TerraCom Limited (TER) AI Stock Analysis

• Market Cap: AU$48.06M
• Dividend Yield: N/A
• Average Volume (3M): 2.26M
• Price to Earnings (P/E): 4.5
• Beta (1Y): 0.79
• Revenue Growth: -38.32%
• EPS Growth: -102.34%
• Country: AU
• Employees: 3,622
• Sector: Energy
• Sector Strength: 45
• Industry: Coal
• EPS (TTM): >-0.01
• Shares Outstanding: 800,966,250
• 10 Day Avg. Volume: 2,559,530
• 30 Day Avg. Volume: 2,264,460
• PEG Ratio: 0.16
• Price to Book (P/B): 0.28
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.16
• 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

TerraCom Limited's overall stock score reflects significant financial and technical challenges. The company faces declining revenues, negative cash flow, and a bearish technical outlook, compounded by a negative P/E ratio which diminishes its valuation appeal. Despite some positive notes on debt reduction, the stock's current conditions warrant caution and reflect a need for strategic improvements to enhance its financial and operational standing.

TerraCom Limited Business Overview & Revenue Model

Company Description

TerraCom Limited (TER) is a resources company primarily engaged in the exploration, production, and sale of coal. The company operates in several key markets, including Australia and Mongolia, providing thermal and coking coal to both domestic and international customers. Its operations are strategically positioned to serve the growing energy demands of Asia and other regions, leveraging extensive mining expertise and a commitment to sustainable development.

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. There have been positive developments in debt reduction and equity stabilization. However, significant challenges arise from declining revenues and cash flow issues, raising concerns about future profitability in a pressured coal industry.

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: Positive
• STOCH: Neutral

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 0.08, and below the 200-day MA of 0.15, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 19.77 is Positive, neither overbought nor oversold. The STOCH value of 42.13 is Neutral, 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
YAL	75 Outperform	$6.79B	5.57	13.93%	10.74%	-12.04%	-32.97%
NHC	75 Outperform	AU$3.09B	5.88	22.35%	10.11%	-1.17%	-14.64%
SMR	70 Neutral	AU$1.74B	6.40	10.52%	8.42%	-13.91%	-58.85%
WHC	68 Neutral	$4.61B	26.60	3.39%	4.17%	47.28%	-84.83%
Sector *	57 Neutral	$7.13B	3.45	-3.67%	5.68%	0.46%	-50.35%
CRN	50 Neutral	AU$285.00M	―	-16.23%	8.28%	-17.57%	-1132.91%
TER	43 Neutral	AU$48.06M	4.48	-1.57%	―	-38.32%	-102.34%

TerraCom Limited Corporate Events

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.

TerraCom Limited Reports Resilient Interim Financial Results Amidst Challenges

TerraCom Limited announced its interim financial results for the six months ending December 31, 2024, highlighting a normalised EBITDA of $19.3 million and a normalised NPAT of $9 million. Despite challenges such as unexpected rainfall and a delayed shipment, the company maintained operational efficiency, reduced costs by 5%, and showcased resilience. TerraCom’s business model, supported by a diversified customer base and a strong market reputation for its high-quality thermal coal product, remains robust. The company is focused on maximizing value from its Blair Athol operations, divesting South African operations, and commercializing the Moorlands Project to enhance its market position and deliver sustained stakeholder value.

TerraCom Limited Reports Decline in Half-Year Financial Performance

TerraCom Limited announced a significant decline in its financial performance for the half-year ending December 2024, with revenue dropping by 21%, EBITDA by 69%, and profit after tax by 91% compared to the previous period. Despite these challenges, the company declared a dividend for the six months ending December 2024, although no dividend was declared for the last quarter. The company’s net tangible assets per ordinary security slightly decreased, and there were no changes in control over entities or audit qualifications.