RE:RE:RE:RE:RE:RE:EURO-US dollar ,not pound sterling vs U.S. dollar <If the Bank of England lowers their interest rate on Thursday, the GBP/USD will continue downward. > This bank can do whatever ....now! They will adapt later , when will more EXITS.
<Furthermore, you have stated that their expenses are in pounds. This is incorrect as well.
CXR cogs are in euro. >
UK will not respect the EU accounting and EURO expenses because of the BREXIT.
The expenses will be on the currency where will be incurred. CXR has sales on EU but a huge part of them in UK.Matching principle also invoked , these GBP expenses will be recorded during the period in which they are incurred if not reimboursables.
When I am speaking about protected accounting the risk of other currency are included.I examinated last financial statement and I understood their protection.
Even that in a short or middle term they are affected by fluctiation of same currencies , on long term thei will realize their goal.
<They should have hedged against lower sterling. A weaker pound negatively impacts revenues and EBITDA>
Maybe, for the moment. I did not calculate this impact, I did not evaluate some scenarios.
I remain confident that this low British pound will affect only short-middle term not more than it.
<The Board Baggies just look foolish saying that a lower GBP is a good thing for Concordia, and ... oh wait.... Why were they not cheerleading for Brexit if that was the case? >
They are not exactly foolish because their debt is lower , not only their sales.If you remember last financial statements , they finished with good cash.
I was waiting also for them to say something quickly about Brexit, but I realised that it is hard to predict their impact because Brexit was not stable. They were speaking about second referendum etc.
We started to see more how EU reacts and understand that other EXISTS are likely.It is not pressure to calculate EBITDA right now, each week can change the situation.
Lattice wrote: ana852456 wrote: CXR has sales, expenses , not only debt in UK.
High pound=high sales, so ok to pay debt because of cash high.
Low pound =low debt, so even that the sales are low ,the debt is also low=ok to pay debt.
They have a good strategy, protected accounting.
You are wrong on multiple points. CXR's strategy should have involved hedging against a lower pound because their "natural hedges" refers to the £ denominated debt. But only 20% of CXR's debt is in GBP which leaves them exposed to their debt that is in USD. If there is continued GBP weakness, the outlook for CXR will continue to be lower.
This is not short spin. This is a fact.
If the Bank of England lowers their interest rate on Thursday, the GBP/USD will continue downward. Furthermore, you have stated that their expenses are in pounds. This is incorrect as well.
CXR cogs are in euro.
Verbatim, from the Q4
Conference Call
Douglas Meihm: "When we think about the AMCo business, are most of you drugs that you are buying or contracting through your manufacturers, are they priced in euro, pounds ... et cetera, or are they in US dollars?"
Adrian De Saldanha: "Most of the costs are in Euro, and then the pricing would depend on the jurisdiction which they sell."
Martin Landry: ".... But if the Euro strengthens against the pound that would put pressure on your margins, right?"
Wayne Kreppner: "That would, but that's not something that we are currently actively hedging at the moment.... "
CONCLUSION: They FUCCKED up. They should have hedged against lower sterling. A weaker pound negatively impacts revenues and EBITDA. Period. The Board Baggies just look foolish saying that a lower GBP is a good thing for Concordia, and ... oh wait.... Why were they not cheerleading for Brexit if that was the case?