Relative to CNP, CER is in reasonable shape. There are still a number of obstacles, like property revaluations, SuperLLC and some debt reduction to overcome though. Either way, it now seems highly likely that CER will survive.
The fact that CER paid out $30m in dividends to shareholders last half is a very positive sign. They would have incurred some sizeable expenses during the year, such as advisor and refinancing costs but these are likely to be non-recurring.
December saw a $260m loss but $50.3m of this was due to a one-off acquisition cost written off and $206m due to a loss on the value of derivatives. We will doubtless see some severe property revaluations this half but it's important to remember that all the US properties were revalued at Dec 31st so we will be looking at the 6 month changes only. We should also be interested to see if any of the $164m loan from CNP was paid off during the half, which would be a good sign.
I still maintain that if CER was not associated with the 'Centro' name, it would be trading at a significantly higher SP than it currently is based on the underlying strength of the company and the fundamentals. This fact should come through in the upcoming YE results.
CER Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
