Chapter 1: What is the main topic discussed in this episode?
Welcome to Fear and Greed, business news you can use.
Chapter 2: What caused CSL's $7 billion write-down?
Today, Blue Chip CSL announces one of the biggest write downs in Australian corporate history. Prime Minister Anthony Albanese defends changes to the capital gains tax discount set to be announced in tonight's budget. And outdoor advertising company Omedia finds itself at the center of a bidding war. Plus, it looks like the globe is heading for a super El Nino, meaning more droughts in Australia.
And beer is back with brewers claiming a turnaround in sales. It's Tuesday, the 12th of May, 2026. I'm Nadine Blaney from Ausbis. Good morning to you, Sean Elmer.
Good morning, Nadine.
The main story this morning, CSL has shocked investors by writing down the value of its assets by $7 billion, and that includes its VIFOR kidney treatment subsidiary. It also cut its full year earnings and revenue forecasts. Sean, it is one of the biggest write-downs in Australian corporate history and comes just three months after the company reaffirmed its guidance.
Investors were so frustrated yesterday. Not happy at all. CSL share price cratered. It was down by 16%.
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Chapter 3: How is the Prime Minister defending CGT changes?
So, I mean, here's another one of your fun facts. It's no longer one of the top 10 companies on the ASX. Incredible. $9 billion in value was lost yesterday alone. And over the two years, its market cap has fallen by $100 billion. What?
You just don't see this in corporate Australia.
Chapter 4: What does the bidding war around oOh!Media signify?
I don't think I've seen it for decades. I mean, I don't know that I've ever seen it. I'm sure there are companies that have done something, but not a blue chip like this one. I mean, the only other companies to make such huge impairments have been the miners, BHP and Rio, but that's been expected. They've written down oil, coal and gas assets, so that's not such a surprise.
Yesterday, long time CEO and now chair Brian McNamee was there giving the news he's under pressure to keep his job now. Former CEO Paul McKenzie was replaced abruptly last August and the interim CEO Gordon Naylor doesn't want the job full time.
Chapter 5: What impact will the Super El Nino have on Australia?
CSL is the bluest of blue chips, or at least it was. Established in 1916 as the Commonwealth Serum Laboratories to service the health needs of a country isolated by war. CSL provided Australians with access to 20th century medical advances. We're talking insulin, penicillin, vaccines against the flu, polio, other infectious diseases,
Listed on the ASX in 1994, evolved into three primary divisions, plasma collection, vaccines, kidney treatments. It kind of has been the great success story in healthcare in Australia, or at least it was until about...
Four years ago, thereabouts?
Chapter 6: Is beer consumption really on the rise again?
Yeah, I think it's been a bit of a sad tale over the past four years. Think back to 2020. CSL was the largest company on the ASX. Now, obviously, that was ultimately overtaken by CBA.
Chapter 7: What are the implications of the capital gains tax changes?
But... You know, its troubles, you could say, really began around August 2022. And that's when it bought the aforementioned Swiss-based Vifor Pharma for $19 billion. So Vifor is a company with treatments for iron deficiency, dialysis, and nephrology.
The business initially struggled under CSL's ownership, and I guess, Sean, ultimately, it's just not given CSL the boost it hoped for, and hence that massive write-down yesterday.
Yes. I mean, CSL has been re-rated by investors probably a couple of years ago.
Chapter 8: How has CSL's market cap changed over the years?
When you re-rate, basically professional shareholders look at the company and think, okay, in the long term, the strategy, where it's going, isn't quite what we thought it was. So they re-rate it down. Since then, and so let's say June 2024, it's lost nearly 70% of its value. And in fact, since August last year, about 50% of its value has Alongside the re-rating, it has had a rough trot.
It's disappointed at earnings times and downgraded profit forecasts, but it's had a lot of headwinds. Competitive pressures in its core plasma group has really hurt it. There are other big players out there now.
Falling vaccine rates in the US, that hasn't helped by the Trump administration and Kennedy being the representative, I mean, being an anti-vaxxer running the health department doesn't help CSL. The thing for CSL, it just doesn't seem to have any idea how to stem the bleeding. And pardon the pun. But yesterday was a shocking day for that company. And you're just not sure where it bottoms out.
As you said, $100 billion. So it went from about $150 billion company to what? It's worth $48 billion now. Incredible.
Yeah, and I never thought that I'd be on air, on Ausbiz, speaking with our expert guests, questioning whether CSL represents value or whether it's a value trap, you know. And when you consider that the share price was above $300 not that long ago and yesterday falling below that $100 level, it's extraordinary. Yeah.
I was looking at it. There's only five companies on the exchange, BHP and the four banks, that are worth more than $100 billion. Now, CSL has lost $100 billion in value in two years. So if you want to get a concept about how much it's fallen, that's it. It's wiped out. Any other company bar those top five would be worth zero at the moment.
Well, it contributed to the problems on the S&P ASX 200 yesterday. It fell by about half a percent. Hopes of a peace deal between the U.S. and Iran were dashed by the U.S. President Donald Trump. He called a proposal from Iran to end the conflict totally, and this is a quote, unacceptable.
All in caps, of course, Nadine. Totally unacceptable. All in caps. That, of course, set the tone. Then CSL News weighed on the ball. It's not surprising the health care index was the worst performer. Energy was the best. The price of Brent pushed back above $105 a barrel. The big drivers of the local market at the moment, tonight's budget, and the war in the Middle East, tonight's budget.
We'll find out more about that a little later, well, in a few hours' time. In terms of the war in the Middle East, Donald Trump's visit to China from tomorrow through Friday, where he'll meet Xi Jinping, is critical. Trump is likely to urge China not to support Iran, while Xi Jinping is likely to push for an end to hostilities.
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