PRESS DIGEST-Australian Business News - Feb 10
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)
Medical centre and pathology company Primary Healthcare (PRY.AX) has reported a 44 percent decrease in net profits to A$11.5 million for the December-half, compared with a year earlier. Chief executive Ed Bateman said yesterday that the cost benefits of the company's A$2.7 billion takeover of rival Symbion Health were 'materially above A$100 million,' and would increase over time. Dr Bateman maintained that Primary would still achieve its full-year earnings guidance of A$350 million. Page 16.
--
Queensland coal-seam gas producer Pure Energy PES.AX has been targeted by British energy company BG Gas (BG.L) in a A$796 million takeover move. Pure is being offered A$6.40 a share by BG Gas, A$1.01 higher than the current bid by Arrow Energy (AOE.AX). The bid was aimed at giving BG 'further resources to pursue domestic and some export LNG [liquid natural gas] opportunities,' David Maxwell, senior vice president of BG subsidiary Queensland Natural Gas, said yesterday. Page 16.
--
Discount carrier Virgin Blue (VBA.AX) has signalled it will not undertake a capital raising, despite expecting to post a net loss for fiscal 2009. Virgin Blue, which has already been forced to freeze salaries, defer all capital expenditure and decrease its costs by around A$50 million, conceded it would consider further capacity cuts and capital-management ideas. Chief executive Brett Godfrey said yesterday that 'we will be looking to reduce some capacity in the Australian domestic market.' Page 17.
--
Printing and distribution company PMP (PMP.AX) has said it will close two printing operations in an effort to cut costs in the face of falling demand. The printing plants being closed, at Salisbury South in South Australia and Wacol in Queensland, will result in 76 redundancies. Chief executive Richard Allely, who has been in the job less than two weeks, said yesterday that the closures would 'deliver much needed cost-reduction benefits in the second-half of the year.' Page 17.
--
THE AUSTRALIAN (www.theaustralian.news.com.au)
Mining services company the MAC Services Group (MSL.AX) has reported a 34 percent increase in net profit for the December-half to A$12.1 million, compared with a year earlier. The company also raised its dividend payout by 21 percent. MAC services chief executive Mark Maloney said yesterday that the strong performance was due in part to a 'fairly conservatively geared balance sheet' and an 'exposure to the major blue-chip clients.' However, Mr Maloney warned that the severe wet weather in parts of Queensland 'may have an effect on second-half earnings.' Page 20.
--
Financial services provider IOOF Holdings (IFL.AX) is expected to post a 53 percent decrease in underlying profit to A$7.3 million for the December-half, according to broker Credit Suisse. Melbourne-based IOOF yesterday conceded that its investment performance since September had been 'regrettably poor,' ahead of its planned A$540 million merger with wealth management products provider Australian Wealth Management AUW.AX. Page 21.
--
Shares in Queensland bank and insurer Suncorp (SUN.AX) have fallen to their lowest point in over ten years, after it was forced to raise capital at a record 30 percent discount. Yesterday's over-subscribed institutional share placement, which was priced at A$4.50 a share, was aimed at shoring up its balance sheet and covering a rise in bad debts, according to analysts. Suncorp's shares fell 25.5 percent to close at A$5.31 in yesterday's trading. Page 21.
--
Power station owner Transfield Services Infrastructure Fund (TSI.AX) has reported a 40.6 percent fall in net profit to A$8.63 million for the December-half, compared with a year ago. The fund also cut its interim distribution payment to 5 cents from its previous forecast of 9.1 cents, following a decision to use cash to part-fund capital spending. Chief executive Steve Macdonald said yesterday that the cut in distribution payments was 'a prudent approach...to ensure long-term sustainability of returns.' Page 21.
--
THE SYDNEY MORNING HERALD (www.smh.com.au)
Transport group Asciano (AIO.AX) has said it does not expect any material effect from any revisions that might result from impairment testing of asset values that the company is conducting. Asciano revealed it was carrying out the impairment testing after receiving a speeding ticket from the stock exchange following a fall in its stapled security price to 83 cents at the end of the trading week from A$1.06 last Monday. Asciano said the price plunge could not be explained but said it was in talks regarding the possible sale of one or more of its business units. Page 28.
--
Shopping centre owner Centro Properties (CNP.AX) has been offloading assets at lower prices, mainly in the United States, as it struggles to cut its debt burden. The latest sale was a US$40.7 million deal by Centro and joint venture partner JP Morgan for New London Mall in Connecticut -- Centro's second shopping centre sale in the US state in the past month. The sales come after Centro last month obtained a three-year debt extension with its lenders. Page 28.
--
James Packer's Crown Ltd (CWN.AX) has suffered a A$450 million writedown on its casino investments in Las Vegas, taking the company's losses in the main gambling centre in the United States to more than A$700 million in the past six months. Crown signalled last night it would cut the carrying value of its stakes in Stations Casino Group, Fontainebleau Resorts and Harrah's Entertainment to about A$100 million in its accounts for the first half. Crown, which owns and part-owns 18 casinos in the Las Vegas area, has been badly hit by the economic downturn. Page 28.
--
A former director of building materials group James Hardie (JHX.AX), Peter Willcox, has defended in court the reliability of expert estimates of future asbestos disease claims that were used to establish a new compensation fund in February 2001. Mr Willcox, currently a director of Telstra (TLS.AX), is among 10 former James Hardie executives and directors being sued by the corporate regulator over allegedly providing unjustifiably strong assurances about the adequacy of funding for the compensation trust. Page 29.
--
THE AGE (www.theage.com.au)
The decline of prices at the top of the property market has hit a Victorian institution, the Brighton beach box. The small, weatherboard boxes at Dendy Street Beach had recently been selling for around A$200,000, but last weekend one sold for A$171,000. Buyers' agent David Morrell said 'a beach box is not something you live in, it's very much a discretionary, lifestyle spend.' The first public auction of one of the boxes was held in 1999, and saw one of the unpowered boxes sell for A$46,000. Page B1.
--
Shares in soft drinks manufacturer Coca-Cola Amatil (CCL.AX) fell 10 percent yesterday following a decision by its United States-based parent company, the Coca-Cola Company, to abandon merger talks with brewer Lion Nathan LNN.AX. Coca-Cola Amatil's share price lost A$1.05 to close at A$8.30 in yesterday's trading. Coca-Cola Amatil chief executive Terry Davies blamed the collapse of talks on Lion Nathan's inflexibility, saying, 'Lion could have approached this merger in a number of ways...but they specifically rejected all other structures.' Page B3.
--
A satellite company of troubled investment bank Babcock & Brown BNB.AX is seeking to break away within weeks, according to its directors. Listed company B&B Infrastructure BBI.AX, which operates Queensland's Dalrymple Bay Coal Terminal, is currently in a 25-year agreement with B&B, but maintained that its ownership, board, management and legal structures were totally separate. B&B Infrastructure independent chairman David Hamill said yesterday that the company wished to be seen as having a 'life of its own'. Page B3. --
