It appears to me MBN biggest problem isn't the nickel price, but rather its Foreign Exchange management.
HY13, Net FX losses $27.8M, foreign currency translation differences $25.75M loss. $52.5M out of total $82.2M loss, 63.8% of loss.
HY12, Net FX loss of $13.6M, foreign currency translation differences $55.8M loss. $72.59M out of total $119.77M Loss, 60.6% of loss.
CY12 Nett FX loss $9.9M. Foreign Currency Translation differences $67.5M loss. $78.97M loss. $521M total, excluding $380M impairment of property, plant & equipment (for simplicity, lol) $141M. 78.97/141= 56% of loss.
CY11 Nett FX Profit $32.8M. Foreign Currency Translation differences Loss ($134.7M). Cash flow hedges $70.5M profit. Fair value transfered $17.7M. $13.7M Loss of $97.2M Total Loss.
Maybe I'm a dumbass, but it seems to me MBN has a Foreign Currency Translation problem.
"Net FX losses primarily resulted from unrealised movements on the translation of non-USD cash held & borrowings."
SURELY THEY HAVEN'T KEPT CASH IN BRASIL REAL??
THEY COULDN'T BE THAT STUPID, COULD THEY?
Cash kept in $US/$A would be performing brilliantly against local Brazilian expenses. Debt in BR would have also been a huge gain, IMO.
AM I MISSING SOMETHING?
My 10 year old, with an hours schooling in TA could tell me we shouldn't be in BR after looking at the chart below. Death Cross Sept11. There's a 6 week window Feb-Mar13 where you could be forgiven.
Some mental giant will probably switch cash to $US now that BR 'MAY' have bottomed.
IMO, DYOR.
Apologies in advance if I'm mistaken.
MBN Price at posting:
2.5¢ Sentiment: Hold Disclosure: Held
