alertmeipp

>>Fairfax also owns convertible debentures of SFK (the "Convertible Debentures") that are convertible into 1,250,000 units of SFK It's from my misread. so, about 6 million worth.. not much..

Margin is starting to go to the right direction. Hopefully the cost-saving will continue to hit the bottom line (they may as well cut the website - it's still not up yet!) The "listed" NBSK pulp price looks good. However, the actual sales price is still about 15% lower because of the discount (actual sales price 864$). Had they able to actually sell at listed price, the profit will be enormous like (50m more!) While selling at listed price is practically impossible (Catalyst's is 840, Canfor is like 900*), if they can cut discount by to 10%, it will be an additional of 20m to the bottom line. As at July 16, 2010, the Company had drawn US$10 million under the ABL Credit Facility + 78M Term loan = total 88m Vs. before As at June 30, 2010, $114.0 million (US$107.5 million) was drawn under the Old Term Facility and $35.3 million was drawn under the Old Revolving Facility (of which $15.0 million was denominated in US dollars). = total 130m ~42m less outstanding balances (probably from offering). 16m receivable + 30m more cash generated by year end should allow them to call the converts comfortably. However, they will potentially issues more shares for the convert if the share price recover a bit from here. They keep mentioning it as a possibility: "Fibrek may elect to satisfy its obligation to pay the principal amount of the Debentures by issuing Common Shares." The right offering if nothing else put Fairfax in a very good position regarding its converts: 1) allow Fibrek to pay them back in cash. 2) Or to pay them back in shares at a great discount to book. FFH screws us big time is my read. :)

i think u ought to look into embedded value for insurance companies as well - especially for companies like MFC.

>>there was nothing impressive in this report. The report is the history. The CC is impressive, it explains the value in the company a lot and why ARD acquisition makes sense amid dilution.

market reaction is kind of silly today. the volume is the same, but oil is much more profitable than gas. SD now has option not to drill for NG.

I doubt they will do anything silly. The impression I got from the call (I missed the first part) is they raise the money to assure that they can stand another downturn if it comes. They seems pretty happy about the rating agencies' upgrade (the market doesn't care!) If they were to issue bond to pay off the existing one, they should be able to get better rate with the current rating. (hopefully not convert!)

I think it's down because Reuter said production forecast is down. But it's not the case.

Just scanning through it. Nothing in Sedar yet! Re: cash Cash balance up to 42million - up 12millions from Q1. Accounts Receivable from Q1: up ~9 millions Accounts Payable from Q1: down ~4 millions Inventory from Q1: down ~8millions. So, net about 5millions more cash there. Margin is %13.5 vs ~11% in Q1. 1% translates to almost ~2mllions in additional Ebitda. So far so good.

2Q will be coming out any second now. Hope it's not a disaster.

Can't believe their website is still under construction. ???

SharperDingaan, You sounds like a yahoo pumper. Just jokes. What's your cost basis? less than 30 cents? Mine is around 1.2-1.3.. :'( Hopefully, we all make money here.

Up quite a bit today on lousy volume. The arb trades are probably done. Yup. US is 50%, Canada 20%, Euro: 26%... rest is minimal. Hopefully, the recent pull back will also caution producers from bring more capacity on time soon. World consumption is up about 2-3%, put that on top of econ recovery, we should have high price to work our way toward debt-reduction.

CFX.. margin improve to 26%... if FBK had their margin, it's EBITDA will be 36.4m. but last 1Q was 11%(SFK) vs 18(CFX). If u model CFX's margin improvement to FBK, u get about 16% margin, EBITDA will be ~22m vs ~15m last Q.

stock up 1% at the end. http://www.opinion250.com/blog/view/17020/3/pulp+market+entering+uncharted+territory Prince George, B.C. - After boasting record sales in the quarter just ended, the President and CEO of Canfor Pulp Limited Partnership says there are mixed signals in the pulp market outlook for the rest of the year. During a conference call this morning to discuss CPLP's glowing second quarter, President and CEO, Joe Nemeth, says the uncertainty is coming from China where there is a strong downward pressure on prices that doesn't seem to 'fit' with where the rest of the market sits. "To be totally frank, We're scratching our heads, we really are," says Nemeth. "If you look at the physical stock numbers and if you look at the strength in demand coming primarily from North America and Europe...you have an extremely tight, strong pulp market. On the other hand, you have some disruptions from China, in terms of consumption, that's putting real downward pressure on pricing, so the question we're asking is 'how long and how far can this current downward pressure continue?'." The CPLP CEO says, historically, after the last two big peaks in pricing, the price for pulp came down quite quickly and quite far. But, he says, in both those cases, inventories were rising and were quite high...whereas, in this case, they're not. "It's all dangerous to ignore history, but we're in new territory in terms of inventory levels and that's what's perplexing." Nemeth says CPLP has taken steps to remain competitive -- announced July list prices for NBSK pulp are unchanged for North America at US$1,020/tonne and US$980/tonne in Europe, but prices for China are down US$50 for this month and North American prices will fall by US$30 in August. He adds CPLP's order books for the various markets it services are "fully sold".

cfx.un ups 3% after result

Maybe FBK will submit a bid.. Domtar seeking offers for its closed pulp mill in Lebel-sur-Quevillon, Que. MONTREAL - Domtar Corp. (TSX:UFS) announced Wednesday that it is seeking offers for a kraft pulp mill in Lebel-sur-Quevillon, Que., that has been idled since November 2005. Pre-qualified bidders, including the local municipality in northwestern Quebec, must submit offers for the land, buildings and equipment by Sept. 3. Domtar indefinitely closed the plant in December 2008, three years after production was stopped because of unfavourable economic conditions. The mill's 425 workers had produced 300,000 tonnes of pulp annually. Shares of the company were down more than three per cent, or $1.63, to $5.80 in late Wednesday afternoon trading on the Toronto Stock Exchange.

good volume today.

Dazel, why don't you send your suggestion to the management?

so, you don't feel frustrated at all when the share price drop everyday with a pretty favorable operating environment? I take it FBK is a small holding for u?

SD, My understanding is the rights is as a result of the last year negotiation. Anyone adding at this level?

Dazel, I am in that group as well. I apparently owned too much of it. I have been selling some at a lost last couple weeks. Will keep the rest. I see two scenarios: Buyout scenario: CFX.UN's market cap is 500millions, they own 50% of 3 mills. Total capacity is 1.1 million tonnes. Its debt is minimal and they pretty much distribute all the cash out. So, it's 1 billion for 3 mills. I realize their mills also produe kraft paper, but ebitda from it is minimal. FBK's SF mill can provide 0.36 millions tonnes per year. So, based on CFX.UN's market valuation. the SF mill would fetch about 300millions. Net debt for Fibrek is about 200 millions. So under that scenario, Fibrek will be left with the RBK mills (they bot it for 180miliions few years ago) with 100 million of cash. The SF mill is actually one of the lowest cost producer in Canada, however, due to the high Western wood chips price, it's not a very profitable mill so far. Historically, Western Canada wood chip is more pricey in relative to east (~75$ vs 125$); we knew from the last CC Western Canada wood chip price has been coming down since beginning of this year. SF mills uses 775,000 tonnes annually, so SF mill can literally generate close to 40millions FCF if the western chip price goes down to match east side. There are also tax credit as well as the power supply agreement that comes with the SF mills. Attractive, right? Who knows, it may makes sense for CFX will diversity its portfolio... wait till they convert to Corp. :) Acquirer scenario: The name Fibrek suggests to me they want to do more than Pulp; they may want to acquire couple wood sawmills to secure and lower their wood chip (wood fibre) cost. Maybe FFH will just have ABH and FBK strike a win-win deal. 20 dollars of the market price would mean 20millions FCF. FBK's market cap is 130millions, EV value is about 330 millions - will be less than 300millons by year end if FBK generate additional 30 millions by then. The trick about Fibrek is pulp price, currency exchange, wasterpaper price and fibre prices are all important. Check my numbers! Thoughts?

Oh, I think time is certainly on your side if the date/year on that article is correct :) Market Pulp Prices Backing Off as Supply Grows, Demand Slows July 13, 2020 - The typical slowdown in summer demand, coupled with the restarts of a number of pulp mills in North America and Europe, is quickly cooling off the hot market pulp sector, say industry observers. I am thinking those those price cuts are done for some specific reasons, at least I don't see any price cut from any major producers yet. Pulp producers pps has been going down for awhile while the pulp price was increasing so obviously, a price cut is widely expected. Hopefully, Fairfax did their homework.

Cardboard, Obviously, pulp price is going to correct eventually...Many forecast the pulp price will drop 100+ dollars toward year end. But don't you think the current price has priced into a dull future already?

- $78 million term loan - $75 million revolving facility - $48 million convert. +40m cash +29m cash on hand Q1. +15m generated from Q2 They do have lot of liquidity. They will save quite a bit of interest expense by having this larger revolving facility as they can put their cash in there without affecting their liquidity. Mostly likely, for the rest of this year, they will mainly just need to pay interest on the term loan and the convert. And the should have enough cash to pay off the covert by year-end if they like to. We are talking about 10millions interest saving per year in 2011, that's 9 cents per share to the bottom line. (I am assuming they can generate 30million cash from Q3+Q4). thoughts?

Cardboard, the new one is fixed, the old one is Libor+. So, it should be better long term. nothing we can do except to wait for the 2Q result in August. Just let the numbers do the talk.