Thanks for the interesting article. does your 21 EBITDA include the one off gains from customer payments of $47 mn? Does it make sense to include it? Does that mean you anticipate around 30% EBITDA growth in 22? What multiple do you think their isp business would trade on if they didn't own the frac sands business? Is 10-12x EBITDA reasonable?
Thanks for reading and commenting Mark. '21 EBITDA of ~$250m does not include the one-off gain from the customer settlement. FY21 is based on growth in the two underlying segments while holding margins in line with FY18-20 levels; overall FY21F EBITDA is +24% given growth in volumes and ISP price increases passed through vs. FY20, and FY22F is +7% on FY21F.
Historically this has been viewed as a frac sand business and traded at 9x through the cycle, so I think the ISP segment with good margins and pricing power as evidenced this year should trade above that. 10x -12x doesn't seem unreasonable given ISP growth outlook, pricing increases & essential end uses and SLCA's leading position within this.
In any event, I only assume a 9x for the business overall in line with its historic (and frac-skewed) trend.
Where do they get the sand? Do they own mines? How long will the mines produce and where are they?
Hi Ray, pp. 28-41 of the 10-K addresses all of this in some detail but in short they own their own mines, with proven and probable mineral reserves of 568 million tons - https://ussilica.gcs-web.com/static-files/09f3f6b1-3ae6-4a58-bf08-49cfb8c5f628
Thanks for the interesting article. does your 21 EBITDA include the one off gains from customer payments of $47 mn? Does it make sense to include it? Does that mean you anticipate around 30% EBITDA growth in 22? What multiple do you think their isp business would trade on if they didn't own the frac sands business? Is 10-12x EBITDA reasonable?
Thanks for reading and commenting Mark. '21 EBITDA of ~$250m does not include the one-off gain from the customer settlement. FY21 is based on growth in the two underlying segments while holding margins in line with FY18-20 levels; overall FY21F EBITDA is +24% given growth in volumes and ISP price increases passed through vs. FY20, and FY22F is +7% on FY21F.
Historically this has been viewed as a frac sand business and traded at 9x through the cycle, so I think the ISP segment with good margins and pricing power as evidenced this year should trade above that. 10x -12x doesn't seem unreasonable given ISP growth outlook, pricing increases & essential end uses and SLCA's leading position within this.
In any event, I only assume a 9x for the business overall in line with its historic (and frac-skewed) trend.