MCC 0.00% $16.01 macarthur coal limited

hedge position, page-3

  1. 1,015 Posts.
    In my opinion, MCC has calculated their hedge loss for projected 2009H1 profit, i.e, the receiving US dollar is fixed to 1/0.9016 AU dollar.

    It is reasonable since their running cost is $80/T, if the contract coal was sold for US$140/T, then $150M profit is still achievable based on a 2MT of coal sell in half a year.

    The current hedge book is till June 2009, hopefully MCC will not hedge anymore. Accually most companies lost huge money in hedging, like Newcrest in Gold, Beach, AED in oil.

    If steel companies cut their demand in MCC coal, then MCC may have to pay back hedge loss if they can not make US$477M coal sell till June 2009.

    If MCC does not make a money in 2009 due to hedge loss, current share price is still dirty cheap and MCC is a world class coal company.

    Cheers

 
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