re: worth keeping a eye on, page-4

re: worth keeping a eye on Todal

firstly i am a holder of bnb and bbp.

Yes in the current situation NTA and NA are not true indicators of the future potential (as for most if not all other Infrastructure assets).

For the same reasons I discount P/L due to non cash writedowns etc, the same applies to assets revaluations that add to the p&l but not underlying cashflow.

Without managing cash effectively all business will fail. Therefore by the process of elimination I am looking at current and forward cash flow projections for BBP as an indicator as to the current and future viability of BBP. oh and of course the access to debt to fund expansion (we had a little issue a few months ago on this one)

Lets discount the sour grape view of fees paid to bnb (yes i am a holder) that was yesterday and cannot change.

Yesterday 2008 FY EBITDA of 331m
Tomorrow 2009 FY EBDITA of 350m+

Net debt post sales proceeds as at 30/6/08 $3b, interest rate at 8.5% = $255m leaving approx 100 pre tax underlying profit.

Rough yes but tells me the underlying business is sound and assuming no involvment with bnb this year no fee. Interest rates are on the way down (imho) further reducing the debt cover.

My biggest risk at this point is sales of assets for debt reduction sake only and rolling over of near term debt and assuming positive support on both fronts then i see .50 sp near term and $1+ medium