TSX:STB.DB.A - Post by User
Post by
rehsifylfon Oct 02, 2015 1:27pm
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Post# 24157788
Hedging is definately not STBs forte
Hedging is definately not STBs forteI'm glad that they switched to the US dividend. They were awful at hedging on $US and always seemed to play it poorly. On fuel - they are equally bad. Why on earth would they commit to 20% of 2016 fuel in Oct 2014. Everyone, and I mean everyone, knew that what was going on with Oil production at that time and you will not find one person that didn't suggest Oil prices were going down and would stay there for a long time. That move alone will cost them millions in FY 2016. We'll see what the impact is in the financial statements - but not until FYQ1 results. How they could possible worry about fuel prices going up during FY 2016, in Oct 2014 is well beyond my comprehension. That's not risk management, that is folly. Waiting to convert the dividend until the $dollar tanked will at least save the company money (so while bad for shareholders dividend, it at least stays in the company), but these hedges take money out of the company. Not smart in my opinion.