Joy Global FY 4Q15 Earnings Call Notes

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Ted Doheny

2016 should be another rough year

“The mining industry in 2016 will be defined by strained cash flows, further austerity measures and asset consolidation. The net effect will be the third consecutive year of double-digit decline in capital spending.”

Have had positive developments in copper markets

“In recent months, we’ve seen some potential positive developments in refined copper market. Our original estimates expected refined copper markets to be in surplus until 2017. However, the production curtailments that have already been announced could ship to refine market to a deficit as early as next year, which could support improved pricing and drive project investment.”

Facing continued headwinds in coal

“One of the largest headwinds we continue to face is in U.S. coal markets. The combination of regulatory forces and a seemingly unlimited supply of abundant low-cost natural gas is transforming the U.S. electricity industry. Although coal will continue to play an important role, we now expect that coal burn in the electric power sector could decline nearly 100 million tons in 2015.”

Coal CapEx more likely to bottom in 2017

“we see U.S. coal, which we’ve been now following for three years. We see that in the next 12 to 18 months. The data we look at is what our customers’ CapEx has been out there and we saw that’s pointing down to bottoming at 2017 on public data. So we just have to be prepared for that to take another step down in ‘16.”