PRESS DIGEST: Australian Business News: Aug 24 07:06, Thursday, 24 August 2006
(Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Brambles Industries will undertake a US$2.2 billion (A$2.9 billion) share buyback after it merges its Australian and British listed companies in December. This completes the group's landmark US$3.6 billion capital management program that included the sale of its Australian waste-management division in June. Chief executive, David Turner, yesterday reported a 'momentous' 16 per cent increase in net profit for the CHEP pallet maker last year, posting just under US$1.5 billion. Page 15.
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The over-production of grapes in Australia will continue until 2009, warns McGuigan Simeon Wines , after the winemaker crashed to a loss of A$11.5 million on its second write-down in three months. McGuigan yesterday cut the value of its wine inventory by a further A$15 million, following a A$26 million write-down in May. Chief executive, Dane Hudson, said he hoped the result was the company's low point, but he could not provide any guarantees because of a sharp decline in the bulk wine market over the past six weeks. Page 15.
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Blood plasma provider, CSL , expects its successful cervical cancer vaccine, Gardasil, to generate up to A$50 million in earnings this financial year. CSL yesterday posted a full-year net profit of A$117.4 million, down heavily on the previous year. However, the accounts included a liability of A$328 million owed to Sanofi Aventis for the purchase of its blood plasma division in 2004. CSL forecast revenue growth of six per cent in the next 12 months, on a 10 per cent increase in blood prices during 2006. Page 16.
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Virgin Blue Airlines is considering offering flights to Asia as it looks to improve the profitability of routes to the United States by launching a full range of long-haul services. Chief executive, Brett Godfrey, said yesterday he might use Australian Workplace Agreements for staff on the services, following a similar move by Qantas Airways offshoot, Jetstar International. Virgin Blue reported net profit of A$84 million for the nine months to June, 12 per cent higher than the comparable period in 2004-05. Page 20.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
James Packer's Publishing & Broadcasting Ltd (PBL) plans to buy his family's stake in a group of British casinos as a prelude to a push into the European gaming market. PBL yesterday posted A$610 million for 2005-06, up 25.6 per cent on the previous year, with earnings from gaming nearly on par with those from the group's media interests. The Packer family's Consolidated Press Holdings jointly owns three small British casinos, including London's Aspinall Club, with local casino heir, Damian Aspinall. Page 19.
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Woodside Petroleum's A$915 million Chinguetti project off Mauritania has suffered another setback after junior partner, Hardman Resources, revised down recoverable oil reserves by 50 per cent. Chinguetti is producing an average 35,000 barrels a day, compared with a plant capacity of 75,000 barrels, and will be subject to a comprehensive review. The news follows a military coup in the West African country last year, which led to forced revision of the profit-sharing arrangement between Woodside and the Mauritanian Government. Page 19.
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Clothing manufacturer, Pacific Brands , yesterday reported an annual net profit of A$101.2 million, up only slightly on the A$100.9 million a year ago, despite a sustained cost-cutting program. Chief executive, Paul Moore, attributed the flat earnings growth to rising fuel prices and interest rates, which had dampened the 'retail landscape' overall. 'Given the tougher business environment...we have continued to focus on managing our costs,' Mr Moore said. Pacific Brands' labels include Berlei, Bonds and Holeproof. Page 21.
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Packaging group, Amcor , has announced further plant closures and warned of difficulty in recovering higher input costs, despite posting a 43 per cent increase in annual profit to A$351.3 million. Chief executive, Ken MacKenzie, said the company would spend A$300 million restructuring its Australian fibre packaging business over the next four years, including the closure of a recycled paper mill in Western Australia and a cardboard box plant in Melbourne. This would offset raw material and energy costs 'outside our control,' he said. Page 21.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Hutchison Telecommunications has reported a half-year loss of A$525 million, blaming stronger competition in the mobile-phone market and one-off costs associated with upgrading its mobile network. The net debt held by Hutchison increased by A$347 million to A$3.34 billion as of June 30, prompting concern from analysts about its ability to service the borrowings. 'We really are seeing that debt explode; it's just going to cripple them,' Ovum analyst, Nathan Burley, warned yesterday. Page 24.
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Macquarie Airports (MaP) expects retail and parking spaces at its two biggest airports, Copenhagen and Brussels, to boost annual earnings and offset the effect of higher fuel surcharges and tighter security. MaP, which also operates Sydney Airport, yesterday reported a 29.5 per cent increase in first-half profit to A$203.7 million. Chief executive, Kerrie Mather, forecast earnings growth of nine to 10 per cent for the full year, and revealed plans to increase MaP's holdings in Sydney and Brussels by 15 per cent and 1.9 per cent respectively. Page 24.
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Mortgage broker, Mortgage Choice , warns that another interest rate rise will further burden New South Wales' economy and may require rates to be cut next year. Chief executive, Paul Lahiff, reported a 43 per cent jump in annual profit to A$17.9 million last year, but predicted a 'very competitive and challenging housing finance market' ahead. If the Reserve Bank of Australia raises rates for a third time this year, 'they run the risk of having to cut rates in 2007 because they are really putting NSW and Victoria in a bit of trouble,' Mr Lahiff said. Page 25.
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Telstra's BigPond Internet unit is generating annual revenues of A$30 million from its movie, music and gaming download services and managing director, Justin Milne, expects the figure to increase to more than A$250 million within five years. Australia's biggest Internet provider will sign a deal with a second Hollywood studio next month, doubling its catalogue of film titles for rental downloads. Mr Milne revealed BigPond's streaming numbers were 'a bit under two million' a month. Those volumes would double by mid-2007, he predicted. Page 27.
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THE AGE (www.theage.com.au)
Incoming AXA Asia Pacific chief executive, Andrew Penn, is free to take up his new appointment after the Administrative Appeals Tribunal overturned a ban imposed by the financial services regulator. The Australian Prudential Regulation Authority (APRA) had attempted to disqualify seven directors of AXA's Australia Staff Superannuation Plan, including Mr Penn, for allegedly altering payment schedules and failing to disclose the changes. AXA chairman, Rick Allert, last night called for a review of the APRA. Page B1.
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More visitors to its websites and increased advertising spending by real estate agents helped property website, realestate.com.au, nearly double its revenue last year. Net profit for 2005-06 rose two per cent to A$8.2 million, but that result was skewed by A$1.6 million spent on a takeover defence and a A$6.4 million alteration to a tax bill, managing director, Simon Baker, explained yesterday. Mr Baker said a 134 per cent increase in gross profit was a better measure. Page B2.
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West Australian explorer, Jubilee Mines , yesterday posted a record A$103.36 million for 2005-06 on the back of soaring nickel prices. The result demonstrated the 'substantial margins that can be generated from a high-grade, low-cost nickel sulphide operation,' said chairman, Kerry Harmanis. It would also allow the company to expand its operations and double production within the next five years, Mr Harmanis said. Jubilee is the sole operator of the Cosmos South nickel project in the Kathleen Valley, 40 kilometres north of Leinster. Page B2.
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Economic momentum will build over the next three to nine months, according to a broad measure of economic activity. The Westpac-Melbourne Institute Leading Index of Economic Activity rose to an annual rate of 5.3 per cent in June, up from 4.5 per cent in May, presenting 'a healthy outlook for economic growth.' Westpac senior economist, Huw McKay, said the result reinforced his prediction that the Reserve Bank of Australia would lift interest rates by another 25 basis points in November, taking the cash rate to 6.25 per cent. Page B2
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