APX Mining has improved its Q1 2022 cash flows from operating activities to 1.04 billion from just 0.39 billions from last year. This is a significant milestone for APX.
The strong cash flow from operations allowed APX to fund expenditures for mine development without borrowing from its banks. It also provides APX with extra funds to pare down debts.
APX’s total loans payable stood at 4.3 billion at the end Q1 2022. The loans payable has to go down significantly for APX to become attractive to value investors. Until free cash flows can be allocated for shareholder dividends, APX might not be in a value investor’s radar. As of the moment, free cash flows are being sucked by debt repayments.
For now, the only good use for APX is a hedge against an unlikely collapsed in the value of the Philippine Peso. Should it happen, APX being a commodity exporter could reap significant windfall. Such a windfall will allow APX to wipe out its debt and distribute handsome dividends to shareholders. This is probably why Enrique K. Razon Jr. is keeping APX in his portfolio.
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