06. May 2021 | 10:52 CET
Deutsche Rohstoff, Varta, ThyssenKrupp, Glencore: These stocks are on the rise!
Commodity companies around the world are producing at the limits of their capacity. The omnipresent supply deficit is not only boosting commodity prices themselves, but it is also giving the mine operators a good boost. The first quarter of 2021 is showing one of the strongest inflationary pushes in the resources sector in 10 years. Copper, for example, is now trading at the USD 10,000 mark, nickel is at a 10-year high of USD 17,700, and there is no stopping palladium. We take a closer look at some of the profiteers.
time to read: 4 minutes by André Will-Laudien
"[...] China's dominance is one of the reasons why we are so heavily involved in the tungsten market. Here, around 85% of production is in Chinese hands. [...]" Dr. Thomas Gutschlag, CEO, Deutsche Rohstoff AG
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Deutsche Rohstoff - The annual figures 2020 and convincing outlook
For the current year, the sails are fully set for Deutsche Rohstoff AG (DRAG). Higher oil prices and the supply shortage of metals are playing into the Company's hands. Thus, the guidance for 2021 is also EUR 57 to 62 million in sales, after a depressed EUR 38.7 million last year due to the pandemic. On the operating side, between EUR 42 million and EUR 47 million are expected to remain in the books; here, the previous year's comparison of EUR 23.9 million is conciliatory.
The optimistic outlook is, of course, based on an excellent start to the year in the first quarter. Deutsche Rohstoff's oil-producing subsidiaries produced a net total of around 570,000 barrels of oil equivalent (BOE), of which about 330,000 were oil and the rest in gas. Consolidated net income is expected to be around EUR 11.5 million, on sales of around EUR 17 million. At around EUR 21 million, EBITDA is strongly influenced by other special operating income, which results from gains on the disposal of the equity and bond portfolio.
The bottom line for DRAG in fiscal year 2020, calculated according to preliminary figures, is a loss of EUR 16.1 million (according to HGB). For the current and coming fiscal year, however, Deutsche Rohstoff is again significantly more optimistic and raises the outlook accordingly. There is no dividend payout for 2020, as it makes perfect sense to keep the holding Company in a good cash supply to be able to take advantage of M&A opportunities in the rapidly growing commodities market on a case-by-case basis.
CEO Dr. Thomas Gutschlag comments, "All in all, we were able to put the Corona year behind us relatively well. Our decisions to reduce production as much as possible, buy low-cost acreage, and generate additional income with an equity portfolio were correct. Accordingly, we are very confident for the current and the coming year. The first quarter of 2021 shows the direction we are going with a strong result." The DRAG share price is currently approaching the EUR 13 mark and has survived the recent market correction without any blemishes. Here it will probably continue to go up!
VARTA - Good prospects, but the price stumbles
If not Varta who then, asks the inclined reader? Varta is well-known as a supplier of good household batteries. However, this year electric mobility is now to be tackled. That means, first and foremost, large investments with the OEMs of the automotive industry and long development cycles until a mature market product is created. No pain, no gain, says an old truism!
In the end, however, we find ourselves in an absolute boom market, which is also strongly supported by the state. According to the German government, approximately EUR 150 billion will be made available for Green Planet projects over the next 10 years. Varta could also participate with its future-oriented research, because after all, the new battery should be much more efficient, quicker to recharge and use fewer harmful metals.
On May 12, Varta will present its Q1 figures. The price currently fluctuates very strongly between EUR 115 and EUR 130. Strong momentum could emerge at both break-off edges; presently, the share is more likely to be found at the lower edge at EUR 118.
ThyssenKrupp - Here, things could go further up
ThyssenKrupp's stock has been fully in investors' target range since the major Group restructuring became known in fall 2020. After all, the news in recent months has seen the share price rise by a staggering 200% from EUR 4 to a fabulous EUR 12. But where do we go from here?
The steel industry is facing massive change and the transformation to climate-friendly products will initially require investments worth billions. Given the unstable balance sheet structure, this will be an enormous challenge for ThyssenKrupp. The government is to mobilize at least EUR 5 billion for decarbonization projects between 2022 and 2024. German Economics Minister Peter Altmaier announced this at the beginning of the week following a meeting with German steel manufacturers and IG Metall representatives. Altmaier put the total investment required for the transformation to CO2-free steel production in Germany at EUR 35 billion.
There is still a lot to get going! Therefore, the starting signal for ThyssenKrupp could be start-up financing from Berlin because this mammoth project will not be tackled on its own. In any case, the TKA share price has been sitting on the sidelines for 2 months. If the breakout above EUR 12 succeeds, there will be follow-up purchases.
Glencore - Good figures boost the chart
Glencore is running like clockwork. The commodities trader and mining group mined slightly more copper in the first quarter of 2021, but at the same time, coal production declined. Overall, production at the mines developed roughly in line with expectations, Glencore states in its latest production report.
Oil production fell by a significant 41% to 1.1 million barrels. Here, the oil fields in Chad were temporarily shut down for maintenance work. By contrast, the start-up of the project in Equatorial Guinea in February provided some relief. In the copper division, however, Glencore recorded a 3% increase in production to 301,200 tons. Given the battery hype, it is certainly important that cobalt production also increased by 11%.
As announced, Glencore is sticking to its production targets for the full year 2021. The shares chart now looks promising because with overcoming the EUR 3.50 mark, it could quickly go to old highs.