TSX:CUS.DB.D - Post by User
Comment by
Calgaryrideron Mar 30, 2015 11:47am
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Post# 23576894
RE:RE:Canexus Guidance for 2015
RE:RE:Canexus Guidance for 2015This is an insightful post and backs up my 50/50 statement earlier on Canexus. It is no better than gambling. As the price of oil does not follow fundamentals, it follows OPEC's decisions and investor sentiment, this is no better than playing Blackjack by the book.
Anyways, I am aware that Canexus has indeed cut a huge swath of employees.
Unfortunately (for them - and investors), much of the cutting has be indiscriminate - very little strategy, head count reduction. I am aware that they've got rid of some of the more key operational strategy folks. Bad moves. Yet, somehow several in Finance, the CFO and various board members (those who have been draining coffers with needless Dividends for quarters) still maintain their roles.
Yes, NATO had a huge cost over-run, but the reason that Canexus is where it is today, in a black hole of debt with little prospect of escaping the centre, is because management mismanaged their risks.
There were several key milestones where the dividend could have been cut:
1) NATO goes over budget....this was known well over 1.5 years ago.
2) When the price of oil began to drop several quarters ago.
3) When the first round of offers for NATO were insufficient and Management actually limited the number of trains contracted to ensure they could get top dollar for NATO (assuming bids from producers).
4) Immediately after the second round of bids (at $50 oil) were found to be insufficient.
5) When they became aware that chemical business margins were also waning.
6) When the new CEO came in.
Any of these and more.
You wonder how the CFO is still around. I'm particularly interested in how big his severance package is. Maybe that is the ONLY reason this clown is still around. They don't want to take a one-time hit. That's all I can fathom.
Anyways, Douggy clearly said that Q1 and Q2 are going to be even worse for NATO. The banks are relaxing covenants because of this. There is no reason to speculate if it's because of a sale. It's not. The business is tanking worse. We KNOW this.
Buying right now is MADNESS in my eyes.
Like I said before, there is a better opportunity coming. Many of you didn't believe me last time....and here we are....