ASX:TER

Stock Analysis Report

Executive Summary

TerraCom Limited engages in the exploration, extraction, and production of coal in Australia and Mongolia.


Snowflake Analysis

Unattractive dividend payer with imperfect balance sheet.


Similar Companies

Share Price & News

How has TerraCom's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TER's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

TER

0.4%

AU Oil and Gas

0.7%

AU Market


1 Year Return

-56.7%

TER

-8.8%

AU Oil and Gas

15.5%

AU Market

Return vs Industry: TER underperformed the Australian Oil and Gas industry which returned -8.8% over the past year.

Return vs Market: TER underperformed the Australian Market which returned 15.5% over the past year.


Shareholder returns

TERIndustryMarket
7 Day0%0.4%0.7%
30 Day-14.1%-7.8%0.8%
90 Day-25.7%-2.8%6.1%
1 Year-55.7%-56.7%-5.0%-8.8%20.6%15.5%
3 Year-19.6%-21.4%12.4%0.9%38.1%19.7%
5 Year-19.6%-21.4%6.3%-11.0%51.8%17.9%

Price Volatility Vs. Market

How volatile is TerraCom's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TerraCom undervalued compared to its fair value and its price relative to the market?

7.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TER (A$0.28) is trading below our estimate of fair value (A$0.3)

Significantly Below Fair Value: TER is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: TER is unprofitable, so we can't compare its PE Ratio to the Oil and Gas industry average.

PE vs Market: TER is unprofitable, so we can't compare its PE Ratio to the Australian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate TER's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: TER is overvalued based on its PB Ratio (1.9x) compared to the AU Oil and Gas industry average (1.2x).


Next Steps

Future Growth

How is TerraCom forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

13.2%

Forecasted Energy industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as TerraCom has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has TerraCom performed over the past 5 years?

50.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TER is currently unprofitable.

Growing Profit Margin: TER is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: TER is unprofitable, but has reduced losses over the past 5 years at a rate of 50.1% per year.

Accelerating Growth: Unable to compare TER's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: TER is unprofitable, making it difficult to compare its past year earnings growth to the Oil and Gas industry (16.4%).


Return on Equity

High ROE: TER has a negative Return on Equity (-16.05%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is TerraCom's financial position?


Financial Position Analysis

Short Term Liabilities: TER's short term assets (A$93.0M) do not cover its short term liabilities (A$119.7M).

Long Term Liabilities: TER's short term assets (A$93.0M) do not cover its long term liabilities (A$302.2M).


Debt to Equity History and Analysis

Debt Level: TER's debt to equity ratio (313.2%) is considered high.

Reducing Debt: TER's debt to equity ratio has increased from 221% to 313.2% over the past 5 years.


Balance Sheet

Inventory Level: TER has a high level of physical assets or inventory.

Debt Coverage by Assets: TER's debt is not covered by short term assets (assets are 0.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable TER has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: TER is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 39% per year.


Next Steps

Dividend

What is TerraCom's current dividend yield, its reliability and sustainability?

7.27%

Current Dividend Yield


Dividend Yield vs Market

company7.3%marketbottom25%2.3%markettop25%5.4%industryaverage4.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: TER's dividend (7.27%) is higher than the bottom 25% of dividend payers in the Australian market (2.3%).

High Dividend: TER's dividend (7.27%) is in the top 25% of dividend payers in the Australian market (5.35%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether TER's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if TER's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.2yrs

Average management tenure


CEO

Danny McCarthy 0

1.2yrs

Tenure

AU$761,383

Compensation

Mr. Danny McCarthy is Chief Executive Officer at TerraCom Limited since December 1, 2018. Mr. McCarthy was Chief Operating Officer of Mineral Resources Limited since April 24, 2016 until November 30, 2018. ...


CEO Compensation Analysis

Compensation vs Market: Danny's total compensation ($USD503.46K) is above average for companies of similar size in the Australian market ($USD253.04K).

Compensation vs Earnings: Insufficient data to compare Danny's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Danny McCarthy
Chief Executive Officer1.2yrsAU$761.38kno data
Nathan Boom
Chief Financial Officer2.9yrsAU$560.36kno data
Megan Etcell
Company Secretary0.3yrsno datano data
Reece Henry
Exploration Manager - Mongolia0yrsno datano data

1.2yrs

Average Tenure

Experienced Management: TER's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Wallace King
Independent Non-Executive Chairman of the Board2.4yrsAU$272.21k0.37% A$508.9k
James Soorley
Independent Non-Executive Director2.9yrsAU$126.91k0.14% A$187.9k
Matthew Hunter
Non-Executive Director2.1yrsAU$63.16k0.32% A$437.9k
Glen Lewis
Independent Non-Executive Director0.2yrsno data0.034% A$46.3k
Tsogt Togoo
Independent Non­-Executive Director7yrsAU$138.90kno data
Craig Wallace
Independent Non-Executive Deputy Chairman3.7yrsAU$126.91k0.0020% A$2.8k
Paul Anderson
Non-Executive Director1.8yrsAU$63.16k0.0048% A$6.6k

2.4yrs

Average Tenure

Experienced Board: TER's board of directors are not considered experienced ( 2.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: TER insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.8%.


Top Shareholders

Company Information

TerraCom Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TerraCom Limited
  • Ticker: TER
  • Exchange: ASX
  • Founded: 2009
  • Industry: Coal and Consumable Fuels
  • Sector: Energy
  • Market Cap: AU$137.972m
  • Shares outstanding: 501.72m
  • Website: https://www.terracomresources.com

Location

  • TerraCom Limited
  • Blair Athol Mine Access Road
  • PO Box 131
  • Clermont
  • Queensland
  • 4721
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TERASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJul 2010
2GFDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2010
TERCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJul 2010

Biography

TerraCom Limited engages in the exploration, extraction, and production of coal in Australia and Mongolia. It explores for hard coking, thermal, and PCI coal. The company primarily focuses on the Northern Galilee project comprising the Hughenden and the Pentland projects covering an area of approximately 2,160 square kilometers, as well as the Clyde Park project that covers an area of approximately 133 square kilometers located in the Galilee Basin, Queensland; and the Springsure project covering an area of approximately 1,178 square kilometers situated in the Central-Western Bowen basin coal mining district, Queensland. The company was formerly known as Guildford Coal Limited and changed its name to TerraCom Limited in November 2015. TerraCom Limited was founded in 2009 and is based in Clermont, Australia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 10:40
End of Day Share Price2020/02/20 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.