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Gold/Mining/Energy : NGL to da moon (well, maybe to $10?)!!
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To: Elroy who wrote (9)5/31/2023 3:00:10 PM
From: Elroy  Read Replies (1) of 127
 
NGL reports March Q (fiscal year end) after the close today.

I think EBITDA for the trailing 12 months will be about $640m.

The last press release said they would give EBITDA guidance for the 2024 fiscal year (ends March 2024) in this release.

Is EBITDA about the same as Operating Cash Flows?

If so, they've got plenty of operating cash flows to straighten themselves out and begin again paying distributions.
Debt is about $2.9 billion due between 2025 and 2027, and they've got a bit less than $1 billion in high interest preferred stock (which is currently in arrears.

They can theoretically issue $4 billion in new debt, lets call it 2030 debt. Lets give it a 10% coupon.

That $4 billion can be used to buy back all existing 2025-2027 debt, and all the preferred stock.

That costs $400m per year in interest.

If they maintain EBITDA at just $640m, they can pay $400m per year in interest, $200m per year in Cap Ex, and that leaves $40m for distributions. That's about 30 cents per year (130m units outstanding).

Then, if EBITDA grows at alll as it has in the past three years, Cap Ex and Distributions can rise with EBITDA.

I think this "return to normalcy" will become apparent as fiscal 2024 progresses, and I think NGL has a reasonable short to get to $10 within 2 years, 3 years maximum, and resume paying distributions as well.

All they need is EBITDA to stabilize at $640m. If EBITDA goes up over the coming years, then NGL is going to be a bonanze of a stock.
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