Thursday, August 11, 2011

Molycorp Beats; Raises; Decries Shortsellers as Spawn of Satan (MCP)

[a close reading of the press release reveals there is no use of the term 'Spawn of Satan' -ed]

Our earlier post had consensus at $0.40 a share on revenue of $98.59 million. I've also seen 42 cents as the average but who the heck cares? That's why we titled that post "Molycorp: Today's Earnings Don't Really Matter (MCP)". We'll have more in a bit.

After closing up $2.59 at $54.14 the stock is up another $3.79 (7.00%) after-hours. That seems a bit exuberant.
From the company:
Molycorp Reports Second Quarter 2011 Results

  • "Project Phoenix" modernization and expansion project remains on time and on budget at Company's flagship rare earth production facility in Mountain Pass, Calif.
  • Company reaches profitability with record net sales of $99.6 million in Q2 2011
  • Q2 2011 sales volume of rare earth oxide (REO) equivalent rose 58% over Q1 2011 and 314% year-over-year, including rare earth alloy sales.
  • The Company's average realized sales price in Q2 2011 rose 91% to $72.10 per kilogram of REO equivalent from $37.73 per kilogram in Q1 2011.
  • The Company's average realized sales price in Q2 for rare metals (niobium and tantalum) was $167.50 per kilogram.
  • Q2 Gross Margin of approximately 57%
  • EPS of $0.52 per fully diluted share
  • Successfully renegotiated its current major lanthanum supply contract to allow for higher realized sales prices.
  • Awarded an EPC contract for construction of a chlor-alkali plant, a major component of the Company's $781 million Project Phoenix expansion and modernization project
GREENWOOD VILLAGE, Colo., Aug 11, 2011 (BUSINESS WIRE) -- Molycorp, Inc. (NYSE: MCP) (Molycorp or the Company) today announced financial and operating performance for the second quarter of 2011.
Molycorp's $781 million modernization and expansion project at its flagship Mountain Pass, Calif., Rare Earth facility continues on time and on budget, with an annual Phase 1 production rate of 19,050 metric tons of rare earth oxide (REO) equivalent to be achieved by the end of 2012.

The Company generated revenue of $99.6 million in Q2 2011, which compares to revenue of $26.3 million in Q1 2011 and $1.9 million in Q2 2010. Sequential growth resulted from a combination of robust results from its Mountain Pass facility, and the inclusion of revenue from the Company's recently acquired subsidiaries, Molycorp Metals and Alloys (MMA) of Tolleson, Ariz., and Molycorp Silmet AS (Silmet), located in Sillamae, Estonia.

Mountain Pass revenue grew 130% sequentially to $60.3 million, net of intercompany sales. The growth in Mountain Pass revenue was driven both by higher realized prices and by higher volumes. Market prices for rare earth elements continued to climb during the quarter, as global supplies remain extremely tight. Silmet contributed $29.0 million to revenue net of intercompany sales, while MMA recognized $10.3 million of sales in the period subsequent to the acquisition.

Net income attributable to common stockholders was $43.5 million, or $0.52 per fully diluted share as compared to net losses attributable to common stockholders of $(3.4 million) or $(0.04) per share in Q1 2011 and $(23.3 million) or $(0.47) per share in Q2 2010.

Mountain Pass sold 829 metric tons of REO equivalent products, a 19% sequential increase and 212% year-over-year increase. Mountain Pass realized an average sales price of $72.80 per kilogram compared to an average sales price of $37.73 per kilogram in Q1 2011, and an average sales price of $7.16 per kilogram for Q2 2010. Silmet's sales in Q2 2011 included 217 metric tons of REO equivalent products at an average sales price of $69.27 per kilogram and also included 80 metric tons of rare metals (niobium and tantalum) at an average sales price of $167.50 per kilogram. MMA sold alloys containing approximately 53 metric tons REO equivalent products to contribute $10.3 million in revenue.

A majority of the Mountain Pass' lanthanum sales are to one customer under a contract that includes a price cap. That contract was renegotiated effective July 1, 2011 to better reflect the increase in market prices for lanthanum products. Excluding those sales, Mountain Pass' other products realized an average sales price during Q2 2011 of $104.95 per kilogram, as compared to $65.95 per kilogram in Q1 2011....MORE