abnamro comment

Rec is Hold, High Risk

Comment
"TIM has decided to stand out of the MIS market in 2009. It intends to sell its forestry land portfolio
and selected horticultural assets, to reduce debt and fund future capital obligations. These are
clearly measures to reduce debt and operating cash outflows. We expect annuity revenues to
increase from A$321m in FY08 to over A$400m in FY10, continuing to represent a valuable
income stream going forward. However, in the short term, ongoing capital obligations, working
capital growth associated with past projects, and interest costs (in the absence of asset sales) will
continue to hamper cash flow. Given the uncertainty surrounding the company’s future, we have
little confidence in our forecasts. Our forecasts assume no asset sales, which could prove difficult"

Neil