Pg 47 of the company financial statements contains a sensitivity analysis in relation to currency movements. It states that a 10% strengthening of the BRL against the USD would if everything else remained equal result in an increased profit of $7m. Conversely a 10% weakening of the BRL against the USD would have the opposite effect.
I note that the average fx rate noted in the accounts for the year was 2.34 and the spot rate at 31 Dec 14 was 2.68.
The BDR Currency Update Announcement dated 10 March 2015 states that approximately 90% of BDR's site based costs are denominated in BRL - this is having a positive effect on the profitability and cash flows from the gold operations. It was stated in the announcement that BRL vs USD is 3.13 being a ten year high (representing USD strength) with the announcement noting the higher revenue and cash flow generated due to this.
I am a little confused how to interpret each of these currency related matters. Has anyone else considered these statements and are they able to explain what each one means.
I also note on Pg 46 of the financial report that a receivable of $6.2m is due for iron ore by product receivables with $4m of this aged between 91 and 360 days old from 31 Dec 14. Does anyone know who this receivable is from and the current status of the debt.
Any information appreciated.
For disclosure purposes I have been a holder but sold recently.
DYOR.
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