TerraCom Limited (TER) AI Stock Analysis

• Market Cap: AU$46.46M
• Dividend Yield: 17.24%
• Average Volume (3M): 2.69M
• Price to Earnings (P/E): 4.5
• Beta (1Y): 0.71
• Revenue Growth: -38.32%
• EPS Growth: -102.34%
• Country: AU
• Employees: 3,622
• Sector: Energy
• Sector Strength: 54
• Industry: Coal
• EPS (TTM): <0.01
• Shares Outstanding: 800,966,250
• 10 Day Avg. Volume: 3,275,470
• 30 Day Avg. Volume: 2,691,272
• PEG Ratio: -0.04
• Price to Book (P/B): 3.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.37
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 45 Neutral
• Price Target: AU$0.00 ▼(-100.00%Downside)

The overall stock score of TerraCom Limited is primarily influenced by its mixed financial performance, characterized by declining revenues and cash flow issues. The technical analysis suggests a neutral to bearish outlook, with the stock trading below major moving averages. The valuation is challenging due to negative earnings and the absence of a dividend yield. These factors collectively indicate significant risks and the need for strategic adjustments to improve financial health.

TerraCom Limited Business Overview & Revenue Model

Company Description

TerraCom Limited engages in the exploration and extraction of coal in Australia and South Africa. The company explores for hard and soft coking, thermal, and PCI coal. Its flagship property is the Blair Athol coal mine located in Clermont, Queensland. The company also holds interests in the Northern Galilee project comprising the Hughenden and the Pentland properties covering an area of approximately 2,160 square kilometers; 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 located in the Central-Western Bowen basin coal mining district, Queensland. In addition, it holds interests in the Kangala Colliery property; the New Clydesdale Colliery project; the Berenice project; the Ubuntu Colliery; the North Block Complex Colliery project; the Arnot South; the Cygnus project; and the Eloff project located in South Africa. 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.

How the Company Makes Money

TerraCom Limited generates revenue through the extraction and sale of coal, which is utilized for energy production and steel manufacturing. The company's revenue streams are primarily derived from the sale of thermal coal used in power generation and coking coal used in steel production. TerraCom capitalizes on its strategically located mining assets in Australia and Mongolia, allowing it to efficiently supply coal to markets in Asia and beyond. Additionally, the company may engage in joint ventures or partnerships to enhance its operational capabilities and expand its market reach, though specific partnerships or agreements are not detailed.

TerraCom Limited Financial Statement Overview

Summary

TerraCom Limited exhibits a mixed financial position. While there have been positive developments in debt reduction and equity stabilization, the company's declining revenues and cash flow issues pose significant challenges. The coal industry backdrop adds additional pressures, necessitating strategic adjustments to improve profitability and cash generation. The company needs to address revenue growth and operational efficiency to strengthen its financial health.

Income Statement

The income statement shows a significant decline in revenues, from AUD 804.63 million in 2022 to AUD 259.14 million in 2024, indicating a sharp revenue contraction. Net profit margins have turned negative in the most recent year, reflecting potential profitability issues. However, the company has previously demonstrated strong gross profit margins, suggesting some operational efficiency. Overall, the declining revenue trend and negative net income raise concerns about future profitability.

Balance Sheet

The balance sheet reveals a marked improvement in the debt position, with total debt reducing significantly from prior years. Stockholders' equity has stabilized, providing a better equity ratio. However, the overall assets have decreased, and the equity ratio, while improved, indicates room for further strengthening of financial stability. The debt-to-equity ratio remains low, which is positive for leverage management.

Cash Flow

The cash flow statement indicates a shift from positive to negative free cash flow, primarily driven by a substantial decline in operating cash flow. The free cash flow to net income ratio has deteriorated, suggesting challenges in cash generation relative to earnings. While previous years showed robust free cash flow growth, the current trajectory highlights liquidity and cash management concerns.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
229.19M	259.14M	660.64M	804.63M	549.01M	316.86M
	Gross Profit
35.22M	57.86M	324.29M	383.51M	14.23M	-8.86M
	EBIT
18.16M	24.25M	314.17M	345.64M	-23.73M	-35.13M
	EBITDA
17.69M	55.00M	334.61M	371.95M	-16.36M	4.66M
	Net Income Common Stockholders
-2.66M	25.95M	262.10M	196.13M	-84.06M	-48.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
10.93M	8.35M	44.03M	69.57M	11.19M	10.11M
	Total Assets
298.27M	314.42M	356.20M	422.21M	623.99M	600.77M
	Total Debt
4.07M	4.18M	7.27M	37.33M	317.42M	265.74M
	Net Debt
-6.86M	-4.17M	-36.76M	-32.24M	306.24M	255.63M
	Total Liabilities
133.17M	146.57M	188.35M	276.58M	651.50M	559.75M
	Stockholders Equity
165.73M	168.26M	167.33M	145.51M	-80.41M	-21.15M
Cash Flow		Free Cash Flow
-11.16M	-28.07M	236.82M	316.21M	-22.58M	-12.98M
	Operating Cash Flow
-3.59M	-15.55M	247.55M	324.00M	5.79M	3.29M
	Investing Cash Flow
9.66M	6.19M	-2.76M	-22.20M	-43.80M	-54.70M
	Financing Cash Flow
-10.98M	-26.69M	-270.69M	-245.64M	39.27M	2.96M

TerraCom Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.06
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:TER, the sentiment is Negative. The current price of 0.06 is below the 20-day moving average (MA) of 0.06, below the 50-day MA of 0.06, and below the 200-day MA of 0.14, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 41.40 is Neutral, neither overbought nor oversold. The STOCH value of 20.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AU:TER.

TerraCom Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	58 Neutral	$7.43B	3.43	-4.49%	10.08%	0.81%	-49.42%
TER	45 Neutral	AU$46.46M	4.48	-1.57%	17.24%	-38.32%	-102.34%
NHPEF		$2.10B	6.33	22.35%	8.62%	―	―
WHITF		$3.09B	27.18	3.39%	2.95%	―	―
YACAF		$4.72B	5.70	13.93%	9.64%	―	―
SMR	70 Neutral	AU$1.74B	6.01	10.52%	11.12%	-13.91%	-58.85%
CRN	55 Neutral	AU$276.61M	―	-16.23%	10.54%	-17.57%	-1132.91%

TerraCom Limited Corporate Events

TerraCom Limited Updates FY25 Guidance and Outlines FY26 Strategy

TerraCom Limited has revised its FY25 sales guidance for the Blair Athol coal mine to 1.52 million tonnes, down from 1.6 million tonnes, due to adjustments in the production schedule. The company is finalizing its FY26 production and sales strategy, focusing on an optimized production schedule and cost reduction initiatives to maintain competitiveness amidst coal price volatility. These strategic decisions aim to strengthen TerraCom’s position in a challenging economic environment, ensuring value delivery for shareholders, customers, and communities.

TerraCom Limited Presents Investor Information on Coal Operations

TerraCom Limited has released a presentation intended for prospective investors, highlighting its operations and assets in Australia and South Africa. The presentation aims to provide information about the company’s business activities and financial performance, though it does not constitute investment advice. The document includes non-IFRS financial data and emphasizes that the information provided is for general purposes, urging recipients to conduct their own independent analysis before making any investment decisions.

TerraCom Director Increases Shareholding

TerraCom Limited has announced a change in the interest of its director, Mark Lochtenberg. The director, through Rigi Investments Pty Ltd, has acquired an additional 3,280,900 fully paid ordinary shares, bringing the total to 17,783,293 shares. This transaction was conducted as an on-market trade at a price of $0.064077 per share. The acquisition of these shares may indicate a positive outlook or increased confidence in the company’s future prospects by its director.

TerraCom Limited Announces Changes in Substantial Holder Interests

TerraCom Limited has announced changes in the interests of its substantial holder, Regal Funds Management Pty Limited, which has adjusted its voting power through a series of transactions involving ordinary shares. These changes reflect a strategic realignment in the company’s shareholder structure, potentially impacting its governance and future decision-making processes.

TerraCom Reaches Agreement with ASIC on Legal Proceedings

TerraCom Limited has reached an agreement with the Australian Securities and Investments Commission (ASIC) to resolve civil proceedings related to a contravention of the Corporations Act 2001. The agreement, pending Federal Court approval, includes TerraCom paying a $7.5 million civil penalty and $1 million in ASIC’s legal costs. This resolution is significant as it allows TerraCom to move forward from the legal proceedings, potentially stabilizing its operations and reassuring stakeholders.

TerraCom Limited Overcomes Weather Challenges, Maintains Strong Coal Sales

TerraCom Limited reported a challenging March quarter due to severe weather conditions affecting its Blair Athol operations, yet maintained strong operational momentum. The company achieved total coal sales of 1.6 million tonnes and eliminated its historic tax debt, while also securing a US$20 million prepayment agreement to bolster working capital. Despite these challenges, TerraCom remains committed to its sales guidance of 1.6 million tonnes for FY2025 and is progressing with the Moorlands Thermal Coal Project, expected to commence operations in 2026.

TerraCom Limited Announces Change in Substantial Holder Interests

TerraCom Limited has experienced a change in the relevant interests of its substantial holder, Regal Funds Management Pty Ltd and its associates. The notice indicates a shift in the voting power and the number of ordinary shares controlled by the substantial holder, reflecting a dynamic change in shareholder influence which could impact company decisions and stakeholder interests.

TerraCom Revises FY2025 Sales Guidance Amid Weather Challenges

TerraCom Limited has revised its FY2025 sales guidance for the Blair Athol coal mine to 1.6Mt, down from 1.8Mt, due to severe weather impacts on production and logistics. Despite these challenges, the company remains confident in meeting coal sales targets for the June Quarter, aided by improved productivity from new equipment and ongoing cost management efforts. The company is also progressing with the Moorlands Project, with first coal expected in 2026.