Originally Posted by
Snoopy
The true believers see what they want to see - $42m - dangled in front of them and swallow it. That $42m is not indicative of what might be achieved next year. The equity earnings from associates looks like it will drop to next to nothing next year, for example. The 'fair value adjustments' are usually a lottery so I disregard those. And as for the non-operating items. Unfortunately you can only sell 4Season's Feeds once.
But are you suggesting the below the profit for the year items might derail things going forwards?
A $5m gain on closing the gap on the defined benefit liability is all about the pension plan isn't it? I know PGW Pensions have been an issue for a while. But those schemes have been closed to new employees since 2000. PGW knocked $3m off their future liabilities by changing from a post tax to a pre tax discount rate when valuing the future payout streams. Good stuff. Who said accountant's can't add value? The deficit in the pension plan is still $13.5m. But that deficit is narrowing. If you believe in trends, the deficit is on track to being wiped out.
Foreign currency differences? They wiped out $7m, but I assumed this is something to do with the rising New Zealand dollar. I guess it can't keep rising forever!
Overall, no I am not overly concerned at the below Profit for the Year adjustments. I think of it more as an exercise in swings and roundabouts. Even if the roundabout falls over, I feel there is enough equity in PGW now to clean up any mess.
I am concerned with all those one offs above the highlighted profit for the year though!
SNOOPY