CSL's reckoning
The perpetual motion machine is grinding to a halt.
Australian companies excel at the art of accentuating the positive. Ego-driven CEOs love to pump out shareholder reports painting rosy pictures, and downplaying any potential negatives. Euphemism and corporate gobbledegook are the sprinkles on many an inglorious turd. Middle managers are harassed to conjure up underlying profit growth where none exists.
Mostly, they get away with it. But every now and then a major company that has gilded the lily once too often, or perhaps parlayed the odd alternative fact, comes an absolute gutzer. This year that company is CSL, and its shareholders have capital losses of more than $100 billion to show for it.
Last week's confession by CSL that most of its businesses are in the khazi – with revenues and profit margins being crunched everywhere – puts an end to a period of at least three years where the company tried to flim-flam its way out of trouble. The strategy seemed to be: "Just keep talking positively and everything will work out right in the end". It didn't.
