BUSINESS FORECASTING – AUSTRALIA

Woodside expects reduced output

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Original article by Perry Williams
The Australian – Page: 20 : 12-Jun-19

Oil and gas producer Woodside Petroleum has advised that its production for 2019 will be at the lower end of its previous guidance of 88-94 million barrels of oil equivalent. Woodside has attributed the revised guidance to a delay in resuming production at the Pluto LNG plant due to maintenance issues. RBC Capital Markets estimates that a two per cent reduction in annual output would reduce Woodside’s earnings by around three per cent.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, RBC CAPITAL MARKETS, BHP GROUP LIMITED – ASX BHP

Streaming consolidation tipped

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Original article by Lilly Vitorovich
The Australian – Page: 19 : 12-Jun-19

PwC’s latest Australian Entertainment & Media Outlook report has forecast that the expected entry of Disney+ and Apple TV+ will prompt consolidation in Australia’s subscription video-on-demand market. Netflix is the market leader in Australia, and PwC notes that there will be a wide field of contenders for the title of the nation’s second-ranked SVOD provider. Justin Papps of PwC says content and a "great viewing experience" are essential to success in the streaming market.

CORPORATES
PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD, DISNEY+, WALT DISNEY COMPANY, APPLE TV+, APPLE INCORPORATED, NETFLIX INCORPORATED, STAN ENTERTAINMENT PTY LTD, FOXTEL NOW, KAYO SPORTS, AMAZON PRIME VIDEO, 10 ALL ACCESS, PRESTO ENTERTAINMENT PTY LTD, SEVEN NETWORK LIMITED, FOXTEL MANAGEMENT PTY LTD, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS

Dacian downturn bodes ill for WA gold producers

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Original article by Nick Evans
The Australian – Page: 19 : 6-Jun-19

Dacian Gold has advised that it now expects production at its Mount Morgans mine to be within the range of 36,000 to 38,000 ounces in the June quarter, compared with previous guidance of 50,000 to 55,000 ounces. Dacian has also warned that longer-term production at the mine will also fail to meet expectations, at an of average 160,000 to 180,000 ounces annually over a five-year period. Shares in Dacian closed 67.5 per cent lower at $0.515 on 5 June.

CORPORATES
DACIAN GOLD LIMITED – ASX DCN, GASCOYNE RESOURCES LIMITED – ASX GCY, MILLENNIUM MINERALS LIMITED – ASX MOY, ST BARBARA LIMITED – ASX SBM, NORTHERN STAR RESOURCES LIMITED – ASX NST, ATLANTIC GOLD CORPORATION, NORGES BANK

Challenge to Australia’s gas dominance

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Original article by Perry Williams
The Australian – Page: Online : 4-Jun-19

Australia displaced Qatar as the world’s biggest LNG exporter in late 2018, but gas buyers say this status may be short-lived as more producers enter a competitive market. James Vigil of Japan-based JERA says LNG producers need to be competitive with regard to factors other than price, such as the terms and conditions of their supply deals and the length of their contracts. Meanwhile, Qatar plans to ramp up its LNG production, while the US has a rapidly growing LNG export trade.

CORPORATES
JERA, THE TOKYO ELECTRIC POWER COMPANY INCORPORATED, CHUBU ELECTRIC POWER COMPANY INCORPORATED, WOOD MACKENZIE, CHEVRON CORPORATION, AGL ENERGY LIMITED – ASX AGL, EXXONMOBIL CORPORATION, MITSUBISHI CORPORATION

BHP faces call for write-down as Rio advances potash dream

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 3-Jun-19

BHP is slated to decide within 18 months if it will commit an additional $US5.5bn to the first stage of its Jansen potash project in Canada. CEO Andrew Mackenzie recently told investors that BHP has overinvested in the project to date, and James Gurry of Deutsche Bank says it may be a good time for BHP to review the carrying value of Jansen. He adds that there is potential for an initial impairment of around $US1.2bn ($1.7bn). Meanwhile, Rio Tinto’s Albany potash joint venture in Canada could commence production within two years.

CORPORATES
BHP GROUP LIMITED – ASX BHP, DEUTSCHE BANK AG, RIO TINTO LIMITED – ASX RIO, JSC AKRON

Iron ore’s wild run threatens fragile balance

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Original article by Nick Evans
The Weekend Australian – Page: 15 & 16 : 25-May-19

The iron ore price recently rose to a five-year high of more than $US100 per tonne. While the price surge will boost the earnings of Australian iron ore producers, BHP and Rio Tinto in particular would prefer a sustained price of around $US70 per tonne. The current elevated price of the steel input provides an incentive for other mining companies to develop iron ore projects and emerge as rival exporters to Asian steel mills. Countries such as Indonesia, Malaysia and India could potentially resume iron ore shipments to China, while strong growth in China’s scrap steel market looms as another possible threat to Australian producers.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, ROY HILL HOLDINGS PTY LTD, ATLAS IRON LIMITED, VALE SA

Gas price cut needed to save Gibson Island

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Original article by Peter Ker
The Australian Financial Review – Page: 14 & 18 : 21-May-19

Incitec Pivot has posted a 2018-19 underlying net profit of $41.9m, compared with $147.1m previously. The company has warned that its fertiliser plant at Gibson Island in Queensland will close by the end of 2019 unless action is taken to address the issue of high gas prices. CEO Jeanne Johns says it will not be viable to keep the plant open until 2022 unless gas prices fall. She has declined to comment on whether the federal government should use the Australian Domestic Gas Security Mechanism to restrict gas export volumes in 2019 and 2020.

CORPORATES
INCITEC PIVOT LIMITED – ASX IPL, ENERGYQUEST PTY LTD

Banks’ total Hayne bill may top $10b

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Original article by James Eyers
The Australian Financial Review – Page: 15 & 18 : 14-May-19

The Commonwealth Bank of Australia has reported cash earnings of $1.7bn for the March quarter, which is 28 per cent lower than previously. CBA’s trading update shows that it made additional pre-tax provisions of $714m for customer remediation during the quarter. The bank’s remediation costs have now topped $2.17bn in total, and it has allocated 400 employees to compensation programs. Meanwhile, Brett Le Mesurier of Shaw & Partners says the major banks and AMP have now incurred combined remediation costs of about $9bn. He adds that this could ultimately rise to around $10bn.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AMP LIMITED – ASX AMP, SHAW AND PARTNERS LIMITED, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, WESTPAC BANKING CORPORATION – ASX WBC, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, KPMG AUSTRALIA PTY LTD, CITIGROUP PTY LTD

Digitised lending ‘in a decade’: NAB

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Original article by Richard Gluyas
The Australian – Page: 19 : 13-May-19

Business banking contributes almost 50 per cent of National Australia Bank’s cash earnings. Anthony Healy, the head of NAB’s business banking division, forecasts that approvals for loans to small and medium enterprises will have been fully digitised within 10 years. He notes that platforms such as Quickbiz already allows NAB to do this. Healy has downplayed speculation that he is among the leading internal candidates to permanently replace Andrew Thorburn as CEO.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, JUDO BANK PTY LTD

Look beyond bank shares to grow wealth: fund managers

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Original article by Lucas Baird
The Australian Financial Review – Page: 29 : 3-May-19

National Australia Bank reduced its interim dividend by 16 per cent on 2 May, but Andrew Martin of Alphinity Investment Management does not expect further dividend cuts in the banking sector. He adds that a credit crunch would be a key driver for any future dividend cuts. Prasad Patkar of Platypus Asset Management says the ‘golden era’ for Australian bank shares ended in the wake of the global financial crisis, rather than the Hayne royal commission, and investors should consider other investment options.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, ALPHINITY INVESTMENT MANAGEMENT PTY LTD, PLATYPUS ASSET MANAGEMENT PTY LTD, AUSTRALIA. ROYAL COMMISSION INTO MISCONDUCT IN THE BANKING, SUPERANNUATION AND FINANCIAL SERVICES INDUSTRY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC