PRESS DIGEST-Australian Business News - Feb 25
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)
Listed fund Babcock & Brown (B&B) Infrastructure's BBI.AX asset sale and debt repayment plans are facing further difficulties following a delay in the sale of a 50 percent stake in New Zealand's Powerco. Queensland Investment Corp, which agreed to buy Powerco in November, has forced B&B Infrastructure to restart negotiations, although both sides expect the sale to proceed in coming days. The sale of Powerco had been expected to provide B&B Infrastructure with around NZ$400 million. Page 47.
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Australian travel group Flight Centre (FLT.AX) yesterday released its first-half results, with net profit down 57.4 percent to A$26.1 million. The company also cut its interim dividend from A37.5 cents last year, to A9 cents. Chief executive Graham Turner said that although sales are expected to remain weak for some time, "we are quietly confident the next 12 months will slowly pick up." Mr Turner said the company was looking to make further cost cuts, but there are no plans to cut sales staff. Page 47.
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Australian miner Gloucester Coal (GCL.AX) has been criticised for agreeing to a merger with Whitehaven Coal (WHC.AX) that does not allow Gloucester to consider rival offers. The criticism comes from Gloucester's largest shareholder, Noble Group, with Noble Energy director William Randall saying the deal "eliminates the opportunity for shareholders to opine in the future direction of the company." Gloucester chief executive Rob Lord last week rejected accusations that the deal was structured to prevent Noble influencing the process. Page 47.
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Australian port and rail infrastructure owner Asciano (AIO.AX) will release its first-half results this morning, and is likely to face criticism over the company's failure to sell assets and pay down debt. Chief executive Mark Rowsthorn is expected to assure investors that sales will occur by the end of the financial year. Asciano is believed to be attempting to sell stakes in its Pacific-National coal-haulage business as well as its ports business. Asciano shares yesterday fell 7.5 percent to close at A55.5 cents. Page 47. --
THE AUSTRALIAN (www.theaustralian.news.com.au)
Shares in Australian investment bank Macquarie Group (MQG.AX) yesterday fell 4.5 percent to close at A$19.01, the lowest level since October 2002. A major shareholder, the United States fund Capital Group Companies, also revealed that it had reduced its holding in Macquarie by 3 million shares in the past month, reducing its stake to 5.16 percent. The falling value of Macquarie comes as a number of its satellite funds have reported losses, including Macquarie CountryWide Trust and Macquarie Media (MMG.AX). Page 27.
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Australian iron-ore company Fortescue Metals Group (FMG.AX) yesterday agreed to a deal with Chinese steelmaker Hunan Valin Iron & Steel which will see Hunan invest around A$1 billion in the miner, and give the Chinese company a 15 percent stake in Fortescue. Fortescue chief executive Andrew Forrest said the deal would help Fortescue reach its goal of raising over A$3 billion to fund an increase in the company's Pilbara iron-ore exports to levels similar to those of BHP Billiton. Page 27.
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Australian listed property trust Macquarie CountryWide Trust (MCW.AX) yesterday reported a first-half net loss of A$714 million, including a 10 percent, or A$600.8 million, reduction in property values over the past six months. The company also announced it would sell A$548 million worth of property to reduce debt and lower its current gearing level of over 58 percent to below 50 percent. Chief executive Steven Sewell said the company intends to now "focus our energies on the Australia and New Zealand portfolios." Page 28.
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Poker machine manufacturer Aristocrat Leisure (ALL.AX) yesterday announced its full-year results, including a 59 percent fall in net profit to A$101.9 million. Aristocrat also said its final dividend will be A10 cents a share, compared to the previous year's level of A25 cents. The company's earnings have been hit by the economic downturn, as well as delays in the rollout of its new Viridian Gen7 machines, which led to a 43.8 percent fall in sales. However, Aristocrat expects the new machine to increase its market share this year. Page 29.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Media group News Corp's (NWS.AX) chief operating officer, Peter Chernin, has announced he will leave the company when his current contract ends in June. Mr Chernin is second-in-command to chairman and chief executive Rupert Murdoch, and his departure has raised speculation on whether one of Mr Murdoch's children will take a greater role in the company. James Murdoch, who currently runs the company's Asian and European businesses, is considered the most likely to eventually replace Mr Murdoch. Page 21.
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Australian banking and insurance group Suncorp Metway (SUN.AX) yesterday released its first-half results, with a 32.8 percent fall in net profit to A$258 million, and cut its dividend to A20 cents a share, down from the previous year's A52 cents a share. Chief executive John Mulcahy also announced that he would bring forward his departure from the group to the start of next month. Mr Mulcahy had already announced his resignation earlier this month, but has now decided not to wait for the appointment of a replacement before leaving. Page 22.
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Australian mortgage broker Aussie Home Loans will complete its purchase of the Wizard Home Loans brand from GE Money this week, after the deal was initially announced on Christmas Eve. The Commonwealth Bank of Australia, which owns 33 percent of Aussie, yesterday said it has purchased A$2.25 billion of mortgages from Wizard's A$11 billion loan book, taking only high quality prime mortgages. Aussie will phase out the Wizard brand, although it may be kept for certain products. Page 23.
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THE AGE (www.theage.com.au)
The former chief executive of wheat exporter AWB (AWB.AX), Andrew Lindberg, will face a civil trial on allegations of breaching his fiduciary duties for failing to stop secret kickback payments to the former Iraqi regime. The Australian Securities and Investments Commission had applied to have the case postponed as there are a number of cases which could be heard at the same time. However, only Mr Lindberg's is currently able to proceed, and the Victorian Supreme Court yesterday said continued delay would be unfair to Mr Lindberg. Page B3.
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Australian web services company Melbourne IT yesterday reported its full-year results, including an increase in net profit of 17 percent, to A$16.2 million. The company also declared a final dividend of A8 cents a share, a 14 percent increase. Chief executive and managing director Theo Hnarakis said the result showed the company's ability to successfully grow and adapt. Mr Hnarakis also expected continued growth during 2009, despite challenging market conditions. Page B4.
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Australian oil and gas company Oil Search (OSH.AX) yesterday released full-year results, including a 70 percent increase in net profit to US$240 million. However, the company said it will cut spending on exploration by 60 percent, with the savings to be spent on its US$11 billion liquefied natural gas project in Papua New Guinea. Oil Search also announced a dividend reinvestment plan, which will cut cash and capital outflows in the first part of 2009 by US$45 million. Page B5.
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Australian traffic camera manufacturer Redflex Holdings (RDF.AX) yesterday announced its first-half results, with net profit falling 11 percent to A$4.2 million. Chief financial officer Rod Johnson said the company's revenue had fallen A$1.1 million in the six-month period as non-payment of fines increased due to the economic crisis. However, Redflex restated its guidance of a 40 percent increase in pre-tax profit for the year, helped by completion of a major contract, and the lower Australian dollar improving overseas revenue. Page B5. --
