Orocobre Limited

Positive update and reconfirmation on the guidance for full year:Orocobre Limited (ASX: ORE) stock rose 5.6% on October 27, 2017 after the company released the quarterly update. For the quarter ending September 30, 2017, ORE has generated sales revenue of US$23.2 million ($30.3 million) on total sales of 2,072 tonnes at an average sales price of US$11,190 per tonne, at Olaroz Lithium Facility. There is a strong 5% growth on the average sales price over the preceding quarter. On the other hand, revenue has slipped by 15% over June quarter and costs have been up with an increase of 17% to US$4,987 per tonne due to the lower production volumes in July and August and higher soda ash unit costs due to the impact of bad weather in June. There might be some relief post the production ramp-up in the second-half and normalisation in other costs. Moreover, the production has continued to increase in October, and the group is on track to touch 1,220 tonnes for the month. ORE has reiterated the guidance for the full year of 14,000 tonnes of lithium carbonate with production split approximately 45/55 between the first and second halves with record production expected in the December quarter at a production cost of <US$4,000/tonne. ORE stock has risen 44.52% in last six months as on October 26, 2017, and the support from lithium industry dynamics and demand scenario is expected to be further favouring the stock.
 

September Quarter Performance (source: Company Reports) 

Vita Group Limited

Weak trading update:Vita Group Limited’s (ASX: VTG) stock fell 9.9% on October 27, 2017 as weakness in sentiments built up from distressed investors when the company gave the trading update with its full-year earnings guidance in its annual general meeting. VTG expects the remuneration changes from its negotiations with Telstra to cause an annual impact of $25 million compared to FY 17. However, the company aims to offset this with a $5 million cost reduction program, continued performance optimisation, increased retail information and communication technology (ICT) store numbers, and an improved business ICT channel. Moreover, the new device launches will impact the timing of earnings more significantly than previous years and the benefits are expected to move from first half to second half of 2018. Additionally, VTG expects the first-half EBITDA to come in between $16 million and $18 million and FY18 EBITDA is expected to be in the range of $36 million and $43 million. The full year earnings are unlikely to recover the lost ground in the first half.
 

Projection of EBITDA (Source: Company Reports)

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