dividend - refer my post re fundamentals, page-6

whether to pay dividend or not depends on:

1. the extent of earnings deterioration in 2009;
2. the level of asset write-downs (given that they have LVR covenant of max. 60% (if I remember correctly).

Importantly, their cash earnings in FY2008 did not deteriorate compared to FY2007, though bottom line NPAT was a negative AUD248mln due to large asset value restatement as per A-IFRS.

Temporary dividend suspension is announced given the current economic slowdown, and also the credit crunch. VPG needs to provide more comfort to its banks, lowering its borrowing cost as well as provide it with flexibility in snapping up cheap assets later.

Obviously, the management is doing the right things.

Suspension as it is, VPG definitely has much better prospects than CER in dividend payment given its lower gearing, stand-alone position, and little influence from the banks.

Its dividend suspension is more of a voluntary choice, rather than forced upon by the banks as in the case of CER, IMO.