Metals & mining: Scotiabank expects strong Q1 results on higher prices
19/04/2021 12:07
** Scotiabank expects Q1 earnings for most of metals and
mining cos in its coverage to significantly improve on a q/q and
y/y basis, thanks to stronger commodity prices
** Brokerage does not expect material changes to recently
released 2021 outlook, shareholder return policies
** Expects Q1 core earnings of copper-focused miners Lundin
LUN.TO , Teck Resources TECKb.TO , Nexa Resources SA NEXA.N
Capstone Mining CS.TO , to be 4%, 6%, 12%, and 18% above
consensus, respectively
** But EBITDA of Hudbay Minerals HBM.TO and Ero Copper
ERO.TO is estimated to be 6% and 7% below consensus,
respectively
** Brokerage forecasts miners to generate total $1.5 bln of
free cash flow in Q1/21 vs $2 bln in Q4/20, with only HBM, NEXA,
and TECK likely to see cash burn due to project builds
** Brokerage says Freeport-McMoRan's FCX.N updates on
ongoing ramp-up at Grasberg mine will be important when it
reports on April 22
** Anticipates market to focus on any updates to Teck's 2021
outlook, coking coal market outlook and remarks on QB2 copper
project given recent travel restrictions in Chile
** Scotiabank's preferred equity exposure is to Champion
Iron CIA.AX , CS, FCX, FM, LUN and TECKb, heading into the Q1
reporting season
(Reporting by Arundhati Sarkar in Bengaluru)
((Arundhati.Sarkar@thomsonreuters.com;
twitter.com/Arundhati_05; +1 646 223 8780 Ext: 2776))