Coking coal price chart - https://ca.investing.com/commodities/coking-coal-futures Near a multi year high. When you factor in all the current events that are bullish for the price, this is a perfect storm for any company in this sector.
Here are three important factors that will significantly increase the value of CAF: 1) Sales. As reported in their last MD&A, sales are lower than usual apparently, but prices are much higher. However, the next quarters coming up will show increased sales. From the MD&A: For the 9-month period ended July 31, 2017, the Corporation reported a net income of $595,716 (C$741,080) compared to a net loss of $315,919 for same period the previous year. The increase in net income was directly related to an increase in sales during the period, as well as improved profit margins generated from efficiencies generated from Quantum s new calcining facility, which only started fully operating in August 2016. Revenue increased to $8,443,667, in comparison to $2,907,198, for the same period last year. The significant increase in sales is due to a combination of unusually low sales during the last fiscal period combined with increased prices per sales unit. The Corporation expects to report a slight increase in Sales during Q4 and expects fiscal year end 2018 to reflect increased demand as the Corporation hopes to bring on a new customer. 2) Price of Anthracite(coking coal) for steel manufacturing. This is important as increased sales and higher commodity prices go hand and hand. From the chart below, coking coal is near multi year high's. Problem with the chart is it's general coking coal pricing and not showing the premium CAF gets for it's Anthracite coal, which is rarer and more valuable. https://ca.investing.com/commodities/coking-coal-futures 3) Rand/USD/CAD Exchange rate. There are many public companies that have good sales, but the exchange rate can either make of break them. In our case, the Rand is getting stronger as a new pro business leader is sworn in and Jacob Zuma leaves. But not only that, the CAD is getting weaker at the same time. This means that once Canaf converts their Rand into USD, then it must be converted into CAD to reflect it's proper value on the TSX Venture, thus giving us an additional premium. The rand is still near a 2 year high versus the USD. http://www.xe.com/currencycharts/?from=USD&to=ZAR&view=2Y
South African Rand Hits 3 Year High After Zuma Resigns http://uk.businessinsider.com/south-africa-rand-soars-after-jacob-zuma-resigns-2018-2 Remember, the stronger the Rand, the more CAF profits convert into USD. Plus the new leadership is pro business and will make the economy stronger.
Canaf terminates B-BBEE agreement with Elkhat 2018-02-21 14:13 MT - News Release Mr. Christopher Way reports Canaf announces termination of B-BBEE Agreement for South African Subsidiary Canaf Group Inc. has terminated the agreement to sell 30 per cent of its subsidiary to Elkhat Pty. Ltd., as part of its Broad-Based Black Economic Empowerment, transaction. Further to the announcement on Jan. 29, 2018, the company advises that a letter of termination has been issued to Elkhat Pty. Ltd., after the parties failed to agree final terms of the transaction. The company remains confident that it will complete its B-BBEE transaction for its South African subsidiary, Southern Coal Pty. Ltd., with a new partner, which has already been identified. The terms of any new agreement will remain the same in principal and the company expects the new transaction to close by May 18, 2018. Christopher Way, chief executive officer of Canaf, states, "Despite Elkhat and the company not being able to agree on final terms of the transaction, the company remains confident that it will achieve its B-BBEE goals during the current fiscal year and we remain optimistic of the opportunities that will arise from such a transaction." About Canaf Group Inc. Canaf is a public company listed on the TSX Venture Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high-carbon, devolatized anthracite. We seek Safe Harbor. © 2018 Canjex Publishing Ltd. All rights reserved.
Canaf Group earns $541,808 (U.S.) in fiscal 2017 2018-02-23 13:13 MT - News Release Mr. Christopher Way reports CANAF ANNOUNCES FINANCIAL RESULTS FOR YEAR ENDED 31 OCTOBER 2017 Canaf Group Inc. has released its financial statements and management's discussion and analysis for the year ended Oct. 31 2017. For the year, revenue increased to $10,669,117 (U.S.) from $4,703,528 (U.S.) the previous year, and the corporation recorded a net profit of $541,808 (U.S.) in comparison with a loss of $179,155 (U.S.) the previous year. EBITDA (earnings before interest, taxes, depreciation and amortization) for the year was recorded at $1,213,806 (U.S.) or approximately $1,557,269 (Canadian). The corporation is extremely pleased with the promising results, which demonstrate a clear increase in demand for its calcine product, which is expected to remain throughout the current fiscal year ending Oct. 31, 2018. Christopher Way, chief executive officer, stated: "The annual results reflect a significant turnaround in comparison to a depressed previous year, and position the company well for the current year, during which we plan to complete our broad-based black empowerment program, further improve on making efficiencies in the business, and also looking at potential investment opportunities in southern Africa." For more details and discussion on the results, the financial statements and management discussion and analysis can be viewed on SEDAR or on the company's website. About Canaf Group Inc. Canaf is a public company listed on the TSX Venture Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African-based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high-carbon, devolatized anthracite. We seek Safe Harbor. © 2018 Canjex Publishing Ltd. All rights reserved.
CAF made $190K net income in Q4 except there was a $244K tax expense for the year, plus $40K bank loan interest. On top of that, CAF was able to pay $300K of the $400K bank loan they had. This was used to buy new equipment in 2014. Impressive that they were able to put down $540K US and pay off $1.15 of the $1.25 million USD borrow(with interest) and not diluting the stock by raising funds. Plus keep in mind that 2015-2016 were not very good years either. This stock deserves much more credit. November 18, 2014, Vancouver, British Columbia - Canaf Group Inc. (TSXV: CAF) ("Canaf") the Canadaregistered mining group, is pleased to announce agreed terms for the acquisition of a new processing plant worth R20 million (South African Rand) for its South African owned coal beneficiating operation, Quantum Screening and Crushing (Pty) Ltd., (“Quantum”). The new anthracite beneficiating facility, (“Calciner 3”) will be installed and commissioned at its operation near Newcastle, KwaZulu Natal, South Africa. Calciner 3 is being purchased from a South African company specialising in furnace technologies. In May 2014 Quantum ran a successful trial of material through Calciner 3, and as a result Quantum signed a deal earlier this month to acquire the asset, subject to financing. Payment terms for the Acquisition and Loan Facility The value of the acquisition is R20 million (approximately US$1.8million). During November 2014, the Company paid a deposit of R6 million (approximately US$0.54million) from cash and working capital. The balance of the acquisition will be paid by a loan facility of R14million (approximately US$1.25million), which will be provided in payments as and when Quantum requires it, and borrowed over a period of 48 months, however it is the intention of the Company to pay down the loan within 24 months. The loan facility will be provided by Quantum’s existing bank, ABSA Business Bank, South Africa. In addition to the payments for the acquisition, the Company expects to invest approximately R2 million (US$0.18million) in civil and electrical infrastructure for the new facility; this investment will come from working capital. Motivation for New Calciner 3 The purchase of Calciner 3 is not only due to an expected increase in demand for Quantum’s product looking forward to 2015, but the new plant will also be environmentally compliant and significantly more efficient. Increased demand is expected to come from the newly refurbished ArcelorMittal Newcastle steel facility as well as an expected new contract during the course of 2015. Calciner 3 will produce the same product as Quantum’s existing two plants, however, the design is far more environmentally beneficial and does not use electricity as its source of heat. This new, autogenous (selfsustaining) calciner will offer the following benefits to the Company, which include: 1. Reduction of electricity consumption by 95% for each tonne of calcine product produced. 2. Increase of current capacity of Quantum by up to 60%. 3. Significant environmental improvements compared to Quantum’s existing calciners. The Company plans to commission the new facility, Calciner 3, in May 2015. Subsequent to this, the Company plans to then convert Quantum’s existing two calciners to a similar design as Calciner 3; this will be scheduled in a way that will safeguard sales to existing customers and is expected to commence during the fiscal year 2015- 2016.
CAF.V(Canaf Group Inc.) Year End Results. Financials + MD&A Ending October 31st 2017, Released February 23rd 2018 Note – Q1 2018 Results Will Be Released End Of March 2018 All Information Below Can Be Found On SEDAR Price: $0.09 Common Shares: 47,426,195 Warrants/Options: 0 Website: www.canafgroup.com Financials (ALL IN US DOLLARS) ASSETS Cash: $453,609 Trade Receivables: $1,314,828 Sales Tax Receivable: $357 Inventories: $472,221 Prepaid Expenses: $36,220 Property, Plant & Equipment: $1,037,996 Intangible: $1 Total Assets: $3,315,323 LIABILTIES Trade Payables: $757,875 Sales Tax Payable: $32,010 Income Tax Payable: $77,805 Current Portion Of Bank Loan: $310,819 Remaining Bank Loan: $106,063 Deferred Tax Liability: $122,022 Total Liabilities: $1,406,594 Asset/Debt Ratio: 2.36:1 Revenue Sales: $10,699,117 Cost: $9,476,007 Gross Profit: $1,223,110 G&A Expense: $417,951 Bank Interest: $86,837 Total Expenses: $504,788 Income: $718,322 Interest Income: $17,962 Income Tax Expense: $194,476 Net Income: $541,808 Foreign Currency Loss: $439,664 Converted From USD to CAD $439,664 X 1.25 = $549,580 CAD Earnings Per Share: $549,580 / 47,426,195 = $0.012 cents MD&A Highlights OVERALL PERFORMANCE AND OUTLOOK The outlook and profitability for the coming year remains strong and the Corporation expects to continue to generate positive free cash flow during the fiscal year-end 2018 and, as it accumulates cash and reduces its gearing and increases its efficiencies, will continue to look at investment in related business opportunities in South Africa; a country which many now regard as one with a very positive outlook for 2018 following its recent change of President. The fiscal year ended 31 October 2017 saw the Corporation recover from significantly reduced sales between mid-2015 to mid-2016, when depressed global commodity prices affected the Corporation’s customers negatively, which was reflected in one customer closing down for 7 months of the year and another reducing demand by 50% Revenue for the year ended October 31, 2017 was $10,669,117 (2016 $4,703,528) a $5,965,589 127% increase, and the Corporation returned to profitability with net comprehensive income for year ended October 31, 2017 of $439,664 (2016 net comprehensive loss $162,065) a $601,729 favourable variance. The results reflect the previously reported turnaround from increased demand with sales remaining strong. During 2016, the Corporation commissioned a new, and more efficient, calcining facility, which began to produce saleable product during Q2, 2016. The new facility reduced operating costs and improved margins and profits as demand also increased. Management believes it is in a stronger position with Quantum being one of a few suppliers of a low volatile reductant, a situation, which has allowed the Corporation to emerge as a dominant player in South Africa Operations generated $587,509 in cash during the year ended October 31, 2017 (2016 used $11,722) as the Corporation recovered from 8 months of depressed sales and demand for their product, which started in Q3, 2015. The bank loan bears interest at 10.25% per annum, matures on January 7, 2019, and is secured by the Company’s furnace acquired with the proceeds from the loan. The bank loan is repayable in blended monthly payments of Rand 391,624 ($27,690 translated at October 31, 2017 exchange rate). During the year ended October 31, 2017, the Company incurred interest expense totaling $86,837 (2016 – $71,721). UPDATE ON UGANDAN CLAIM AGAINST KILEMBE MINES LIMITED In August 2006, Canaf, then known as Uganda Gold Mining, announced the termination of any further investment into its Kilembe Copper-Cobalt Project in Uganda. Since 2007, the Corporation has been engaged in an Arbitration with Kilembe Mines Limited, (“KML”), whereby the Corporation seeks general damages, special damages and costs of the Arbitration from KML for breach of contract. The legal work, carried out my MMAKS Advocates, Kampala, against KML is at no cost to the Corporation, but any award in favor of the Corporation will be distributed to both MMAKS and Canaf. Despite the fact that the claim against KML Corporation remains active, the Corporation is unable to give an indication of either the quantum or any likely date by which the Arbitration will be concluded.
CAF 10 Year Performance Chart Year Revenue($USD) Profit/Loss $USD) Assets ($USD) Liabilities ($USD) Asset/Debt Ratio 52 Week High - Low 2007 $6,193,884 -721,465.00 $7,203,120 $4,822,980 1.493499869 $0.38 - $0.08 2008 $9,038,397 -2,639,324.00 $3,134,842 $3,336,654 0.939516654 $0.16 - $0.02 2009 $4,561,417 -539,609.00 $3,270,899 $3,239,579 1.009667923 $0.07 - $0.02 2010 $11,807,383 551,552.00 $3,734,633 $3,006,923 1.242011518 $0.09 - $0.02 2011 $13,336,725 574,766.00 $3,704,897 $2,673,936 1.38555934 $0.14 - $0.06 2012 $10,882,074 $126,169 $4,029,063 $2,871,933 1.402909817 $0.10 - $0.05 2013 $14,969,633 $557,797 $4,141,224 $2,426,297 1.71 $0.09 - $0.05 2014 $13,257,224 $201,330 $3,597,561 $1,681,304 2.14 $0.10 - $0.07 2015 $9,156,927 -$285,218 $3,512,225 $1,881,186 1.87 $0.08 - $0.04 2016 $4,703,528 -$162,065 $2,729,318 $1,260,344 2.17 $0.06 - $0.04 2017 $10,699,117 $439,664 $3,315,232 $1,406,594 2.36 $0.11 - $0.05 Notes 1) 2008: The company wrote off it's Uganda investment, taking a major asset hit 2) 2012: Drop in revenue was caused by A) Customer Issues 2) SA National Strikes 3) Rand Devaluation 3) 2013: Certain write downs and one main customer down for 4 months reduced net income 4) 2015: Production issues, strong USD and weaker Rand. CAF bank loan dropped stock price 5) 2016: Sales down from new plant being installed. Q4 2016 marked turnaround 6) 2017: Losses from 2015-2016 recovered, strongest asset/debt ratio in a decade 6a) Rand & Coking Coal prices at multi year high. Bank debt nearly paid off. Stock price still inexpensive
Here are some recent articles over the last two weeks in regards to Anthracite Coal. 1) http://triblive.com/state/pennsylvania/13369159-74/coal-production-seesawing Note: The United States is the second largest coal producer in the world and Anthracite barely makes up any of it's production. Key Lines: Weekly anthracite production fell by about 2,000 tons to 38,000 tons and is about 11.1 percent behind the 2017 year-to-date total. National coal production in 2018 is about 6.8 percent behind 2017 production. 2) https://www.workboat.com/blogs/maritime-matters/can-coal-exports-fill-void/ Key lines: A curious example is the shipment of 700,000 tons of steam coal from Pennsylvania and West Virginia to Ukraine to displace Russian coal imports. Half of the tonnage, 350,000, will be anthracite coal that originated in central Pennsylvania in the heart of old hard coal country. There is some optimism in the coal sector that increased exports will take up some of the slack from the domestic markets. However, as long as the U.S. is a swing export coal supplier, expect the continuation of the ups and downs in the export market characterized by relatively short-term contracts and small volumes cited in the aforementioned deals.Until the U.S. can be a low cost producer and shipper, export coal will not become a sustaining sector to supplement the permanent loss of domestic coal. 3) https://www.platts.com/latest-news/coal/kiev/ukraines-coal-stocks-at-power-plants-down-26-26898427 Key Lines: Reserves of anthracite at power plants dropped 8.9% to 601,100 mt, while stocks of thermal coal rose 1.4% to 866,700 mt. 4) https://www.kyivpost.com/article/op...s-reinforce-ukraines-energy-independence.html Key Lines: Many of the coal mines in the Donbass are now under defacto Russian military occupation, which creates legal and ethical obstacles to the use of this coal. As a result, Ukraine’s has resorted to importing anthracite coal from the United States and South Africa; but, this is an expensive option for a country currently surviving on a financial lifeline from the International Monetary Fund 5) https://economics.unian.info/100132...al-deal-warmed-ukraine-s-ties-with-trump.html Key Lines: Along with South Africa, Ukrainian-owned mines in Russia have been the main source of anthracite imports but this is fraught with uncertainty. In the past Moscow has cut off gas supplies to the country over disputes with Kyiv, while the Ukrainian government considered forbidding anthracite imports from Russia in 2017 although no ban has yet been imposed. Overall anthracite imports shot up to 3.05 million tonnes in the first 11 months of 2017 from just 0.05 million in all of 2013 - the year before the rebellion erupted.
CAF still going up. Q1 2018 results are next week and level II is getting thin: 1 / 8,000 0.10 -- 0.125 111,000 / 3 1 / 50,000 0.095 -- 0.13 120,000 / 3 1 / 27,000 0.09 -- 0.15 14,000 / 2 0 / 10,000 0.085 -- 0.175 20,000 / 1 1 / 4,000 0.075 -- 0.18 31,000 / 1 2 / 12,000 0.07 --- -- -- 2 / 110,000 0.065 --- -- -- 0 / 20,000 0.06 --- -- -- 1 / 100,000 0.01 --- -- --
Canaf Group earns $552,815 (U.S.) in Q1 2018 2018-03-28 14:49 MT - News Release CANAF ANNOUNCES FINANCIAL RESULTS FOR Q1 2018 Canaf Group Inc. has released its financial statements, and management discussion and analysis for the three-month period ended Jan. 31, 2018. The corporation is very pleased to confirm continued positive results for the quarter, which demonstrate the continued strong performance of the corporation's South African businesses. Revenue for the quarter increased to $3,273,213 (U.S.); an increase of 9.4 per cent compared with the same quarter last fiscal year, and up 45 per cent from the previous quarter ended Oct. 31, 2017. During the quarter, the corporation recorded a net comprehensive income of $552,815 (U.S.) (2017 $198,221 (U.S.)) and adjusted earnings before interest, taxes, depreciation and amortization of $238,961 (U.S.) (2017 $569,300 (U.S.)). The corporation expects demand to further increase for Q2, 2018, as demand for Quantum's product remains strong in South Africa. For more details and discussion on the results, the financial statements and management discussion and analysis can be viewed on SEDAR or on the company website. About Canaf Group Inc. Canaf is a public company listed on the TSX Venture Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African-based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high-carbon, devolatized anthracite. We seek Safe Harbor. © 2018 Canjex Publishing Ltd. All rights reserved.
Canaf Group Inc Q1 2018 Financial Results + Management Highlights (All Information Taken From SEDAR) Price: $0.095 Common Shares: 47,426,195 Options/Warrants: Nil Insider Holdings: 15,391,328 or 32.5% as per www.Sedi.ca Website: www.canafgroup.com Financials (All in US Dollars – Should Be Converted into CDN Dollars for accurate value) ASSETS Cash: $394,520 Trade Receivables: $2,678,248 Sales Tax Receivable: $17,942 Inventories: $895,361 Prepaid Expenses: $31,114 Property & Equipment: $1,172,010 Intangible: $1 Total Assets: $5,189,196 USD LIABILITIES Trade & Other Payables: $2,211,185 Income Tax Payable: $119,979 Current Portion Of Bank Loan: $310,819 Remaining Portion Of Bank Loan: $85,760 Total Liabilities: $2,727,743 Asset/Debt Ratio: 1.9:1 Q1 2018 Sales Revenue: $3,273,213 Quarterly Net Income: 552,815 USD - $707,440 CAD Q1-Q4 2017 Sales Revenue: $10,699,117 Yearly Net Income: $439,664 USD - $562,640 CAD *Note : Canaf Group is currently on track to have a record profit year, already exceeding net income from 2017. $475,000 CAD is equivalent to $0.01 cent earnings. Most profitable junior companies trade in a 8-12 multiple range, making Canaf group undervalued based on the last five quarters. Management Discussion Highlights From Q1 2018 OVERALL PERFORMANCE AND OUTLOOK The results above shows the sale recovery and demand of the Corporation’s product which started in Q3, 2016. Sales for the three month period ended January 31, 2018 increased by 45% in comparison to the previous quarter and is expected to increase by a further 40% in Q2, as more confidence returns to the markets. (Page 5) The outlook and profitability of the Corporation remains strong and the Corporation expects to continue to generate positive free cash flow during the fiscal year-end 2018 and, as it accumulates cash and reduces its gearing and increases its efficiencies, will continue to look at investment in related business opportunities in South Africa, a country which many now regard with a very positive outlook The three month period ended 31 January 2018 saw the Corporation continue to recover from significantly reduced sales between mid-2015 to mid-2016, when depressed global commodity prices affected the Corporation’s customers negatively. Revenue for the three month period was $3,273,213 (2017 - $2,991,706) a $281,507, 9% increase, and the Corporation returned to profitability with net comprehensive income for three month period ended January 31, 2018 of $552,815 (2017 - $198,221) a $354,594, 179% favourable variance. The results reflect the previously reported turnaround from increased demand with sales remaining strong. During the quarter, Southern Coal experienced a further increase in demand from its customers, in comparison to that of Q4, 2017 and the Corporation can confirm that Q2, 2018 will reflect a further increase to Southern Coal’s maximum capacity. The Corporation also remains focused on completing a Broad-Based Black Economic Empowerment (“B-BBEE”) transaction for Southern Coal, by mid-June 2018. The B-BBEE is a form of economic empowerment initiated by the South African government with the goal to distribute wealth across as broad a spectrum of previously disadvantaged South African society as possible. A new partner has been identified and initial terms of the agreement, which will remain much the same as the previously agreed transaction, will most probably be announced by the end of April 2018. The Corporation remains confident that it will achieve its B-BBEE goals during the current fiscal year and we remain optimistic of the opportunities that will arise from such a transaction. The Corporation reported net income o f $187,126 (2017 - $197,691) a $10,565 unfavourable variance of over the previous period. The reduction in GM and profit are due to increased feedstock costs in Q1 and a one month delay in the corresponding sale price increase, a general increase in maintenance cost and investment into B-BBEE training projects in Q1 which represent approximately 75% of the projected annual spend for B-BBEE The Corporation has an agreement to lease premises for its coal processing plant in South Africa for a term of ten years, expiring on December 31, 2020. The agreement offers the Corporation, in lieu of rent, feedstock coal to be delivered to its adjacent premises, which it purchases at market price. Should the Corporation decide to purchase feedstock coal from an alternative supplier which the lessor is otherwise able to provide, then a monthly rent of Rand 200,000 ($16,819) is payable. To date, the Corporation has not been required to pay any rent for the premises as it has continued to purchase feedstock coal from the landlord. The bank loan bears interest at 10.25% per annum, matures on January 7, 2019, and is secured by the Company’s furnace acquired with the proceeds from the loan. The bank loan is repayable in blended monthly payments of Rand 391,624 ($32,934 translated at January 31, 2018 exchange rate)). During the three month period ended January 31, 2018, the Company incurred interest expense totaling $Nil (January 31, 2017 – $15,322).
Looks as if the CEO of CAF has already established himself in South Africa's realm of black empowerment. He started a company a few years ago called Sewa Coti, as per his LinkedIn: Sewa Coti is an African-focused consultancy specialising in due diligence, project management, strategy, as well as B-BBEE legislation in South Africa. So what that tells me is that with pretty much 100% certainty we will get a deal done, established Canaf with government contracts and shouldn't have any issue diversifying. This guy is smart, he has paved the road to growing this company far beyond where it's currently at. From CAF's last MD&A: The Corporation also remains focused on completing a Broad-Based Black Economic Empowerment (“B-BBEE”) transaction for Southern Coal, by mid-June 2018. The B-BBEE is a form of economic empowerment initiated by the South African government with the goal to distribute wealth across as broad a spectrum of previously disadvantaged South African society as possible. A new partner has been identified and initial terms of the agreement, which will remain much the same as the previously agreed transaction, will most probably be announced by the end of April 2018. The Corporation remains confident that it will achieve its B-BBEE goals during the current fiscal year and we remain optimistic of the opportunities that will arise from such a transaction.
Newest article on CAF. Won't matter because in 6 business days or sooner we will see Q2 results. 40% revenue increase, stronger South African Rand/US Conversion, High coking coal prices, decreased expenses based on what was stated in Q1 MD&A, the combination should generate a much larger overall profit for the second quarter. I am estimating between $750-800K USD. Keep in mind that $473K CAD is $0.01c earnings, so after 6 months if we earn over $1 million USD, stock fair value is around $0.30 based on a 10X multiple. https://simplywall.st/stocks/ca/mat...financially-strong-is-canaf-group-inc-cvecaf/ Autumn Haas June 22, 2018 While small-cap stocks, such as Canaf Group Inc (CVE:CAF) with its market cap of CA$5.45m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. So, understanding the company’s financial health becomes vital, since poor capital management may bring about bankruptcies, which occur at a higher rate for small-caps. Here are few basic financial health checks you should consider before taking the plunge. However, since I only look at basic financial figures, I recommend you dig deeper yourself into CAF here. Does CAF produce enough cash relative to debt? CAF has shrunken its total debt levels in the last twelve months, from CA$702.23k to CA$416.88k , which is made up of current and long term debt. With this debt repayment, the current cash and short-term investment levels stands at CA$453.61k , ready to deploy into the business. Moreover, CAF has produced CA$587.51k in operating cash flow over the same time period, leading to an operating cash to total debt ratio of 140.93%, meaning that CAF’s current level of operating cash is high enough to cover debt. This ratio can also be interpreted as a measure of efficiency as an alternative to return on assets. In CAF’s case, it is able to generate 1.41x cash from its debt capital. Can CAF pay its short-term liabilities? At the current liabilities level of CA$1.18m liabilities, it appears that the company has maintained a safe level of current assets to meet its obligations, with the current ratio last standing at 1.93x. For Metals and Mining companies, this ratio is within a sensible range as there’s enough of a cash buffer without holding too capital in low return investments. TSXV:CAF Historical Debt June 21st 18 Does CAF face the risk of succumbing to its debt-load? With debt at 16.11% of equity, CAF may be thought of as appropriately levered. This range is considered safe as CAF is not taking on too much debt obligation, which may be constraining for future growth. We can test if CAF’s debt levels are sustainable by measuring interest payments against earnings of a company. Ideally, earnings before interest and tax (EBIT) should cover net interest by at least three times. For CAF, the ratio of 10.57x suggests that interest is comfortably covered, which means that debtors may be willing to loan the company more money, giving CAF ample headroom to grow its debt facilities. Next Steps: CAF has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at a safe level. In addition to this, the company exhibits proper management of current assets and upcoming liabilities. Keep in mind I haven’t considered other factors such as how CAF has been performing in the past. You should continue to research Canaf Group to get a better picture of the stock by looking at: Future Outlook: What are well-informed industry analysts predicting for CAF’s future growth? Take a look at our free research report of analyst consensus for CAF’s outlook. Historical Performance: What has CAF’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
Canaf Group earns $691,115 (U.S.) in six months 2018-06-28 14:56 ET - News Release Mr. Christopher Way reports CANAF ANNOUNCES FINANCIAL RESULTS FOR Q2 2018 Canaf Group Inc. has released its financial statements, and management discussion and analysis for the six-month period ended April 30, 2018. The corporation is pleased to confirm continued positive results for the period in line with expectations. Revenue for the six-month period ended April 30, 2018, increased to $8,698,426 (U.S.), an increase of 34 per cent compared with the same period last fiscal year, which generated a net comprehensive income of $691,115 (U.S.) (2017: $434,934 (U.S.)). For more details and discussion on the results, the financial statements and management discussion and analysis can be viewed on SEDAR or the company's website. About Canaf Group Inc. Canaf is a public company listed on the TSX Venture Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African-based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high-carbon, devolatized anthracite. We seek Safe Harbor. © 2018 Canjex Publishing Ltd. All rights reserved.
Canaf Group Inc.(CAF.V) Q2 2018 Results. Financials + MD&A All information can be found at www.sedar.com Price: $0.11 Common Shares: 47,426,195 Warrants/Options: 0 Website: www.canafgroup.com Financials (All In US Dollars) ASSETS Cash: $315,407 Trade Receivables: $3,604,555 Sales Tax Receivable: $3,091 Inventories: $418,389 Prepaid Expenses: $20,028 Property, Plant & Equipment: $953,801 Intangible: $1 Total Assets: $5,315,272 LIABILITIES Trade & Other Payables: $2,296,780 Sales Tax Payable: $17,689 Income Tax Payable: $129,439 Bank Loan(Due Jan 2019): $271,611 Total Liabilities: $2,715,519 Asset/Debt Ratio: 1.96:1 Six Month Performance(Q1 & Q2 2018) Sales: $8,698,426 Net Income: $691,115 USD Net Income for 2017(Q1-Q4): $541,808 USD Earnings per share in 2018: $691,115USD X 1.31 CAD(June 29th 2018) / 47,426,195 = $0.019 cents CAD Earnings per share over 6 quarters: $1,232,923 X 1.31 CAD /47,426,195 = $0.034 cent CAD MD&A Highlights Revenues for the six months were $8,698,426 (2017 - $6,482,459) a 34% increase, and the Corporation continues to be profitable with gross profits of $703,169 (2017 - $684,905) a 2.7% increase and net income for six month period ended April 30, 2018 of $449,880 (2017 - $429,652) a $20,288, 4.7% increase. While revenues and gross margin have grown, increased cost of sales produced smaller gross margin percentages, 2018 8.1% (2017 10.6%). The reduction in the gross margin is mainly due to a major maintenance project during the period. The Corporation expects to continue to operate profitably into Q3 and Q4, however Revenue is expected to drop, due to a reduction in demand caused primarily by one of Southern Coals main customers’ internal coke breeze coming back online. The outlook and profitability of the Corporation remains strong and the Corporation expects to continue to generate positive free cash flow during the fiscal year-end 2018 and, as it accumulates cash and reduces its gearing and increases its efficiencies, will continue to look at investment in related business opportunities in South Africa and neighbouring countries. The Corporation’s B-BBEE transaction for the sale of 30% of Quantum’s shares in Southern Coal remains on track to be completed during the current fiscal year. Following the termination of the initial agreement announced on 20 February 2018, a new B-BBEE partner has been identified and initial terms of the agreement, which will remain much the same as the previously agreed transaction, are expected to be announced during Q3. Sales from the Corporation’s South African coal processing business are substantially derived from two customers and as a result, the Corporation is economically dependent on these customers. The Corporation’s exposure to credit risk is limited to the carrying value of its accounts receivable. As at April 30, 2018, trade receivables of $3,604,555 (October 31, 2017, $1,314,828) were due from these customers and were collected subsequent to period-end. The bank loan bears interest at 10.25% per annum, matures on January 7, 2019, and is secured by the Corporation’s furnace acquired with the proceeds from the loan. The bank loan is repayable in blended monthly payments of Rand 391,624 ($32,359.89 translated at April 30, 2018 exchange rate)). During the six month period ended April 30, 2018, the Corporation incurred interest expense totaling $19,909 (April 30, 2017 – $29,658). Expenses for the six months were $304,980 (2017 - $237,288) an increase of $67,692, 29%, primarily due to increased costs relating to the B-BBEE program General administrative and finance expenses for the six month period were $285,071 (April 30, 2017 - $207,630) an unfavourable variance of $77,441, primarily due to increased involvement in South Africa’s B-BBEE program and increased activity resulting in higher management fees and office expenses. Additional detail of general and admin expenses can be found in the table below.
Canaf Group changes name to Canaf Investments 2018-07-03 18:11 MT - News Release Mr. Christopher Way reports CANAF GROUP INC. ANNOUNCES NAME CHANGE TO CANAF INVESTMENTS INC. Canaf Group Inc. will be changing its corporate name to Canaf Investments Inc., effective July 5, 2018. At the opening of trading on July 5, 2018, the common shares of the company will commence trading on the TSX Venture Exchange under the new name and Cusip No. 13682P102, and will continue trading under the same symbol CAF. Shareholders holding share certificates in the name of Canaf Group can request replacement certificates with the new corporate name, but new certificates are not required and will not be automatically issued. There will be no consolidation of capital in connection with the change of name. The change of name has been implemented to better represent the corporation and further meets the requirements of the corporation's new jurisdiction of British Columbia, which was approved in the last annual general meeting. About Canaf Group Inc. Canaf is a public company listed on the TSX Venture Exchange. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African-based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high-carbon, devolatized anthracite. We seek Safe Harbor. © 2018 Canjex Publishing Ltd. All rights reserved.
Canaf Group to sell 30% of unit for $1.7M 2018-07-06 10:44 MT - News Release Mr. Christopher Way reports CANAF ANNOUNCES B-BBEE TRANSACTION FOR SOUTH AFRICAN SUBSIDIARY Canaf Investments Inc., formerly known as Canaf Group Inc., has provided the terms of its new broad-based black economic empowerment (B-BBEE) transaction for its South African subsidiary, Southern Coal (Pty.) Ltd. As part of Southern Coal's continuing B-BBEE transformation program, Amandla Amakhulu (Pty) Ltd. (AAM), a 100-per-cent black, privately owned company incorporated in South Africa, has agreed to acquire 30 per cent of the issued shares of Southern Coal, from Canaf's wholly owned subsidiary, Quantum Screening and Crushing Pty. Ltd., for the value of 18 million South African rand (approximately $1.7-million (Canadian)). Quantum will in return receive cumulative, redeemable preference shares in AAM in the amount of the purchase price, 18 million rand (approximately $1.7-million (Canadian)). These preference shares shall provide preferential dividends, until redeemed by AAM. These dividends will be secured by an irrevocable direction from AAM to Southern Coal to pay Quantum such dividends from any distribution to AAM. The transaction will close by Aug. 31, 2018. Christopher Way, chief executive officer of Canaf, states: "The signing of this important agreement to sell 30 per cent of Quantum's shares in Southern Coal, confirms our intention to ensure that Southern Coal achieves the required B-BBEE level for the current financial year. We remain focused on securing new long-term contracts for the existing business and also continue to look at diversification opportunities in South Africa and its neighbours." In addition to this transaction, Southern Coal can confirm that it remains on track in ensuring that all other areas of its B-BBEE transformation plan, including its enterprise, socio-economic, skills, and supplier and development programs, are fully invested in, so to ensure that the company reaches its desired level. About Canaf Group Inc. Canaf's head office is in Vancouver, Canada, with subsidiary offices in the United Kingdom and South Africa. Canaf owns 100 per cent of Quantum Screening and Crushing Pty. Ltd., a South African-based company that owns 100 per cent of Southern Coal Pty. Ltd., a company that produces a high carbon, devolatized anthracite. As of July 3, 2018, Quantum agrees to sell 30 per cent of its shares in Southern Coal for the net consideration of 18 million rand; the transaction will close by Aug. 31, 2018. About Southern Coal Southern Coal produces calcined anthracite, a product used primarily as a substitute to coke in sintering processes. Southern Coal produces calcined anthracite by feeding washed anthracite coal through a rotary kiln, at temperatures between 900 and 1,100 C; the volatiles are driven off and the effective carbon content increased. Southern Coal's two largest clients are African leaders in steel and ferromanganese production. Southern Coal operates near Newcastle, KwaZulu-Natal, where Quantum's three kilns operate; the majority of Southern Coal's feedstock anthracite is supplied from local anthracite mines in KwaZulu-Natal. We seek Safe Harbor. © 2018 Canjex Publishing Ltd. All rights reserved.
