PRESS DIGEST-Australian Business News - May 1904:56, Wednesday,...

PRESS DIGEST-Australian Business News - May 19
04:56, Wednesday, 19 May 2004

(Compiled for Reuters by Media Monitors)
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Brewer, Lion Nathan , is looking for a joint venture
partner to try to stem losses in its A$100 million China
operation. Chief executive, Gordon Cairns, reported yesterday
that the China business lost A$7 million in the six months to
March 31 and would not achieve the target of reaching an
accounting break-even point this financial year. Mr Cairns said a
'dogfight' was in prospect in the Chinese market and 'we don't
have the muscle to compete on our own.' Page 16.

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Southcorp managing director, John Ballard, says the
wine company's production facilities around Australia have not
been rationalised effectively and he 'will be the one to clean
them up.' Mr Ballard said the situation meant that Southcorp was
not getting the benefits of scale that it should be, and he would
announce a comprehensive review of assets no later than
September, based on a three to five-year timetable. Page 16.

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Alan Joyce, chief executive of Jetstar, Qantas Airways'
low-cost carrier, expects to achieve revenue of between
A$400 million and A$500 million in the first year of operations,
despite high fuel prices and the need for a ticket surcharge to
cover them. Mr Joyce said yesterday that he expected the
surcharge to have 'minimal' impact on major routes and 'maybe a
few percentage points on the smaller leisure routes.' Page 16.

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Hutchison Telecommunications chief executive, Kevin Russell,
told the annual meeting yesterday that the company's mobile phone
customer base passed the 500,000 mark last month, with the
third-general '3' business reaching 86,000 subscribers. Chairman, Canning Fok, said that '3' would continue to incur substantial
start-up losses, but was now adding subscribers at a rate of more
than 5000 a week. Page 49.

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John Fairfax Holdings is offering voluntary
redundancies, aiming to reduce editorial staff by between 35 and
45 at Sydney newspapers, The Sydney Morning Herald, published
daily, and The Sun-Herald, published on Sundays. A spokesman said
yesterday that 57 per cent of editorial staff at the two papers
earned more than A$100,000 a year. He said that after their
initial cost, the redundancies could save around 10 per cent of
the papers' total costs. Page 49.

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THE AUSTRALIAN (www.theaustralian.com.au)

Macquarie Bank yesterday reported a 48 per cent
increase in net profit for the past financial year to A$494
million. Foreign income increased by almost two-thirds, to
account for 31 per cent of overall earnings. Chief executive,
Allan Moss, cautioned that the next 12 months 'may not be as
favourable,' especially in light of international threats.
Domestically, he said, Macquarie's view on property was 'not
overly gloomy.' Page 21.

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Federal Health Minister, Tony Abbott, confirmed yesterday
that the A$114 million influenza vaccine stockpile announced in
the Budget will not be the Australian product, Relenza, but its
main rival, the United States drug, Tamiflu, developed by the
Roche Group. Biota Holdings, developers of Relenza, is suing
British giant, GlaxoSmithKline, for abandoning an agreement to
market and promote Relenza. Page 21.

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The Commonwealth Bank of Australia (CBA) announced
the departure yesterday of Michael Ullmer, who was head of the
bank's institutional and business banking division, and had
previously been chief finance officer. CBA announced that a new
business and premium banking division would be headed by Michael
Katz, who is generally regarded, according to banking analysts,
as heir apparent to chief executive, David Murray. Page 21.

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The Commonwealth Bank of Australia's (CBA) decision to sell
its 12 per cent stake in the Bank of Queensland (BoQ) renewed
speculation yesterday about moves to create a 'fifth pillar' in
the banking sector to join CBA, National Australia Bank, ANZ and
Westpac. Commonwealth Securities banking analyst, Carlos
Castillo, said the most logical alliance would be between BoQ and
New South Wales-based St George Bank. Page 23.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Shares in brewer, Lion Nathan, fell A18 cents to A$6.22
yesterday after the announcement of its first-half results. The
results included a A$34 million write-down on the sale of its
Victorian hotels, a 13 per cent decline in New Zealand earnings
and a A$7.1 million loss in China. However, excluding the hotels
item, profits in the Australian business were up seven per cent
to A$118 million. Page 25.

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Shares in airline, Virgin Blue , continued to decline
yesterday as analysts reassessed Monday's results and the overall
outlook for the industry. The shares closed A6 cents lower at
A$1.99, 23 per cent below their February 24 peak. Analysts
expressed concerns about continued fuel price increases and next week's launch of the cut-price competitor, Jetstar, the Qantas
Airways subsidiary. Page 25.

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More than half of Australia's exporters expect to sell more
in the next three months, according to the latest survey by
Austrade and freight forwarder, DHL. Almost two-thirds of
respondents said they expected to increase sales over the next
year. Exporters were confident about prospects in China and
South-East Asia, but uncertain about the effects of the free
trade agreement with the United States. Page 25.

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The board of TAB Ltd yesterday defended its
recommendation that shareholders reject the takeover offer from
Tabcorp, but analysts were sceptical about its impact. Deutsche
Bank advised TAB shareholders directly to accept the Tabcorp
offer, which was worth A$4.61 a share at the close of trading
yesterday. The bank said there was no prospect of a competing
offer, or of a better offer from Tabcorp. Page 26.

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THE AGE (www.theage.com.au)

Macquarie Bank reported yesterday that total employment
expenses for its 5700 staff in 2003-04 was A$1.24 billion, or
almost A$220,000 per employee. Chief executive, Allan Moss, was
paid A$9.1 million and held an entitlement of A$16.6 million for
accrued profit share. Nick Moore, head of investment banking and
infrastructure, received more than A$8 million, and Ottmar Weiss,
head of equity markets, received A$7.2 million. Page B1.

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Federal Treasury Secretary, Ken Henry, said yesterday that
the Budget marked the beginning of a long-term strategy to deal
with a revenue 'hole' threatened by an ageing population. Dr
Henry said the choices available to address the problem were to
restrict Government spending, conserve surpluses ahead of the
problem, borrow, or increase the rate of economic growth per head
of population. He said the Budget affirmed a commitment to the
growth option. Page B2.

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Fierce competition at the cheapest end of the retail market
has seen shares in Miller's Retail and The Warehouse Group
decline by 15 per cent since late January. Miller's Retail came
under increased pressure yesterday as a major investor sold
almost 20 million shares at A$1.40 each, A10 cents below the
market. Warehouse Group announced yesterday that its new chief
executive would be Ian Morrice, currently head of British
hardware chain, B&Q plc.Page B2.

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Party-plan lingerie retailer, UnderCoverWear, is offering the
public 24 million A50-cent shares ahead of listing on the
Australian Stock Exchange. The offer represents half the issued
capital of the Sydney-based company. The float will see the
departure of long-term investors, Ian Everingham, who is selling
A$4 million worth of shares, and Westpac's Quadrant Capital,
which is selling an A$8 million parcel. Page B3.

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Southcorp chief executive, John Ballard, indicated yesterday
that a rationalisation of the wine company's asset base would be
part of a new strategy, to be announced within the next few
months. Mr Ballard said Southcorp had an uncompetitive cost base.
'While Southcorp makes great wines, it is not yet a great
business,' he said. Page B3.
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Looking for more information from local sources? Factiva.com
has 112 Australian sources including the Australian Financial
Review.

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