The hedging dilemma is an interesting one. The pro-hedging view,...

The hedging dilemma is an interesting one.

The pro-hedging view, as Joe covered, is essentially that WDS's expertise is project management and they want their results to reflect their success at executing production rather than reflecting market volatility that they don't control.

Not sure if this is the basis of your personal view, but the anti-hedging view is usually that there is a friction cost to hedging so if WDS has an exact 50% win/loss record on their hedges their expected value is still negative. Given they are a megacap and should have the balance sheet able to withstand volatility, from a purely mathematical standpoint they are better off 'self-insuring' by not hedging.

Where that pure maths view would be wrong though is that it's too limited in scope if it doesn't look at higher order impacts, as financial markets all reward stability. The earnings stability provided by hedging quite possibly improves WDS' credit rating and so reduces their cost of capital from lenders, it also supports their SP as instos like super funds want reliable returns, so WDS can also raise equity at higher multiples.

It's near impossible to quantify these things precisely but it wouldn't surprise me if a holistic calculation found that hedging is a net positive for them even without them timing it well.