Bauxite miner Metro Mining Ltd (ASX: MMI) reported its full year results recently, posting a major increase in net profit and also announcing a share buyback.
The results have confirmed the ASX small cap miner’s status as undervalued in the eyes of the team at Shaw and Partners, which reiterated a bullish price target for the shares.
More on that later. First, let’s have a look at the results.
Record performance
Metro Mining said in a statement to the ASX last week that it had shipped a record 6.2 million tonnes of bauxite, which was a 9% increase year-on-year.
The company’s net profit came in at $142.3 million, up from a loss of $22 million the pervious year, and the company had $57.5 million in cash and $58.9 million in senior debt at the end of the year.
The company’s guidance for this year’s production was set at 6.6-7.1 million tonnes of bauxite, with Metro’s confidence allowing it to start a share buyback.
As the company said:
Due to confidence in the company’s financial position, operational performance and long-term outlook the board believes that the current share price does not reflect the underlying value of the company’s assets and prospects. As part of its ongoing capital management strategy, Metro is pleased to announce its intention to undertake an on-market share buy-back of up to 5% of shares on issue.
ASX small-cap shares looking cheap
The Shaw and Partners team had a look at the full year result and said it was “strong”, with underlying EBITDA up 95% to $73 million and net debt close to zero.
They added:
The result was delivered despite a weaker bauxite price in 2H25, delivery of bauxite into low price legacy contracts, and a number of operational issues which have now been addressed.
They also believed the production guidance could be conservative.
Metro has released production guidance for CY26 of 6.6-7.1Mt (Shawf 6.8Mt). In CY25 the flow sheet proved itself capable of delivering in excess of 7Mt, and so we view the guidance as realistic but conservative. CY25 was impact by an unseasonal tropical low in April which caused the Skardon River channel to silt up, and restrict the amount of bauxite which could be loaded on barges. The operation also suffered from an unplanned barge loader outage in October and weather disruptions in late December.
Shaw and Partners has a price target of 15 cents on Metro Mining shares, compared with 7 cents currently.
Metro Mining was valued at $433.9 million at the close of trade on Friday.
The post This ASX small-cap miner could more than double: Broker appeared first on The Motley Fool Australia.
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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.