Sunday, September 21, 2008
I mailed MIIF my queries during the recent major selldown and I was pleasantly surprised by the warm response by their VP with regards to my queries.
Just for sharing purposes with what I can still remember.
Macquarie bank bas 11% shareholding in MIIF and the directors in MIIF are all on contractual basis. Even if Macquarie Bank in Australia does collapse, MIIF is still independent on itself.
Last year, when the Script Option was announced, only about 20% of the shareholders took up script. That, being said, means that even with script offered, the dilution of current shareholders is not strong, rather, it is not much of a concern.
MIIF takes pride in distributing 100% of its net profit to shareholders and as the CP terms it, is to prevent laziness. With regards to not keeping profits for asset purchases. he gave the explanation that there is sufficient debt facility which MIIF has access to and the returns from the investments will more than enough repay the interests generated. Not forgetting the fact that MIIF has assets that has been set aside ready for sale to generate cashflow, if need be.
With regards to its last div payout, MIIF is generally in a good financial position, although it seems that they have declared above what profits that had been reported in 1H2008, which is not the case. From Jul to Aug, MIIF did received another cash inflow from its operations. As reported in 1H2008, revenue from its new acquistions will be reflected in the 3Q report.
Recent movements in share price could be due to speculations and hedge funds movements. Fundamentally, MIIF is still there same.
This is what I can remember of the conversation I had over the phone. I've have yet verified the statements nor am I going to do so. I've already lowered my average cost and looking forward to the 3Q report and the 2H2008, which will reflect their major movements this year.
2 comments:
Hi
just read your post on miif... as with you i do have a substantial holdings in it. due to its rather drastic drop, i contacted investor relation myself 10-oct-2008 with some queries i have. weicheong its investor relation is a pleasant guy enough.
i posted my comments in www.investmentmoats.com. it is also reproducted on channelnewsasia.com forum.
miif seems to me suffers from a image problem being the child of macquarie. actually, miif also mentions to me about miif being independant & does not collapse just because its parent is in trouble. infact, if required, current managers can be removed by way of vote in egm.
quote***
I just got off phone with investor relation re the following queries:
a) why report ebitda & not netPL
he says infrastructure assets are very large ticket items & miif is interested & to intend to show to public their ability to generate + increase operating profit. showing only net PL would not be able to achieve that
note also “Investments in Asia generally pay distributions out of accounting profits” therefore this lessen worry about assets paying dividends out of their capital
b) acquisition of asian assets
he reiterates again opportunities pipeline is very strong however as the world has changed it is very very difficult to make accretive acquisitions in excess of trading yield; therefore that has been kiv for now
c) pay dividend more than net PL
miif declares div to be paid of ~44mio however net pl (adj) is only 30.8mio how is this possible? he says this is a timing issue: since 30jun, miif has received additional 40mio from assets therefore will be more than enough to cover div payment
d) performance of 2008
as per announcements, he expects strong performance for 2008; at the minimum, the net PL (adj) would be similar to 2007; considering the financial tsunami that 2008 has, this is very commendable
e) final last words
before hanging up he repeats & stress the official words that miif assets are operating very strongly; business is as per usual; debt at asset level is negligible; all in… it’s in good shape
***quote
Great conversation.
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