BHP numbered for historical revisionism

It surrounds the Ravensthorpe Nickel Project, initially a $1.8 billion project to build a new mine and processing facility to produce a "mixed nickel and cobalt hydroxide intermediate product", known in the business as "MHP", over the next 25 years.

That $1.8 billion budget, unfortunately, proved a little optimistic - the whole project has been running hugely over budget and far from schedule for some time.

You only have to take a peek at BHP's investor presentation from December last year, entitled A Matter Of Value, to see just how Ravensthorpe had blown its budget. And again, in another investor presentation from April 30 this year, in which BHP conceded that Ravensthorpe was both over budget and behind schedule.

We've included a few slides from those presentations to show just how far over budget Ravensthorpe had climbed.

But something magical seems to have happened since then - Ravensthorpe is back in the "black", so to speak, and is now both on time and under budget in the latest results presentation put out by BHP.

Indeed, it has been constructed for $2.09 billion, $110 million under budget. Yet, even for the mathematically challenged, $2.09 billion seems a touch above the original forecast of $1.8 billion.

So, what was the magical formula? A footnote explained it all: "as per revised budget or schedule".

With the simple stroke of a pen, some of the money the Chinese economy has been putting into BHP's coffers over the past 12 months was slid across the ledger and into Ravensthorpe's costings.

It's now below a "revised budget" of $2.2 billion.

If only newspaper editors could be so accommodating with their deadlines.

By Acronymous

AMERICA is not just the land of the free, but also the land of the puzzling acronym.

US corporate culture has given us the CEO (chief executive), the VP (vice-president), the DVP (deputy vice-president), the EVP (executive

vice-president) and even the DEVP (deputy executive

vice-president).

It's a little hard to stand out among all the VPs and DVPs, but US-based Macrovision has a title that's hard to beat.

One Richard Bullwinkle is listed as the chief evangelist.

Which not only suggests that the company, which provides copy protection encoding for DVD movies and video games, has some form of gospel that it wants to preach to the world, but that the Reverend Bullwinkle also has a whole team of subordinate evangelists working for him.

The term is, apparently a relic from the boom days of Silicon Valley, when companies employed staff to spread the technology word to the world.

Macrovision's chief evangelist will be a keynote speaker at the CONNECTIONS Europe Summit in Berlin later this month, where he can hopefully spread the US penchant for brevity of job title to the Germans.

Deutsche Telekom's guest speaker at the event is Klaus Milczewsky, who is listed as the company's "senior manager for innovation management, technology management products & innovation, Home Gateway initiative".

That must be one mighty business card.

A question of balance

THERE'S an amusing line on the website for Golden Door Spas, the health retreat of choice for some of Australia's better-paid CEOs.

Apparently the luxury sites are a "haven of relaxation and healing". Unless, of course,

you happen to be the group's banker.

Listed Cypress Lakes Group is the holding company that owns the Golden Door chain, whose retreats are proving to be far from a haven of relaxation and healing for the balance sheet.

In a results guidance statement to the Australian Securities Exchange, the Cypress Lakes Group board informed the market that, "based on recent valuations from independent valuers, whose reports are yet to be completed, the company's assets are in current market conditions worth substantially less than the prior year".

Ouch. The company has been hit with an $8 million write-down of its assets. As the credit crisis worsens, fewer of those well-paid CEOs seem to be taking a health break - even though they probably need it - which means a trading loss of $2 million.

All up, it means a loss of $16million this year across the group, which also owns Cypress Lakes Resort in the Hunter Valley.

The news gets worse: "As a consequence of the revaluations and the anticipated loss, the company is in breach of several loan conditions set by its bankers and is currently in discussions to obtain a waiver of these conditions".

Just think of it as the property version of a margin call.

The answer, the board hopes, lies in a refinancing deal - and we all know just what a generous the mood the banks are in right now.

Cypress Lakes Group, which was trading around 11 cents in February, last closed at just 4 cents.