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Concordia Healthcare Corp. T.CXR.R



TSX:CXR.R - Post by User

Comment by wordlesson Jul 13, 2016 11:56pm
266 Views
Post# 25051050

RE:RE:Brexit thoughts

RE:RE:Brexit thoughts" Focus on top line revenues"

Well top line revenues on a consolidated basis for USD reporting purposes will be lower now with the GBP/USD fx rate out of favour for this company. EBITDA would be a much more relevant focus point imo as the GBP revenues will have lower EURO and lower GBP costs associated with the costs of those revenues and this the EBITDA impact will be less significant than the impact on top line sales. Consolidated EBITDA gives a better debt servicing picture in the long run as most of the debt is in USD. In the short run, GBPs will service GBP debt and vice verse with the USDs earned. If Europe implodes in the next few years, I can see the GPB actually becoming a powerhouse currency again by the time it actually matters for CXR. JMHO.


MirrorWorldMan wrote: Taking advantage of non GBP income from other countries to pay down GBP debt is a no brainer as they take into account the exchange rate benefits. Having a high USD debt relative to GBP debt is not so good. I wish the percent debt was the other way around (ie more GBP and less USD) but it is what it is. This statement is a little different than the original knee jerk reaction out of Concordia that said they were going to pay down GBP debt with GBP revenue. The CFO must of given him a kick under the table after that response, and the analysts may have gotten nervous. He was right if he would of said they will use US revenue to pay US debt. The best thing to do is take a deep breadth and to use the exchange rates in your favour if you can and I agree to minimize current conversion to US dollars to pay down US debt. Wait and see what 2017 brings. Focus on top line revenues with new launches etc. That being said, the first sign of potential issue is divs. 


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