Today’s blog is very late because I had a business breakfast with a portfolio company after which it turned out that my credit cards had gone missing from my wallet which was hanging behind my seat in my handbag. The hotel where the staffers had the opportunity to snatch was once the finest in my city. It will remain nameless with its head hanging in shame.
I will report to the paid contingent on my views on the portfolio company because my notebook was not disturbed as hotel staffers produced coffee and croissants and scrambled eggs and fruit and all the fittings and groped behind me for cards not cash. This is the price of operating in a big city.
Wisdom Tree today launched its Global Small-Cap Dividend ETF, (GSD). That shows an interest in this stock market strategy by the managers and the potential clients. But is a fund the way to go into small caps? I think not, but I would say that.
Today’s truncated news columns are about Britain, Brazil, Canada, Australia, and Mexico for the most part. I have to call my credit card companies.
*Any attempt to hide behind the supposed protection of corporate interests via their 60-year-old jv called Sanmarco was abandoned today by the chiefs of BHP-Billiton and Vale (VALE).
Brazil’s environment minister said that the companies would have to pay for the massive cleanup at Mariana where a mudslide covered areas in two states covering about 100 km (62 miles) of the floodplain which was hit by the broken tailings dam at their iron ore mine. An initial fine of $66 mn was imposed. PM Dilma Rousseff compared the mess to the BP (BP) spill in the Gulf of Mexico. Apart from the cleanup the companies also face fines. The two CEOs apologized and promised 100% support to their jv to meet its obligations. Vale was off over 3% today in Brazilian trading at the equivalent of $3.95, below what I had just paid but now has recovered.
*Speaking of BP and Brazil, it has shelved much of its sub-salt offshore exploration capital spending and while not going as far as Shell in the Arctic (throwing in the towel), its level of spending will be $2.5 bn over this year and next, from $4.5 bn. Not all the cuts are by BP itself; the day rate for rigs has collapsed with the oil price.
*Cosan Ltd (CZZ) which mostly makes sugar and ethylene produced sour Q3 results showing a reais 13..3 mn loss (now $3.8 mn) more than double the a prior year Q3 profit of R15.2 mn (then $6.7 mn). Revenues were up 7.5% in reais to 2.259 bn because of much higher levels of sugar sold as well as a modest increase in ethanol sales using sugarcane waste, or begasse both in Brazil and outside it. CZZ hedges its export sugar targets. Non-ethanol energy sales were mixed but fuel distribution fell with the Brazilian economy. It expects the present harvest to make up for the poor one last year, with a full year production of 57-60 mn metric tonnes of sugarcane crushed and output of 4.2-4.4 mn tonnes of sugar and 1.9-2.1 bn liters of ethanol, a recovery from the last harvest.
Adjusted cash flow (earnings before interest, taxes, depreciation, amortization,and asset sales) was reais 572 mn, up 70% from the prior year Q3 mainly from higher prices and volumes in ethanol. Normal EBITDA showed a 4% drop. Normalized EBITDA was 6% higher because expenses were controlled.
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