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?