As of September 30, 2020 AT (Atlas Consolidated Mining and Development Corporation) holds a cash and cash equivalent of 1.4 Billion Pesos. But the current portion of its long-term debts amounts to 7.4 Billion Pesos.
For the nine-month period ending September 30, 2020, AT was able to generate cash of 4.3 Billion Pesos. That cash generation is of the same level as last year’s of the same period. Of the 4.3 Billion Pesos cash generated from operations 2.1 Billion was shaved from that cash as a result of the strengthening of the Philippine Peso against the US Dollar.
Despite copper trading near seven-year highs and gold hovering about 10% below its peak, AT’s cash generation has not improved significantly. What is worse is that the strengthening of the peso against the dollar is shaving a significant portion of the cash generation.
Without a significant cash flow generation, AT may yet again pay the maturing portion of debts with debts.
Despite inability to generate significant cash amidst a surging copper and gold prices, the market is pricing AT at a five-year high.
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Disclaimer and Disclosure: This analysis is an independent viewpoint on publicly traded stocks in the Philippine market. Accuretti Systems Inc. trades stocks in the Philippine market.