Concordia Healthcare Corp. T.CXR.R

Fx Hedging

[dudsywow]

Just had a listen to the conference call.  I thought the responses on Fx hedging were easy to understand...  some Euro costs (manufacturing, etc.) offset with some Euro revenue; essentially a wash.  GBP costs (hard costs, debt, etc.) partially offsets GBP revenue; so a net GBP long exposure that they do not hedge.  So overall, CXR is long US$ and GBP.

My only concern was the US revenue for the quarter... however looking at historicals this can be rather lumpy compared with the AMCo revenue.  Also sounds like they had some Plaquenil and AG supply issues that have been resolved by March.  The AMCo revenue was surprisingly strong so I'm less concerned on the AMCo side... just keep a close eye on the US numbers to ensure they continue to grow that business over the next several quarters.

[Health123]

The question came up a number of times and touched on by a number of analysts most are concerned with the pound weakening like what happened with Greece's currency in the fall when there was talks of Greece leaving the EU.  Martin Landy from GMP Securities was the most pointed in his question.  Here is what was said and people on the board can decide for themselves if this is going

[argentia77]

Everytime I see the Brexit I'm reminded of the company Bre-X and MIchael de Guzman.

[digitel]

This post has been removed in accordance with Community Policy

[dudsywow]

It's obvious that CXR is net long both US$ and GBP.... that's the exposure you 'own' if you want to hold CXR.  If you think you're smarter than all the global currency traders with respect to the future direction of the pound, then you should be trading Fx, not spending your time fear mongering on sites like this.  Fx is just one of many many risks we wear as part of

[Health123]

Hi Dudsy, your point is well taken.  My intention is to have healthy discussion only.  You are absolutely correct in your statement that Fx is one of the many risks we wear as Concordia shareholders .... especially with headwinds of Brexit at the forefront.   Frankly, it just came as a shock to me to hear that we were not hedged Euro/Pound as I expected this risk would have been

[sunshine7]

Much of cxr debt is denominated in be pounds. A devalued pound is beneficial in that regard is it not?

[dudsywow]

Their interest payments in pounds are less than their revenue in pounds, so a devalued pound is net detrimental. However, nobody knows long-term how any currency will trade.  Anyone who thinks they can forecast this is deluding themselves.  You just need to understand that owning CXR gives you some exposure to GBP and some US$.  Within a diversified portfolio, thats not a bad

[Health123]

Sunshine and Dudsywow,   I agree that we cannot forcast how currency will trade and as a global company this gives us additional risk.  Although I can not speak for him, I think that Mr. Landry (the CIBC analyst) was more concerned at Euro / Pound hedging (since AMCo's revs are in pounds but costs are Euros) as this is what would pressure margins.  There isn't that much room

[dudsywow]

As a global company the additional currency exposure Concordia has may increase or decrease your personal risk depending on how your portfolio is structured and what type of currency risk you want to have.  It's not necessarily more risk unless you think having 100% US$ exposure is always optimal.  Hopefully you can understand this. Also, you've very conveniently left out the

[Investor198]

LOL she's very sneaky bit*ch - put her on ignore As a global company the additional currency exposure Concordia has may increase or decrease your personal risk depending on how your portfolio is structured and what type of currency risk you want to have.  It's not necessarily more risk unless you think having 100% US$ exposure is always optimal.  Hopefully you can understand

[dudsywow]

Will do.  My mistake to get sucked in.

[Health123]

Give me a break here.  I was going my memory not a transcript and if the Euro weakens it will have the opposite effect and I did say that if the Euro weakens or strengthens.....  and time will tell if this will be a significant headwind or not.  I think that Brexit will be a risk.  The CIBC analyst felt like it was important or he wouldn't have selected it as one of his

[Kazinsky]

Dudsywow, This has nothing to do with how your personal porfolio is structured.  There is a risk that stems from the mismatch between AMCo costs on Euros and AMCo revenues in Pounds.  An exact "wash" is unlikely.   [I think that may have been the spot where there was an awkward silence on the conferrence call after it was said.] The effect will be on the company's

[dudsywow]

Have a look at the call transcript.  Kreppner on the conference call said "so you have Euro denominated revenues as well as costs and those are essentially washed, so it almost takes the Euro out of the equation"  Sounds to me that they're not really exposed much to the Euro. However, they are definitely exposed to GBP and I agree with you that the earnings in US$ can be

[sunshine7]

They could select which debt for accelerated payment based on currency cycle? quote=dudsywow][ Their interest payments in pounds are less than their revenue in pounds, so a devalued pound is net detrimental. However, nobody knows long-term how any currency will trade.  Anyone who thinks they can forecast this is deluding themselves.  You just need to understand that owning CXR gives