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Champion Iron Ltd. (AU:CIA)
ASX:CIA

Champion Iron (CIA) AI Stock Analysis

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AU

Champion Iron

(Sydney:CIA)

Rating:61Neutral
Price Target:
Champion Iron Ltd. is currently facing challenges with declining profitability and cash flow constraints, reflected in its financial performance score. The technical indicators suggest a bearish trend, with potential for being oversold, offering some rebound potential. The stock's valuation is reasonable, supported by a robust dividend yield. Despite recent operational disruptions, strategic initiatives and partnerships offer future growth opportunities. However, high operating costs and increased leverage pose risks.
Positive Factors
Financial Health
The company's cash balance increased by C$24 million due to record shipments, suggesting robust financial health.
Operational Performance
Shipments from Bloom Lake exceeded expectations for the second quarter in a row, indicating improved rail capacity and strong operational performance.
Project Management
The DRPF project remains on track for year-end completion, indicating good project management and future growth potential.
Negative Factors
Cash Balance
The cash balance declined by $91 million in the quarter, driven by working capital increases, capital spend on equipment and railcars, the dividend payment, and ongoing spending on the DRPF project.
Cost Estimates
Near-term cost estimates have been increased, negatively impacting FY25/26 EBITDA.
Realized Pricing
The financial results were impacted by a lower average realized price, an artifact of volatile iron ore prices and pressure on Chinese steel mills.

Champion Iron (CIA) vs. iShares MSCI Australia ETF (EWA)

Champion Iron Business Overview & Revenue Model

Company DescriptionChampion Iron Ltd. (CIA) is a mining company focused on the exploration, development, and production of iron ore deposits. The company operates primarily in Canada, with its flagship asset being the Bloom Lake Mine located in Quebec. Champion Iron is dedicated to providing high-grade iron ore to meet the global steel industry's demands, leveraging its strategic locations and advanced mining technologies to enhance productivity and sustainability.
How the Company Makes MoneyChampion Iron Ltd. makes money through the extraction, processing, and sale of iron ore. The company generates revenue by selling its high-grade iron ore concentrate to steel producers primarily in international markets, including Asia, Europe, and the Middle East. The company's revenue streams are highly dependent on the global demand for steel, as well as the prevailing market prices for iron ore. Champion Iron's operations benefit from its strategic location, which allows for efficient transportation of its products to key markets. Additionally, the company's investments in technology and operational efficiencies help reduce costs and improve profitability. Significant partnerships with logistics and transportation providers also play a crucial role in ensuring the timely delivery of iron ore to its customers, further solidifying its revenue model.

Champion Iron Earnings Call Summary

Earnings Call Date:May 28, 2025
(Q4-2025)
|
% Change Since: 4.71%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call presented a strong financial performance and considerable progress on strategic projects, underscoring a solid foundation for future growth. However, operational challenges such as ore hardness and market discounts pose short-term hurdles.
Q4-2025 Updates
Positive Updates
Record Sales in Challenging Conditions
Champion Iron Limited set a record by selling 3.5 million tonnes of concentrates despite challenging winter logistics.
Sustainability Achievements
Successfully met or exceeded 13 out of 14 sustainability targets for fiscal year 2025, including recycling 99% of water at Bloom Lake.
Positive Financial Performance
Generated $425 million in revenue, $130 million in EBITDA, and increased cash position by $24 million despite significant investments.
Strong Cash Generation and Dividend
Generated over $2.6 billion from operations since 2017, enabling $400 million returned to shareholders and a semiannual dividend of $0.10 per share.
Progress on Major Projects
72% of CapEx invested in DR grade transition with completion expected by end of calendar year; strong foundation for future cash flow generation.
Negative Updates
Ore Hardness Challenges
Faced grinding difficulties with harder ore at Bloom Lake, impacting throughput and increasing costs due to semiannual shutdowns.
Discounts on Spot Market Sales
Continued to experience price discounts for high-grade material in China due to lack of long-term contracts.
Increased Operating Costs
Operating costs rose to CAD 80 per tonne, influenced by semiannual shutdowns and lower production levels.
Impact of Rail Maintenance
Scheduled rail maintenance may affect the pace of destocking, potentially impacting operational efficiency.
Company Guidance
During the Champion Iron Limited Fourth Quarter Results Conference Call for Fiscal Year 2025, several key metrics and guidance details were provided. The company reported a production of approximately 3.2 million tonnes and a record sale of 3.5 million tonnes of concentrates, despite challenging winter logistics. Their ESG performance was highlighted by meeting or exceeding 13 out of 14 sustainability targets, including recycling 99% of water at Bloom Lake. Operationally, they faced grinding difficulties due to harder ore, but managed to destock their stockpile by 300,000 tonnes, reducing it to 2.6 million tonnes. Financially, the company achieved revenues of $425 million, EBITDA of $130 million, and earnings per share of $0.08, resulting in a positive cash position increase of $24 million. They declared a semiannual dividend of $0.10 per share, supported by a strong balance sheet with $1 billion in available liquidity. Looking forward, Champion Iron is focused on transitioning to DR-grade material, with 72% of the flotation plant CapEx already invested, and they aim to deliver the plant by the end of the calendar year. The company remains committed to maximizing production and reducing costs, with a strategic focus on high-grade DR material and exploring market opportunities beyond Asia, particularly in Europe, North Africa, and the Middle East.

Champion Iron Financial Statement Overview

Summary
Champion Iron Ltd. demonstrates strong operational efficiency with reasonable margins but faces challenges in revenue growth and cash flow generation. The balance sheet indicates increasing leverage, suggesting potential risks if profitability declines further. Overall, stability is evident but with concerns around cash flow and declining profitability.
Income Statement
73
Positive
The company shows a stable gross profit margin of 24.6% TTM, although it's slightly lower than the previous year. Net profit margin TTM is at 8.5%, reflecting profitability, but a significant decrease from the previous year. Revenue growth is slightly negative at -0.68% TTM, indicating a stagnation in sales. The EBIT margin stands at 19.2% TTM, and EBITDA margin at 27.0% TTM, suggesting good operational efficiency but declining from previous periods.
Balance Sheet
69
Positive
The debt-to-equity ratio is 0.58, indicating moderate leverage, which is manageable but has been increasing over time. ROE is 9.2% TTM, showing a reasonable return on equity, although declining. The equity ratio of 47.3% TTM indicates a balanced capital structure, though slightly decreased.
Cash Flow
45
Neutral
Free cash flow is negative TTM, showing a challenge in generating free cash after investments. The operating cash flow to net income ratio is 2.02 TTM, indicating strong cash flow generation relative to net income. However, the free cash flow to net income ratio is negative, highlighting cash constraints.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
1.51B1.52B1.40B1.46B1.28B785.09M
Gross Profit
373.08M629.76M451.28M958.20M817.76M363.72M
EBIT
291.05M429.21M371.31M873.33M774.06M326.54M
EBITDA
408.49M555.41M481.68M916.31M803.79M346.53M
Net Income Common Stockholders
128.70M234.19M200.71M522.59M464.43M89.43M
Balance SheetCash, Cash Equivalents and Short-Term Investments
93.10M400.06M327.12M352.67M636.52M298.65M
Total Assets
2.95B2.69B2.32B1.99B1.50B882.60M
Total Debt
808.28M616.41M562.12M377.34M216.85M278.86M
Net Debt
715.18M216.34M235.32M55.45M-392.46M-2.50M
Total Liabilities
1.55B1.29B1.05B827.53M643.89M505.98M
Stockholders Equity
1.40B1.40B1.26B1.16B853.02M376.62M
Cash FlowFree Cash Flow
-322.03M131.31M-58.68M-53.95M446.54M156.06M
Operating Cash Flow
260.11M474.58M235.98M470.44M623.48M309.57M
Investing Cash Flow
-590.82M-354.72M-249.86M-635.47M-244.14M-152.89M
Financing Cash Flow
23.82M-48.36M6.90M-118.14M-26.30M-14.89M

Champion Iron Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4.45
Price Trends
50DMA
4.52
Negative
100DMA
5.05
Negative
200DMA
5.49
Negative
Market Momentum
MACD
-0.08
Positive
RSI
50.01
Neutral
STOCH
43.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:CIA, the sentiment is Neutral. The current price of 4.45 is below the 20-day moving average (MA) of 4.47, below the 50-day MA of 4.52, and below the 200-day MA of 5.49, indicating a bearish trend. The MACD of -0.08 indicates Positive momentum. The RSI at 50.01 is Neutral, neither overbought nor oversold. The STOCH value of 43.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AU:CIA.

Champion Iron Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AUFMG
76
Outperform
$46.22B7.8120.21%9.16%-11.33%-32.11%
AURIO
74
Outperform
AU$154.31B10.2021.04%7.83%-0.10%15.50%
AUBHP
72
Outperform
$192.59B11.1526.20%5.08%-2.47%57.01%
AUCIA
61
Neutral
C$2.23B14.7310.03%5.13%-9.27%-56.88%
51
Neutral
$2.02B-1.12-21.36%3.65%2.87%-30.54%
AUMIN
50
Neutral
$3.94B50.78-33.95%4.54%2.22%-411.10%
AUMTM
32
Underperform
AU$195.85M-38.25%20.80%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:CIA
Champion Iron
4.45
-1.88
-29.70%
AU:BHP
BHP Group Ltd
37.98
-3.97
-9.47%
AU:MIN
Mineral Resources Limited
23.19
-46.16
-66.56%
AU:FMG
Fortescue Metals Group Ltd
15.49
-6.72
-30.27%
AU:RIO
Rio Tinto Limited
110.01
-7.93
-6.73%
AU:MTM
Mt Monger Resources Ltd.
0.50
0.46
1150.00%

Champion Iron Corporate Events

Champion Iron Ltd. Announces Director’s Interest Change
Apr 3, 2025

Champion Iron Ltd. announced a change in the director’s interest, with Ronald Hugh Beevor acquiring 19,378 deferred share units (DSUs) under the 2018 Omnibus Incentive Plan. This change reflects the company’s ongoing commitment to aligning the interests of its leadership with shareholder value, potentially impacting its governance and stakeholder trust positively.

Champion Iron Director Increases Stake with New DSUs
Apr 3, 2025

Champion Iron Ltd. announced a change in the director’s interest, with Jessica McDonald acquiring an additional 15,134 Deferred Share Units (DSUs) under the 2018 Omnibus Incentive Plan. This acquisition increases her total holdings to 47,260 DSUs, reflecting a strategic move to align director interests with company performance.

Champion Iron Announces Director’s Interest Change
Apr 3, 2025

Champion Iron Limited has announced a change in the director’s interest notice, specifically regarding Louise Grondin. The company, which operates in the iron ore industry, focuses on the exploration and development of iron ore deposits. The announcement details that Louise Grondin has acquired an additional 13,383 Deferred Share Units (DSUs) under the company’s 2018 Omnibus Incentive Plan, increasing her total holdings to 118,092 DSUs. This change reflects the company’s ongoing commitment to aligning director interests with shareholder value.

Champion Iron Ltd. Updates Director’s Interest with New DSU Acquisition
Apr 3, 2025

Champion Iron Ltd. has announced a change in the director’s interest notice, specifically regarding Michelle Cormier’s holdings. The change involves the acquisition of 16,060 Deferred Share Units (DSUs) under the company’s 2018 Omnibus Incentive Plan, increasing her total DSUs to 129,621. This adjustment reflects the company’s ongoing commitment to aligning its executive compensation with shareholder interests, potentially impacting stakeholder perceptions positively.

Champion Iron Ltd. Announces Director’s Interest Change
Apr 3, 2025

Champion Iron Ltd. has announced a change in the director’s interest notice, specifically involving Gary Lawler. On March 31, 2025, Lawler acquired 18,840 deferred share units (DSUs) under the company’s 2018 Omnibus Incentive Plan, valued at A$5.27 each. This change reflects the company’s ongoing commitment to aligning its leadership’s interests with its strategic goals, potentially impacting its market perception and shareholder confidence.

Champion Iron Issues Deferred Share Units for Employee Incentive
Apr 3, 2025

Champion Iron Ltd. announced the issuance of 82,795 deferred share units as part of an employee incentive scheme. These securities are unquoted and not intended for trading on the ASX, reflecting the company’s strategy to incentivize and retain its workforce, potentially impacting its operational efficiency and employee satisfaction.

Champion Iron Ltd. Announces Change in Substantial Holder Interests
Mar 3, 2025

Champion Iron Ltd. has announced a change in the interests of a substantial holder, with State Street Bank and Trust Company and its associates holding significant voting power in the company. This change reflects the dynamic nature of shareholder interests and could impact the company’s governance and decision-making processes, potentially influencing its market strategy and stakeholder relations.

Champion Iron Ltd. Director Increases Stake
Feb 27, 2025

Champion Iron Ltd. announced a change in the director’s interest, with Michael O’Keeffe acquiring an additional 100,000 ordinary shares, bringing his total to 6,851,900 shares. This acquisition, conducted through an on-market trade, reflects the director’s increased investment in the company, potentially signaling confidence in its future performance and stability, which could have positive implications for stakeholders.

Champion Iron Advances Strategic Projects Amid Stable Iron Ore Market
Feb 21, 2025

Champion Iron Ltd. reported its third-quarter results for fiscal year 2025, noting stable sales despite a brief equipment breakdown at Bloom Lake. The company achieved record monthly sales in November 2024 and plans to enhance railway capabilities with 400 new railcars. Significant progress has been made in its Kami Project through a partnership with Nippon Steel and Sojitz Corporation, securing a $245M investment for a 49% equity stake. Additionally, the Direct Reduction Pellet Feed Project at Bloom Lake is advancing, positioning Champion to enter new markets and support industry decarbonization goals. Global iron ore prices saw a slight rebound supported by Chinese economic measures, stabilizing around $100/dmt.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.