Channel Infrastructure NZ Limited

[SailorRob]

How do you think BRK will go without Munger? And when the time comes without Buffett?

Munger will make no difference at all, he had very little to do with anything over the last 20 years.

Buffett has spent 30 years preparing the company for when he's no longer around, as Munger often said they could have done 3 times as well if they weren't so massively conservative so you might see them push some more float out into equities and maybe they won't get the epic deals that people give as selling to Buffett but NET you won't see the difference or if you do it will be positive.

If the share price drops on his death or stepping down then depending how much it falls it will lead to much higher returns.

[Bikeguy]

Well don't ruin it now by doing stupid stuff, if you have any skill or knowledge whatsoever you would not touch this dog with a long pole.

Even with massively sub par returns over 56 years if you save and invest enough you will have done well.

Please, look at the financial statements, look a how much capital they have taken in and what they are doing with it. Look at the revenue and the margins, look at the debt. Look at the management.

You have 60 odd thousand companies you could invest in. Why this??

You have clearly spent a lot of time assessing this company, thank you….do you have any thoughts on why CHI has seen such a rise in share price over these past couple of years?

[SailorRob]

You have clearly spent a lot of time assessing this company, thank you….do you have any thoughts on why CHI has seen such a rise in share price over these past couple of years?

Yes because it has been 'repriced' as a terminal infrastructure asset that can levy a toll on a pipeline and has an economic moat in that another pipeline cannot be built.

If it didn't have the debt associated with the old business attached to it and the costs of dismantling and cleaning the original site and some decent management then one could see why.

Ultimately people are looking at fuel terminal businesses elsewhere and applying the same logic to this one.

The amount of capital they are still pouring into the business is astounding and the pathway to earning a return on this investment is very far from clear. Just the fire systems that they are installing are costing years and years of best case profits.

Why would Mobil sell down their entire stake?

You can say earnings are whatever, but when you are spending multiples of one years earnings each and every year on capital expenses and borrowing to do it, you have to be certain that in future this investment will generate a return sufficient to satisfy the debt holders and then the equity - that's AFTER also accounting for the maintenance spending on the assets that have been built.


Look at the cash flow statement and pretend you own the entire business...

Look at the half year They are supposedly earning 11 million in 6 months off assets of a near a billion and spending over 30 on 'investments'. It's ludicrous.

Remember to create value they need to generate HIGHER returns on all this capital expense than their cost of funds...

[SailorRob]

Until this business actually exists as a terminal with normal CAPEX and not doing all this growth rubbish and the actual maintenance Capex can be seen and we know the costs of the old site (won't know this for a long time) so everything settles out and we can see steady state contractual earnings and normal expenses and we know then what the debt is and the cost of it etc etc we cannot price the equity.

Too many moving balls and we know how they always move - to the money incinerator.

Percy out of his mind buying the Wife shares of this dog.

Share price can do anything in the short term, for may years this traded at a premium while it lost money hidden by accounting practices that allowed a lot of things to be capitalised that were in fact losing money before they were even built, then boom all yer money is gone.

[Rawz]

debt/debt+equity= 37% for this bad boy. Too close to my 40% rule

[Rawz]

Until this business actually exists as a terminal with normal CAPEX and not doing all this growth rubbish and the actual maintenance Capex can be seen and we know the costs of the old site (won't know this for a long time) so everything settles out and we can see steady state contractual earnings and normal expenses and we know then what the debt is and the cost of it etc etc we cannot price the equity.

Too many moving balls and we know how they always move - to the money incinerator.

I looked at their most recent presentation last night and your post has succinctly summed up exactly what i was thinking.

[SailorRob]

debt/debt+equity= 37% for this bad boy. Too close to my 40% rule

Your rule is absolutely stupid and totally irrelevant.

Prior to the write downs what was the equity 'value' that your rule would have looked at??

Get your head out and start doing some real analysis

Apple debt to equity is too high for your stupid 'rule'

Get with the programme.

[SailorRob]

I looked at their most recent presentation last night and your post has succinctly summed up exactly what i was thinking.

If you were thinking along those lines then you way too smart to use a stupid debt to equity rule.

The equity of the old refinery was one day x and another day y.

Your rule could have killed you.

The stated book value of equity means nothing.

[Rawz]

Your rule is absolutely stupid and totally irrelevant.

Prior to the write downs what was the equity 'value' that your rule would have looked at??

Get your head out and start doing some real analysis

Apple debt to equity is too high for your stupid 'rule'

Get with the programme.

Lol, dont worry about it

[SailorRob]

Lol, dont worry about it

Sorry for being harsh but damn this is about more than some arcane accounting ratio that has zero place in the real world.

It's debt to the assets ability to sustainable earn cash returns after all expenses that matters.

Some of the bet companies in the world require no equity.

Some of the worst are loaded with 'equity' that is worth nothing.