FGE.to - Fortress Paper (formerly FTP.to)

[OptsyEagle]

Anyone have any idea when we can expect the Chinese (MOFCOM) to review the current anti-dumping ruling for FTPs dissolving pulp?

[triedtestedand]

OptsyEagle:

  Check out documents in the following:

   https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds483_e.htm

   The latest document from June 7, 2017 notes very succinctly:

"We wish to inform you that, pursuant to Article 21.3(b) of the Understanding on Rules and Procedures Governing the Settlement of Disputes, Canada and the People's Republic of China (China) have agreed that the reasonable period of time for China to implement the recommendations and rulings of the Dispute Settlement Body (DSB) in the China – Anti-Dumping Measures on Imports of Cellulose Pulp from Canada (DS483) dispute will be 11 months from 22 May 2017, i.e. the date of adoption of the DSB's recommendations and rulings. Accordingly, the reasonable period of time will expire on 22 April 2018."


DP prices have remained firm now for several months at ~$920USD ... helped in no small part by the strength of BEK & NBSK markets (with swing mills switching to such vs DP to max profitability)

If FTP's MOFCOM burden essentially comes off in ~3mo from now, it'll remove one more weight from their shoulders.


Cardboard & roundball100:

- LIBOR & 5.75% brings them to about 7.5% at current rates ... so not much different than their other long term debt ... and with it as a revolver vs a loan, then they only pay for it as they need to
- the amount isn't big, but does allow them to leverage an unencumbered asset to add to their cash pool

I think they want to get ahead of things as much as possible with the $62M of 2019 debs ... the more they can get those paid down/paid off ... the more proactive they can be elsewhere ...  their other lenders all seem fairly friendly

[roundball100]

TriedTested - thanks.   It's been a long wait.   -Roundball

[Cardboard]

https://www.stockwatch.com/News/Item.aspx?bid=Z-C%3aFTP-2562986&symbol=FTP&region=C

This guy is delusional.

The sale of the security paper business was a disaster: lost one client and had to fire sale the whole thing.

Thurso should emerge from its operational hiccups and hopefully that we get better DP pricing along with a benefit from the end of the Chinese duties. However, it has not created any value yet.

Now, there is a tiny bit of cash on the balance sheet or still not enough to honour coming maturies in full and the guy is talking like we are some sort of financial global behemoth hunting the world for opportunities or a beast to reckon with???

Cardboard

[sculpin]

https://ca.reuters.com/article/topNews/idCAKBN1FR2PM-OCATP

As cryptominers eye Quebec, forest companies see opportunity

MONTREAL (Reuters) - At least two Canadian forestry companies are reviewing offers by cryptocurrency miners who want to lease excess mill space in Quebec, a province where electricity prices are among the lowest in North America.

Resolute Forest Products (RFP.N) and Fortress Global Enterprises (FGE.TO) said they have received interest from Canadian and foreign cryptominers, although both cautioned their talks are preliminary.

“They want space and cheap power,” Chad Wasilenkoff, chief executive of British Columbia-based Fortress Global, said. U.S. miners are interested in space at the company’s Quebec dissolving pulp mill, he added.

[doc75]

PR should be released soon, but Q4/Annual reports are already posted on Sedar.

Q4 was ugly.  Operating EBITDA loss of 5.7mm for Q4, with a loss of 4.4mm from the dissolving pulp segment, *after* adjusting for 1.3mm in extra costs associated with the the aux system failure.  Production of DP at 27500 ADMT, down significantly (no surprise).

Unrestricted cash at 40.9mm at Dec 31 plus 7.8mm restricted cash.  The MD&A reminds us that the 2019 debentures can be redeemed with common shares, if necessary.  No mention of China duties.

[Cardboard]

Not that bad as Q4 was largely expected to be poor:

Current price of $930 U.S./ton for DP is pretty good for the low season, plant problems behind them, large production expansion which will increase revenue and reduce cost, WTO ruling to matter soon on pricing and a high value, low cost xylitol plant coming in 2020 with Mondelez in the picture.

Looks promising IMO.

Cardboard

[triedtestedand]

Q4/17 = kitchen sink quarter
Q1/18 = mediocre, but finishing off well

Tidbits from call and questions to mgmt:

- producing now at "high 400's per day" ... if assume 480/day then that would be >40K/ADMT in a quarter
    - if so, then costs/ADMT will go below $900CDN/ADMT

- MOFCOM is mostly mitigated (now <$20USD/ADMT mitigation), so almost a non-issue/dependency on Chinese/WTO elements

- deferral of 2018 Investissement Quebec principal and interest helps a lot w cash

- w CDN$ @ $.77USD and DP @ $930USD/ADMT and above and reliable ops and non-winter type impacts on costs ... dare we see two really solid quarters (Q2/18 & Q3/18) in a row ... and impact of 5th digester providing reinforcement?

[KJP]

Do you trust this crew with the xylitol plan?

[Cardboard]

"Do you trust this crew with the xylitol plan?"

Yes and I hope that they can accelerate.

Chad is a project/venture type of guy and quite capable to attract capital. Licensing the technology is also major upside as discussed on the call and having a good salesman, contract guy helps.

On capital, most of the funding for the demonstration plant will come from governments which is a big plus. They have had hiccups at Thurso but, I think it is now all coming together.

There could be delays and issues since this is development but, capital at risk is very low. Mondelez also seem to have been quite involved in this technology and use a lot of Xylitol which I really like. IMO, it is pretty much all upside since the plant will keep doing its thing and while the Xylitol productivity is yet to be seen, the fact that it is burned material today, any recovery only helps.

I was afraid for a while that he would venture into some risky/non-related business. However, this is very positive IMO.

Cardboard