Q: Two questions - Could I have your take on SGML recent earnings please, and (2) HHL has diverged vigorously from its past consistent performance, presumably on the Trump policy on health care, appointees etc. I assume other sector participants will likewise take a hit but would appreciate your take on the matter. The issues affecting the sector appear to relate to policy, not politics.
5i Research Answer:
SGML EPS was -23c on revenue of $20.9M, missing consensus by a wide margin. Concentrate sold was 57,483 tonnes, up from 52, 572 last year. Greentech performed well in the quarter, up 22%. Cash costs remain good at $513/tonne, down from $515. EBITDA loss was $12.8M and EPS of -23c as noted missed estimates of +7c per share. The balance sheet remains clean with $88M cash. The sector continues to struggle, but analysts expect a strong recovery next with a 70c earnings per share consensus. We think the health sector is weak because of the appointment of RFK. Trump also is on a mission to lower drug prices, which of course would impact the industry. He also wants to make it easier to import drugs from Canada.