LYC 1.30% $7.61 lynas rare earths limited

pyrot wrote: Another good thing for us is that any economic...

  1. 1,176 Posts.
    pyrot wrote: Another good thing for us is that any economic crisis would cause the $AUD to plummet leading to higher $AUD revenues and according to my question in the conference call, lower costs (although I'm not sure how exaclty).

    I think a lot of people wonder about this. My understanding is that costs are paid in AUD's and Malaysian Ringgit but cash is held and earnings are reported in USD. So if the AUD and MYR go down against the USD you will have more AUD'S and MYR's for each USD of revenue you earn or hold as cash. So your cash covers more expenses if your USD strengths.
    Likewise, if the USD weakens, it takes more USD to pay your AUD & MYR expenses so your costs rise based on the currency exchange.
    I think if you picture Lynas holding its cash as USD and you see a Mount Weld employee being paid in AUD it makes it easier to understand.
    Lynas also hedges its currency costs too. But I'll leave that for a better teacher than me.
 
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