If anyone understands yesterday’s Macquarie
Airports results and can explain them in plain English to a simple country boy,
please let me know.

A quick and incomplete sampling of the
fishwrappers indicates that most coverage came straight from the Macquarie press release with
no-one game to dig into the actual figures to try to work out what they really
mean. If you just have a working journalist’s knowledge of figures, I can’t
blame anyone for that – have a look at the preliminary final report here and you’ll see what I’m talking about.

The result though is stories like this
that say MAp’s bottom line earnings jumped 24% to $1.08 billion.

Somehow or other, I’d rather think the
“bottom line” would be after little things like finance costs, in which case
profit fell 22.7% to $670 million. Bit of a difference in
interpretation there.

However, I can’t claim to know what MAp’s
situation is. Before my head began to hurt and I needed a little lie down, I
almost began to think the management might like it that way as it’s pretty much
par for the course.

One of the many examples of MAp’s lack of
clarity, if not obfuscation, is this
announcement
that Macquarie was bidding for the rest of Copenhagen Airport –
they manage to never mention how much the total price might be, only that
“total funding” from MAp would be in the range of $320-$500 million, depending
on the level of acceptances.

The missing figure of how much actually
buying all the private shares might be was $1.55 billion according to the SMH.
But Reuters says Macquarie made a $2.5 billion bid for Copenhagen – but
that presumably would be the amount if everyone but the Danish Government
accepted.

Confused yet? Well yesterday’s figures show
a $3.87 billion surge in MAp’s total assets. “This increase relates primarily
to an additional 49.1% in Copenhagen Airports, including a 38.1%
interest on 19
December 2005 following the completion of
the successful tender offer.” Total liabilities grew by $2.5 billion,
“primarily” reflecting the Copenhagen deal.

So, taking a wild stab at it, it seems MAp
has yet again waved its magic wand and plucked an extra billion or so out of
the revaluation air. Maybe it works on the basis that something is worth more
just because Macquarie owns it. I don’t know. All we can be sure about is that MAp has to
borrow money to pay its dividends.

There’s an adage that you shouldn’t invest
in what you don’t understand. To that I’d add that you shouldn’t invest in people who
can’t clearly and simply communicate their business essentials.

Peter Fray

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