PRESS DIGEST-Australian Business News - May 13
Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
The Federal Government yesterday rejected calls to undertake a cost-benefit analysis on its planned A$43 billion national broadband network (NBN) project. Communications Minister Stephen Conroy told the Senate "we do not need any more studies, any more cost-benefit analyses, to know that this is an infrastructure investment that this country is crying out for." Tenders to conduct a nine-month implementation study on the NBN for the Government are due to be lodged by next Tuesday. Page 50.
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The Service Station Association (SSA) says it will lobby the Federal Government to prevent the possible sale of ExxonMobil's retail petrol operations in Australia to one of the country's major supermarket chains. Retailers Woolworths (WOW.AX) and Coles (WES.AX), along with their petrol alliance partners Caltex (CTX.AX) and Shell, are believed to have considered purchasing ExxonMobil's 770 petrol stations. SSA chief executive Ron Bowden says such a sale would lead to less competition and higher prices. Page 52.
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Elmo de Alwis, chief executive of drug manufacturer Sigma Pharmaceuticals (SIP.AX), said yesterday that although the company is yet to be directly affected by the economic downturn, "we are expecting modest growth, somewhere between 1 and 5 percent." Despite uncertainty about earnings growth, Mr de Alwis said Sigma intends to continue paying out between 55 percent and 65 percent of earnings in dividends to shareholders. Sigma's net profit for the year to January 31 was A$80.1 million, a 3.9 percent increase. Page 52.
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Free-to-air television broadcaster Ten Network (TEN.AX) is unlikely to attract a private equity firm to purchase the 56.6 percent stake currently owned by troubled Canadian company CanWest Global Communications, according to analysts. The poor television advertising market, and the likelihood of Ten undertaking a capital raising later this year are thought to have deterred interest from private equity investors. The company is worth around A$1.5 billion, and has A$610 million of debt. Page 53.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Brian McCarthy, chief executive of newspaper group Fairfax Media (FXJ.AX), yesterday downgraded the group's expected full-year profit to A$600 million, 28 percent less than last year's result, and 10 percent below analyst expectations. Mr McCarthy said that although the slump in the sector was stabilising, "advertising levels are not expected to show any marked improvement at least for the rest of this financial year." Mr McCarthy also said that senior management salaries had been frozen for next year and warned that further redundancies could not be ruled out. Page 27.
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The Federal Government last night announced that it will provide A$339 million towards the cost of the Oakajee Port and Rail project in Western Australia. The state government is expected to contribute a similar amount to the A$4 billion development, which could ship up to 35 million metric tonnes of iron ore a year. The project's chief executive, Chris Eves, yesterday said that state involvement could benefit the project through concessional wharfage rates, given the natural hedge the state enjoys through revenue provided by mining royalties. Page 28.
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Grain exporter AWB (AWB.AX) yesterday said accounting errors identified at its subsidiary AWB Brazil have forced the company to downgrade its half-year net profit, which will be announced next week. First-half profit is now expected to be between A$8 million and A$9 million, down from A$10 million to A$12 million. AWB managing director Gordon Davis said the errors involved mark-to-market valuations of inventory, adding "it's too early to comment on whether it's fraudulent or incompetence." Page 28. Continued...
