G'day firetechniques,You say:"Judging by annual report I think...

G'day firetechniques,

You say:

"Judging by annual report I think the dropping aussie may take the fire out of earnings"

As Frank Campion would say - "Walk with me"

Firstly - you are exactly wrong. The exact opposite is true.

You quote the annual report as your "evidence". Here is the quote from the Annual report.

"Within the period the historically high level of
the Australian dollar against US$ and Yen has
lowered overall reported revenue. "

Read it carefully. See what it says. The HIGH $A has LOWERED REVENUE. This is the Annual report for the year ended 30th June 2008. They are referring to the fact that during that year the $A was rising and reached a high of almost 98c.

The situation has now totally reversed. The $A is around 68c (vs 98c). So the statement now would be "The LOW $A has INCREASED REPORTED REVENUE"

See ... you don't even need to really think to have the correct information - it is layed out nicely for you.

But for those of us that like to research and THINK, it is obvious that your statement is totally wrong, without even referring to the Directors statement.

The only way that your generalisation could possibly be correct would be if we were manufacturing in the US (or Eu), paying for it with $A and shipping the product back to Australia for sale. The fact is, we sell diddly squat in Australia. Our sales are in America, Eu and Japan. We are making profits on those sales in those foreign currencies. When we repatriate those profits back to Australia and convert them into A$ they give us many more A$. (Just in case you haven't researched anything at all - CST is wholly Australian owned and our financials are reported in A$).

In summary. Every indication is that sales growth has continued in the quarter just ended. The low A$ will enhance the reported earnings.

I apologize (sort of) for being so dismissive about your post but it really gets my dander up when somebody makes a one-line statement that is totally wrong and has no research or, more importantly, THINKING, behind it.