Last close As at 05/08/2026
USD4.02
▲ 0.07 (1.77%)
Market capitalisation
USD1,742m
Research: Metals & Mining
The Metals Company (TMC) reported Q126 results on 14 May, ending the quarter with net liquidity of c $164m, slightly better than the $154m the company expected at FY25 due to c $9m of tax-related timing differences, which are expected to reverse. The company continues to see cash on hand of $119.7m plus $44m of undrawn credit facilities as more than sufficient for the 12 months from 14 May. TMC has achieved major milestones so far this year such as a production agreement with Allseas and the determination by NOAA that TMC’s subsidiary TMC USA’s consolidated deep-seabed mining application is in full compliance. TMC reiterated its confidence in achieving system commissioning in Q427 and its $23.6bn post-tax NPV valuation.
| Year end | Revenue ($m) | PBT ($m) | EPS (¢) | DPS (¢) | P/E (x) | Yield (%) |
|---|---|---|---|---|---|---|
| 12/23 | 0.0 | (61.9) | (20.00) | 0.00 | N/A | N/A |
| 12/24 | 0.0 | (63.5) | (18.00) | 0.00 | N/A | N/A |
| 12/25 | 0.0 | (49.6) | (12.00) | 0.00 | N/A | N/A |
| 12/26e | 0.0 | (47.0) | (12.00) | 0.00 | N/A | N/A |
TMC continues to view 2026 as a year of accelerated execution, with some major milestones achieved in the last few weeks. On 11 May it announced that it had signed a commercial agreement with Allseas for the first offshore nodule recovery operation, with work described by TMC as well-advanced. TMC has had a strategic alliance with Allseas since 2019, and with this agreement Allseas has agreed to fund a significant portion of development costs, to be recoverable through production revenues. On 1 May, TMC announced that NOAA had determined TMC’s consolidated deep-seabed application is in full compliance, which is a key step towards an expected permit by the end of Q127. The company expects a consistent cadence of regulatory milestones in the coming months.
TMC’s chief innovation and technology officer joined the Q126 call to give a thorough overview of the nodule production system. The operating model is designed for uninterrupted collection, backed up by extensive simulation and modelling. The company expects procurement and subcontracting to start in Q326, followed by fabrication and system integration from Q426 until Q327. The pre-feasibility study for a potential processing plant at the Port of Brownsville site is ongoing. All four of TMC’s metals have now been designated by the US as critical and important for national security.
TMC reported an operating loss of $34.0m ($18.0m in Q125) in Q126 driven by higher exploration, evaluation, general and administration expenses. Other non-operating items amounted to a positive $13.5m variance (negative $2.6m in Q125), which resulted in a net loss per share of $20.5m that was little changed from the Q125 net loss of $20.6m. While liquidity at the end of March of c $164m includes $9m of tax-related timing benefits, TMC continues to believe liquidity is sufficient for at least 12 months. Its $23.6bn post-tax NPV valuation is unchanged.
TMC has c 1.6bn tonnes of existing estimated resource plus an additional c 300Mt resource potential in the Clarion-Clipperton Zone (CCZ), an area of sea floor in the Pacific Ocean between Hawaii and Mexico. Its resource is contained in two contract areas: Nauru Ocean Resources Incorporated (NORI, c 850Mt, sponsoring state Republic of Nauru) and Tonga Offshore Mining Limited (TOML, c 750Mt, sponsoring state Kingdom of Tonga). These contract areas are themselves contained within the larger application areas for which TMC is seeking permits from National Oceanic and Atmospheric Administration (NOAA) through the US regulatory regime. TMC’s pre-feasibility study (PFS) is its highest-confidence study (based on proven and probable reserves with a cost accuracy of ±25%) and covers c 350Mt of resource in the NORI-D area, while its Initial Assessment (IA) includes inferred, indicated and measured resources (with a cost accuracy of ±50%) covering c 1,275Mt of resource. At its August 2025 capital markets day (CMD), the company shared details of these studies and its commercialisation plans. TMC sees production commencing in Q427 and ramping up from c 1Mtpa in 2028 to c 11Mtpa in 2031, with annual production to 2044 maintained in the 10–12Mtpa range. The polymetallic nodules that the company will recover from the sea floor contain nickel, manganese, copper and cobalt.
TMC expects a consistent cadence of regulatory milestones in the coming months. Management’s ambition is to fill summer 2026 with a healthy supply of newsflow.
TMC’s operating model is designed for uninterrupted collection backed up by extensive simulation and modelling. Nodules collected from the sea floor will be lifted to the Little Gem and shipped to shore for processing. According to the company, execution of the programme for the offshore production system is underway: the concept and basic engineering for long lead packages (eg the riser, vessel integration) is substantially advanced and completed by Allseas. TMC expects procurement and subcontracting to start in Q326, followed by fabrication and system integration from Q426 until Q327, putting the company on track for production in Q427.
The valuation potential of the business as originally highlighted at its CMD remains (see our August 2025 update note). TMC suggested a post-tax net present value (NPV) of $5.5bn for the c 350Mt resource base included in the PFS and a post-tax NPV of $18.1bn for the c 1,275Mt resource base included in the IA. In total this results in a post-tax NPV of $23.6bn. These valuations use a post-tax discount rate of 8%, which we continue to consider somewhat low for equity investors given the current stage of development. That said, TMC clearly trades at a significant discount to the current PFS and IA NPV calculations. The company highlights healthy internal rates of return of 27% for the PFS on NORI-D and 36% for the IA covering the undeveloped blocks.
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Research: TMT
Dentsu Group has enjoyed a steady start to the year with Q126 results slightly ahead of management’s expectations. Perhaps of greater interest was the first presentation from the new global CEO. There are three core pillars to his vision for Dentsu to be a growth partner for clients: strengthening client centricity, improving Dentsu’s agility and increasing collaboration across and beyond Dentsu. Naturally, all require change and will take some time to come through to a greater or lesser extent. However, there are already signs of the new CEO taking decisive actions with the accompanying news of asset disposals and restructuring in some international markets in order to improve Dentsu’s competitiveness and profitability. The new CEO highlighted that the midterm management plan is still being reviewed, so further announcements about strategy and operations should be expected. While noting the increasing macroeconomic challenges, management re-iterated financial guidance for the year.