The AUD is starting to retrace again hitting 0.689 before. (I...

The AUD is starting to retrace again hitting 0.689 before. (I believe it will be subdued for a long period of time as per previous posts) I’ll have a look at the HY profit forecast again. I can see the thread has been active again in the last couple of days.

The dollar peaking at 0.70 right on 31 Dec will lower the AUD profit for the HY...But unless FMG converted the USD to AUD at this time to put aside the AUD funds for div payment or entered into forward contract, the dividend we receive will likely be at the mercy of the FX markets until around the time of reporting date.

What I mean is say FMG make US$70 profit and AUD/USD at 31 Dec is 0.70

This equates to A$100 profit

If payout ratio is 50%, then dividend is A$50 (if AUD remains at 0.70 at div declaration date)

If AUD drops to 0.66 at the time of reporting date, then they will still payout 50% of USD70 profit, which is USD 35

However, AUD dividend would be A$53, which would still be 50% dividend of USD profit of 70.

The AUD dividend would be $3 or 6% higher as a result of the AUD drop.

It would not affect its financials which are denominated in USD currency

I’m only speculating that FMG haven’t hedged already. They may have an idea what USD they will be paying out already but the AUD will be determined by the currency at reporting date. A lower AUD will hekp