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May 10th, 2024 | 09:45 CEST

Desert Gold, Fresenius, SMA Solar: Emerging industry leaders in gold, medicine and renewable energies - investment opportunities in focus

  • Mining
  • Gold
  • renewableenergies
  • Healthcare
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This year's growth sectors are medicine, renewable energies and, due to the numerous geopolitical tensions, gold. The price of the precious metal has already climbed by 18% since January. In addition to its inflation protection function as a portfolio hedge, gold is also used in jewellery manufacturing, the electronics industry, and medicine. An increase in global demand for gold in these sectors can increase the profitability of gold mining companies and offer investors attractive returns. Desert Gold Ventures is an emerging explorer with gold deposits in West Africa. The area has many lucrative features. In the medical sector, Fresenius announces the completion of its restructuring measures by taking a tough and logical step towards more growth. Companies like SMA Solar in Germany, focusing on solar production, must also factor in the consequences. Where are investment opportunities with predictable risk?

time to read: 6 minutes | Author: Juliane Zielonka

Table of contents:

    Gary Cope, President and CEO, Barsele Minerals
    "[...] I wouldn't be surprised if the project ends up showing more than 5 million ounces. [...]" Gary Cope, President and CEO, Barsele Minerals

    Full interview


    Desert Gold Ventures - On course for growth in Western Mali with a dual strategy

    Desert Gold Ventures is a gold mineral exploration and development company based in the African Senegal-Mali shear zone in western Mali. The region is known for being home to several world-class gold mines, including Barrick Gold. Mali is also the third largest gold producing country in Africa, with a wealth of significant gold deposits comprising several million ounces.

    Desert Gold has been actively operating in Mali since 2011. The Company's flagship project is the Senegal-Mali Shear Zone Project, which covers a central landholding of over 440 sq km. With combined resources of over 1.1 million ounces of gold and more than 25 gold zones on the property, with the lucrative feature of being geologically open, Desert Gold Ventures will continue to expand its resource base.

    The Company is pursuing a dual strategy of both exploration and mining. While exploration is focused on building a solid foundation for potential world-class mines, the Company is simultaneously evaluating the feasibility of mining oxide gold using the heap leach method. Heap leaching involves layering crushed ore onto impermeable plastic sheeting or clay-coated tarps. It is then doused with a leaching solution containing ammonium sulphate or oxalic acid, among other things, to extract the metal oxides. This dual strategy could make the Company a significant player in gold production, especially given the current mining activity in the region.

    With investors from the US, additional exclusive shareholders and given the continued activity and growth potential in the gold sector in Mali, the Company remains well positioned to capitalize on this booming market and continue to advance its expansion plans. Investors can find more information in the presentation below from the 11th International Investment Forum that took place on April 17, 2024

    Fresenius completes restructuring with exit from VAMED and raises guidance

    Fresenius completed its restructuring measures this week with a "structured exit" from its loss-making service unit VAMED. VAMED is a provider for hospitals and other healthcare facilities. VAMED's business model includes project development, planning and turnkey construction, maintenance, technical, commercial and infrastructural services through to the overall facility management of healthcare facilities. So much so and so loss-making that VAMED is still (link: text: busy realigning itself internally.

    Fresenius, on the other hand, has exceeded the expected results from Q1/24 and is generating around EUR 90 million with the sale of VAMED Austria to the construction groups Porr and Strabag. However, the hospital services remain with Fresenius. This indicates that the management team is refocusing on its core competencies around medical care along the patient journey instead of venturing into real estate. VAMED accounted for around 10% of Fresenius' revenue in 2023 and posted an operating loss of EUR 16 million. International VAMED projects will be successively downsized by the end of 2026. "With the exit from VAMED, our strategic portfolio restructuring has been completed as planned," says Fresenius CEO Michael Sen, who has led the Company with a firm hand to save money and reduce debt since October 2022.

    Shares of Hesse-based Fresenius were up 3.2% at 08:22 GMT, their highest level since early January. The Company also announced that it had raised its full-year guidance following a solid first quarter and improved business prospects for its generic hospital drug maker, Fresenius Kabi. The generics market is growing rapidly as patents on pharmaceutical products expire. Fresenius management expects organic Group revenue to grow by 4% to 7% this year, compared to the previously expected 3% to 6%. Expectations for the EBIT margin are also being raised from 15% to 16%.

    In the first quarter, earnings before interest and taxes (EBIT) amounted to EUR 633 million, above analysts' expectations of EUR 606 million, according to an analyst consensus by Vara Research. In addition to the encouraging results, Fresenius Medical Care beat its first-quarter operating profit forecast this week due to higher prices and cost reductions .

    SMA Solar: SMA Solar's profit almost halved in Q1/24, management speaks of transition year

    One man's joy is another man's sorrow. Increased costs at the production site and hesitation among B2C customers are illustrated by SMA Solar's latest figures. The Company from Niestetal in Hesse reports sales of just under EUR 362 million in the first quarter, which is almost on par with the previous year. Despite a significant increase in business with large-scale industrial projects, the weak demand for private and commercial solar systems could not be compensated for. The share price recently fell by 8% to EUR 46.02. The drop since the beginning of the year now amounts to almost a quarter.

    Earnings before interest, taxes, depreciation and amortization (EBITDA) fell by almost 17% to just under EUR 50 million, mainly due to higher costs and less profitable orders. This includes a one-off income of just under EUR 20 million from the sale of SMA's shares in the joint venture Elexon. At the bottom line, profit almost halved to EUR 28.5 million.

    Incoming orders fell from EUR 1.7 billion at the beginning of the year to just under EUR 1.5 billion, mainly due to the decline in product business. Around three-quarters of orders were for products, with the remainder for services. The Sales in the large-scale systems segment will continue to grow strongly due to the existing high order backlog and continued high demand.

    Due to high customer inventories, SMA Solar expects order acceptance and revenue growth in the Home and C&I segment to occur in the second half of 2024. Against this background and given a normalized supply and order situation, management interprets 2024 as a transition year. For the Company as a whole, management continues to expect sustained revenue growth and a double-digit EBITDA margin in 2024.

    Analyst Constantin Hesse from Jefferies points out, however, that incoming orders also declined compared to the final quarter of the previous year due to both the seasonally weaker business with major customers and further cancelled orders from private and commercial customers, which weighs on profitability. Overall, the results were well below market expectations.

    Investment opportunities with predictable risk can be found in sectors with sustainable growth potential, such as medicine, renewable energies and gold. Desert Gold Ventures, an up-and-coming explorer with gold deposits in West Africa, offers a promising opportunity. The region is known for world-class gold mines, which offers potential for profitable growth. Desert Gold is pursuing a dual strategy of both gold exploration and mining. Fresenius has successfully completed its restructuring measures and is withdrawing from the loss-making VAMED business. The Company is now focusing more on its core competencies in the medical field and continues to pursue a tough cost-cutting course, which creates a more stable basis for future growth. Fresenius' recent positive results and the increased annual forecast point to this. SMA Solar reported a decline in profits due to increased costs and weak demand for solar systems. Management sees 2024 as a transition year and hopes for a normalization of market conditions in the second half of the year. Despite these challenges, SMA Solar's long-term potential in the area of large-scale systems is recognizable. Precious metals appear to be the safest and also the best inflation compensation.

    Conflict of interest

    Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.

    In addition, Apaton Finance GmbH is active in the context of the preparation and publication of the reporting in paid contractual relationships.

    For this reason, there is a concrete conflict of interest.

    The above information on existing conflicts of interest applies to all types and forms of publication used by Apaton Finance GmbH for publications on companies.

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    Der Autor

    Juliane Zielonka

    Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.

    About the author

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    Commented by Juliane Zielonka on May 17th, 2024 | 07:00 CEST

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