First quarter resultsThe results look fine. There will be questions about the pace of capital deployment. With capacity to spend $600 million, they have only deployed $600 million, with the remainder expected to be deployed in 2018 to mid 2019. Recognize that this unused capital has a cost (both in terms of equity dilution and debt interest cost). Now I think being judicious is very reasonable , especially as rates rise and fuel bills . The last thing Chorus needs is an impaired customer . Being patient is prudent.
The shareholder base base has been clearly changing, as those that historically owned it for the yield as reacting to the rate rise environment and this has overwhelmed the buyers excited about the leasing business. Misunderstanding about Chorus risk to higher fuel prices (negligible) exacerbates the situation and the Q4 results were sloppy. The recent equity issue and the current trading price means all the institutional buyers are underwater so this thing needs to do some work as it faces resistance at higher share price levels .
If Chorus can deploy the capital and illustrate the ability to generate a 15 percent ROE on leasing, the institutional support will grow and naive retail selling will subside in my opinion. Just simply supply and demand .
Good luck .