

 Full details are available on Mallinckrodt’s website.