E Chihuahua

Happy Wednesday! Again a barrage of news and a belated result note from one of our companies is keeping me from commenting on general matters.

Eduardo Garcia in Sentidocommun.com today wrote that Mexican Reserves dropped by $203 mn to $195.6 bn. This worries me less than the 2-yr T-bill trading at a premiun with interest at 1.19% when the minimun by law is 1.25%. That means it commanded a premiun of 100¢/bill.

China is creating digital money which can be used without internet connections, initially useable to buy metro tickets in Beijing.

After my blog went out yesterday the Dow recovered and now it is up another 400 points. Nasdaq gained too, despite not recovering Tuesday.

U.S. dollar banknote with map

Image Source: Unsplash

Industry

*Tomra Systems yesterday posted a slide show as the only way to view its quarterly results, so they could not be posted in my brokerage account or others'. It has 2 ticker symbols in the USA, TMRAY, and TMRAF. The Norwegian company operates in two businesses, sorting and reverse vending machines. Both were hit by covid-19 but by Q4, Tomra wound up with a new record of revenues which hit NOK 2.7 bn, up 4%, and CEO Stefan Ranstrand claimed that gross operating margins also were strong in sorting. His comments were published by seekingalpha and yahoo in transcripts late yesterday, well after my blog was written. There were technical issues even then and I am using his comments rather than tables which I couldn't access.

Earnings before interest, taxes, depreciation, and amortization hit NOK 505 mn up from prior year's 408 mn. It cashflow of NOK 890 mn compared to NOK 600 mn in 2019.This mostly came in H2 after Covid-19 hit the bottle return business because of contamination risks even in Q1 and a lot in Q2. Its workers worked from home when possible and it imposed a hiring freeze. Collection rose 10% in the quarter. Operating expenses were down, at NOK 881 mn.

CEO Randstrand says recycling packaging is picking up and is necessary for cleaning up the world, but that disruption of its vending machines is a temporary result of the virus particularly in Australia (a new market) and the US, but less so in Europe, particularly Germany, Nordic Europe, and the Baltics, where demand was stable largely because of a new method allowing collection not of individual bottles, plastic containers, and cans but a whole dumpload of them. The EU now charges 800 euros for using a tonne of virgin plastic rather than recycled plastic. Deposit markets in The Netherlands were helped by new laws there, and this month legislation for deposit returns came in Slovakia and Latvia. Scotland will pass a deposit return law this summer and the rest of Britain next year but with a fee of only £200/tonne. This still accounts for about 2/3 of Tomra's business. The sorting side is lagging but recycled PET plastic is now priced higher (nearly double) that of virgin PET because bottlers want to reuse the plastic. The EU and Britain will pass laws this year boosting the higher price of reused PET.

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