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Xebec schedule & Shell results for 1Q21 plus more on energy ?3

16:20 29-Apr-21


Xebec has scheduled its first quarter results presentation for the morning of May13th.  The average of estimates from 4 analysts still covering the company is for a loss of 4 Canadian cents per share from CAD 22.4M of revenue, rising to CAD 27.9M this quarter. 

7 analysts covered the company prior to the crash surrounding the last report.  I say good riddance, and XEBEF is now the only GRoDT that I am happy to own at current prices in this market environment.  That said, it may be too early for much material improvement.  Furthermore, CAD near 5 year highs near $0.814 could represent a sustained headwind as I think we could see parity going forward.  Historically speaking, that has only happened on either side of the 2008 crash.  I reached out to Xebec on the issue and got the following response:

We typically price our products in local currency in a main markets of Canada, U.S.A, Europe or China.

We’re currently looking at a couple of strategies to hedge our currency risk as it’s become more relevant to us as of recently with our European acquisitions.

It's not surprising to me that Xebec should languish while the oil market experiences a reopening rebound.  Shell managed to improve its bottom line by a factor of more than 8x sequentially:

I don't know how long this phase will last... probably months, maybe a year or more.  Frackers like are making the best of it even as a U.K. Pension fund group pushes Shell to do more in its transition strategy.  Liberty Oil Field Services even reports that it will begin field testing electric fracking fleets next month.  That makes me doubt my predictions of VorTeq's immediate demise, but I still wouldn't touch ERII shares at a fraction of the current price.  Shell's still sub-4% yield doesn't tempt me yet either, with the Saudis looking to sell off some Aramco shares and other environmental concerns looming.  I'm completely happy to wait out this phase on both sides of the fossil / renewable fence.