I just had a look at the annual report with particular focus on heges. From what I read: KZL only hedges some of its commodity production or FX exposure in the following year or half-year (which is a common risk management practise). Having said that, given the hedges in place, the company still suffers around 2.2M had the AUD appreciated 10%.
Material prices, input costs, FX and interest rate all affects the company's reserve value (quite significantly)and from a balanced view after taking the upside and downside I think: this company has to leverage on soaring commodity prices to be successful in the long run, low margin means greater leverage and larger fluctuations---kind of FMG style :) I like it, valuations: don't know yet, need a few days to scrach it out of my excel. But from a trader's perspective I need some good TA entry point, no immediate chance for entry so far.
KZL Price at posting:
69.0¢ Sentiment: None Disclosure: Not Held
