August 3rd, 2023 | 07:10 CEST
The strategy works - Nikola, Power Nickel, CENIT AG
Table of contents:
"[...] Nickel, therefore, benefits twice: firstly from its growing importance within batteries and secondly from the generally growing demand for such storage. [...]" Terry Lynch, CEO, Power Nickel
CENIT AG - Clear vision in sight
The growth strategy of Peter Schneck, who has been at the helm of CENIT AG since January 2022, is taking full effect, despite a challenging economic market environment. The continued strong consulting and service business with a growth of 57.5% compared to the same period of the previous year as well as growing recurring revenues, brought the Stuttgart-based company an increase in revenues of 18.3% to EUR 87.47 million for the first half of the year. In addition, the Company has an order backlog of EUR 59.26 million, around 19% more than in the first six months of 2022.
For 2025, the Industry 4.0. group plans to achieve sales of more than EUR 300 million and a stable return on sales of between 8% and 10%. In terms of profitability, CENIT AG is also moving in the right direction. EBITDA grew by 70.1% to EUR 5.75 million, while EBIT exploded by 134.1% to EUR 1.12 million, resulting in earnings per share of EUR 0.185, compared to EUR 0.046 in the first half of the previous year. In addition, with bank balances and cash and cash equivalents amounting to 19.6 million, the prerequisites are in place to continue to grow both organically and inorganically.
For the full year 2023, the Company management estimates consolidated sales of around EUR 180.00 million and EBIT of around EUR 9.5 million, assuming that inflation and economic risks do not develop further into negative territory. The stock market value of CENIT AG currently stands at EUR 110.45 million at a share price of EUR 13.20. The order book shows that CENIT AG's share price has risen to EUR 1.00. In the order book, it can be seen that the sell-side has thinned out significantly in recent days. The Hamburg-based analyst firm Montega issued a buy rating with a price target of EUR 20.00 in its current study, while the Augsburg-based GBC AG followed up with a buy recommendation and a 12-month target of EUR 19.75.
Power Nickel - Strategic course set
Decisive for the future were also the recently implemented measures by the experienced CEO of Power Nickel, Terry Lynch. With respect to the flagship Nisk project, a high-grade nickel, copper and platinum group metals project near Nemaska, Quebec, the option for 50% of the acquisition was drawn. In addition, the partner Critical Elements Lithium Corp. was encouraged to exercise the second option for an additional 30%. The submission of a NI 43-101 technical report alone, which includes a resource estimate and is expected to be ready by the end of the third quarter or early in the fourth quarter, remains the final condition precedent before Power Nickel becomes 80% owner of the high-grade deposit, which is expected to be developed into Canada's first carbon-neutral nickel mine.
In addition to Nisk, Power Nickel has further upside potential through the spin-off of major properties in the Canadian province of British Colombia and Chile through contribution to Consolidated Gold and Copper Inc. management to allocate 25% of Consolidated shares to Power Nickel shareholders.
The Golden Ivan concession, located in the center of the Golden Triangle, and the five concessions covering more than 50,000 acres strategically located in the high-yield iron oxide-copper-gold belt in northern Chile will be included. The Canadians are the sole owners of all the deposits. In addition, there is a 3% NSR royalty on future production from the Copaquire copper-molybdenum deposit, which was sold to a subsidiary of Teck Resources Inc. Under the terms of the purchase agreement, Teck is entitled to buy back one-third of the 3% NSR royalty for CAD 3 million at any time. The Copaquire concession area is adjacent to Teck's Quebrada Blanca copper production operation in Chile's First Region.
Power Nickel currently has a market capitalization of CAD 26.49 million. The upside at the high-grade Nisk project and the spin-off fantasy promise rising quotations in the long term.
Nikola - Comeback to stock market star
Just weeks ago, the Company, which was shaken by allegations of fraud, was pronounced dead by many investors and analysts. Since the beginning of June, the Phoenix-based provider of zero-emission transportation, energy supply, and infrastructure solutions has been making an impressive comeback. Driven by consistently positive news, the Nikola share put up a performance of over 440% during this period. By exceeding the high for the year at USD 2.98, the share price could pick up speed once again and propel the stock into the USD 3.80 range.
The latest coup is the commitment for additional grants and government funding of USD 16.3 million to allow Nikola to build seven open-grid hydrogen fueling stations. The additional grants build on the strategic partnership with Voltera to develop up to 50 HYLA stations across North America over the next five years. The total funding amount is USD 58.2 million.
This grant also includes the USD 41.9 million in Trade Corridor Enhancement Program funding, which will create a total of six hydrogen fueling stations along California freight corridors within the South Coast Air Quality Management District, San Diego County Air Pollution Control District and the Mojave Desert.
CENIT AG shone with strong half-year figures despite the challenging economic environment. Two strategically important steps were taken at Power Nickel. The upward trend at Nikola is likely to gain momentum once the year's high is overcome.
Conflict of interest
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