:.write downs dpf and dpfi, page-5

As a large holder of CNP, I too was concerned about the write-downs for DPF and DPFI. I went through some calculations in a previous post I made last week.

I used a similar approach but came up with a different figure:

DPF and DPFI have already reported their December 2007 results, which are here

http://www.centro.com.au/News+and+Reports/Annual+and+Interim+Reports/Annual+and+Interim+Reports.htm

Both funds acknowledge a substantial drop in price as a result of the drop in CER. The DPFI graph looks awful.

You will see that DPF net assets has dropped in value from $2433m in June to $2320m at the end of Dec, or a drop of $113m. DPFI went from $1956m to $1709m, a drop of $247m.

I have made the assumption that the CNP half yearly report will base their equity accounted valuations of DPF and DPFI on the valuations contained within these Dec reports.

Based on a the fact that CNP owns 51% of DPF and 67% of DPFI, I am estimating they will have to revalue the DPF holding by $124m (51% of $247m) and $75m (67% of $113m)respectively, or a total of just over $200m.

Now, there is a caveat here: I think CNP's % holding of DPF changed in the last period - something to do with their holding of CER. This being the case, the reval will be slightly lower.

Thus, I would say the maximum writedown will be in the order of $200m, maybe slightly less. Ouch.

Remember though that CNP withheld $170m of distribution payments from Dec, which will almost offset this - so long as they haven't earmarked the money for something else!

Remember as well that this could be a one off reval. If the CER share price recovers, the write-down will be written back at year-end. Of course, the reverse may also be true.

Please let me know what you think, especially if I have missed something.