PRESS DIGEST-Australian Business News - May 31 06:44, Tuesday, 31 May 2005
(Compiled for Reuters by Media Monitors) THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Newcrest Mining yesterday announced that its full year profit could be up to 26 per cent below analysts' forecasts due to problems with its flagship Telfer mine. Newcrest, Australia's largest listed gold company, said full year profit would be between A$130 million and A$145 million, well below the A$177 million outlined in earlier forecasts. The profit downgrade saw Newcrest's shareprice close 10.8 per cent, or A$1.61, lower at A$13.24, its lowest close since June last year. Page 14.
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WMC Resources chairman, Tommie Bergman, yesterday said BHP Billiton could face a challenge in moving to compulsory acquisition because half of the miner's retail shareholders were reluctant to accept BHP's A$9.2 billion takeover offer. Mr Bergman urged shareholders to accept the offer, which expires on Friday, warning that WMC's shareprice would 'fall dramatically' if the BHP bid lapsed. Mr Bergman said shareholders needed to set aside their feelings and make a rational decision on whether to accept the bid. Page 14.
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Parmalat Australia has survived the collapse of its Italian parent and announced it is investing in improving its position in the Australian dairy industry. Managing director, David Lord, said the Australian operation had posted earnings before interest, tax, depreciation and amortisation of A$56.2 million in the year to December 31 and was 'very happy to have come through 2004 with earnings intact.' Mr Lord said losses at the group's Asian operations had fallen from A$8.4 million to A$2.2 million and 'in 2005 we expect to turn a profit out of Asia.' Page 14.
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Qantas Airways executive general manager, John Borghetti, yesterday rejected claims by Flight Centre managing director, Graham Turner, that the airline's decision to reduce commissions to travel agents had led to lower ticket sales. Responding to Mr Turner's assertion that Flight Centre's trans-Tasman booking through Qantas were down 60 per cent and that 'many agents were starting to favour Virgin Blue ,' Mr Borghetti said the fall in Flight Centre bookings was due to a greater take-up of Internet bookings through the airline's Qantas.com portal. Page 16.
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The newspaper industry has launched a three-month review of its circulation audit rules in a bid to counter concerns among media buyers and advertisers that some publishers were using free or heavily discounted copies to boost circulation figures. Audit Bureau of Circulations chairman, Stephen Hollings, said the review would involve a number of audit firms, including the Bureau's own auditor, Ernst & Young, and members of the Media Federation of Australia and the Australian Association of National Advertisers. Page 16.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Stock Exchange yesterday imposed a fine of A$125,000 on Merrill Lynch for trading Promina stocks for its own account in 2003 in a way that suggested market manipulation. Merrill Lynch chief administrative officer, Terry Winder, said the group had agreed to pay the fine and to undertake an education and compliance program, but did not admit to any 'inappropriate trading.' Page 23.
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Macquarie Infrastructure Group has requested an extension on the lease of its first major toll road deal in the United States following cost blowouts and a bid by the San Diego Association of Governments to extend a competing highway. MIG chief executive, Steve Allen, said the company was in negotiation with the Californian government to extend the lease concession on its A$1 billion State Route 125 South toll road in San Diego by 10 years. Page 23.
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Macquarie Communications Infrastructure Group (MCG) is expected to benefit from Federal Government moves to extend the simulcast of analogue and digital free-to-air television (TV) signals. MCG owns the majority of transmission towers that transmit the analogue and digital signals of the Australian Broadcasting Corporation and the Special Broadcasting Service. Communications Minister, Helen Coonan, last week said it was unlikely analogue TV signals would be phased out in metropolitan areas by 2008 as originally planned. Page 23.
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Hutchison Telecommunications chief executive, Kevin Russell, yesterday conceded that a number of third generation (3G) mobile phone subscribers had experienced coverage problems when being moved on to Telstra's GSM network for roaming services. However, Mr Russell dismissed a website report suggesting 65 per cent of 3G users had problems during the changeover, asserting that just 200 of the company's 500,000 users experienced coverage difficulties. Page 24.
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The International Air Services Commission (IASC) has rejected a request by Qantas Airways for a two-year extension to its codeshare arrangement with South African Airways (SAA) due to concerns about a lack of competition and high fares. The two airlines have a duopoly on direct flights between Australia and South Africa. The IASC said increasingly high load factors were acting as an impediment to effective price competition and noted that fares offered by Singapore Airlines on indirect flights were lower, despite the longer journey. Page 24.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
ABB , Australia's second-largest publicly listed grain group, yesterday announced a 71 per cent rise in net profit to A$21.3 million for the six months to March 31. Managing director, Michael Iwaniw, said last year's A$550 million merger with AusBulk had helped to diversify profits and offset declines in ABB's grain marketing operations. Mr Iwaniw said the 'firm results' achieved by ABB showed the integration of AusBulk was 'moving along steadily.' Page 26.
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St George Bank yesterday confirmed it had no immediate plans to outsource any jobs and will remain an Australian-based and Australian-run organisation. Chairman, John Thame, said he hoped the policy would continue, but that nothing could be guaranteed forever in 'a global village.' Chief executive, Gail Kelly, said that the bank would maintain a close watch on outsourcing trends in the industry. Page 26.
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THE AGE (www.theage.com.au)
Stockmarket analysts yesterday predicted Multiplex's shareprice could fall to as low as A$2.50 when trading resumes today following the construction group's announcement that the losses incurred on its Wembley Stadium redevelopment in Britain had blown out to an estimated A$109 million. Multiplex's shareprice was at A$3.26 when trading was halted on Friday. The cost blowout will see Multiplex's forecast net profit of A$235 million fall to A$170 million. Page B1.
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Australia has moved to fourth in the world for initial public offerings (IPO) according to a new report. The Ernst & Young Global IPO survey 2005 found IPO activity in Australia more than doubled last year, with 166 deals raising A$10.2 billion. Ernst & Young partner, Graeme Browning, said the boom was driven in part by a significant increase in private equity-backed floats, but was now being hampered by more volatile equity markets, rising interest rates and high oil prices. Page B1.
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Ticor yesterday halted trading in its shares amid speculation South African-based Kumba , which controls more than 51 per cent of Ticor, could be launching a takeover bid. Ticor shares were trading at A$1.55 yesterday prior to the trading halt, giving the mineral sands and pigment producer a market capitalisation of A$381 million. Analysts ruled out the possibility of the trading halt being prompted by plans to raise additional capital as the company already has A$52 million in cash on its balance sheet. Page B2.
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