Autlán, by generating income from the dollarized sales of its products, we estimate it would show strength in its results in the second quarter of the year
Last Tuesday, June 21, we had the presence of Compañía Minera Autlán, (Ticket code: AUTLAN) in our streaming at Punto Casa de Bolsa.
Anateresa Troncoso, Manager of Financial Planning and IR, accompanied us to present the company to the investing public.
Autlán is a Mexican company with more than 65 years of experience in the mining sector.
Until 2020, its operations were 100% focused on Mexico. It was in that year that a company in the Basque country was acquired, its new division: Autlán EMD.
Autlán has the following divisions:
Autlán Manganeso —main division of the company— in which they have manganese mines for extraction to later be processed, thus obtaining the manganese nodule, which increases the concentration of the material to produce manganese ferroalloys.
Autlán Metallorum —During 2018 Autlán acquired 100% of the capital stock of the company Metallorum, thus creating this division— in which they focus on the extraction of precious metals, mainly gold.
Autlán Energía, a division focused on the production of renewable electricity with its hydroelectric plant in Puebla. This division is mainly focused on self-supply —during 2021 the company produced 15% of the total energy requirement of its ferroalloy plants— with the intention of becoming an important part of its total income.
Finally, the Autlán EMD division, focused mainly on the extraction of electrolytic manganese dioxide. This material is used mainly in the manufacture of alkaline batteries (long-lasting batteries) so, with this new division, the company seeks to diversify its production to depend less on the steel industry and enter the battery market in Europe. .
Although the company currently has a greater presence in the steel industry, it has exposure in many more:
In the Autlán Manganese division they participate in several industries since this material is essential for the production of different materials; These industries include steel, batteries, ceramics, and agribusiness.
In the Autlán Metallorum division they participate in the jewelry and electronics industries.
The Autlán Energía division focuses on clean energy, with the aim of self-supplying the company.
The Autlán EMD division is present in the battery industry.
The company has decreased its accident rates over the years, and has been recognized as a ‘Silver Helmet’ by Camimex on different occasions as a result of the decrease in accidents at its mines.
Autlán’s management is seeking the ESG rating they hope to have by the second half of the year. All of its projects are aligned with the ODS in matters of reforestation, water care and clean energy.
In addition, the company has a commitment to the society in which it operates—they have been recognized as a socially responsible company for more than 12 years—providing education and health brigades to these communities.
What are Autlán’s prospects for 2022? The mining sector has a significant seasonality, benefiting the first quarters of the year, so together with the significant volatility that metals and ferroalloys have presented during the year, we see a possible decrease in their prices towards the second half of the year.
Autlán, by generating income from the dollarized sales of these products, we estimate it would show strength in results towards the second quarter of the year.
However, it is important to mention that Autlán has an Enterprise Value over EBITDA (EV/EBITDA) multiple close to 2.2 times, which would make it a very attractive investment option when compared to companies that belong to the same sector.