The quality of ABY's profit in the first half was not fabulous ( a messy result of EPS of 4 cents) given copper prices were around $9000-9500 per tonne for most of the the first half of this financial year.
Copper prices were about $7000 per tonne in Dec Qtr and about $8000 per tonne in March qtr. Therefore in the second half of FY12 we must be looking at a loss!!!! - - - - if you read their half yearly results and ideahari's post, your question will be answered. ABY sold close to 80% of the first half production at around $3.20 cents (but CU was traded only for a few days at around this price). price of the product is decided only when the output reaches its customers port and as correctly pointed out in ideahari's post, close to 80% of their production reached reached at the wrong time. Second half of the year is worth watching. We will get the reports on 30th April. ABY releases everything exactly on the last date. (in my opinion they will post close to 9/10 cents EPS).
Also -why did the CFO resign 3 days after the books were closed on 31/03/2012?? An unusual time to leave - maybe conflicts with mgt about accounting practices? - - a company which is least bothered about the shareholders is ABY. So I doubt they will bother even to a little extent to play around with the a/cting policies. Tell me on one instance they updated their shareholders about how they are going to handle the excess cash they have got or any update on the acquisition they are talking about for the past little more than 2 years?(but they are paying good amount of money to citi and other investment bankers every year in relation to this). When they are not bothered about the shareholders and their values, I really doubt they will take the pain to play around with the accounting policies.
One positive aspect is the parent company. Aditya Birla group in india headed by Kumara Mangalam Birla is known for all good reasons and good practices. They are no way close to any scam. V clean chit so far and it is one of a very major groups in India.
Also the group's need for copper and other base metals will give a very good apitite for an acquisition or merger in the coming years (at least let us hope so).
Cheers
ABY Price at posting:
68.0¢ Sentiment: LT Buy Disclosure: Held
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