BUSINESS FORECASTING – AUSTRALIA

Oil M&A looms as Woodside clears decks; FAR in trouble

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 17 & 22 : 31-Mar-20

James Byrne of Citibank is among the analysts who expect Woodside Petroleum to seek acquisitions after putting its key growth projects on hold. He notes that the oil and gas group has $US4.9bn in cash and $US7.9bn in liquidity, and it may be prepared to temporarily lose its BBB+ credit rating if the right acquisition emerges. Meanwhile, Far Limited has advised that the sharp decline in the crude oil price in recent months means that it cannot finalise new debt facilities to finance its share of the Woodside-led Sangomar oil project in Senegal.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, FAR LIMITED – ASX FAR, CITIBANK PTY LTD

Wage subsidies not enough for small business

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Original article by John Kehoe
The Australian Financial Review – Page: 8 : 25-Mar-20

Former Treasury official Steven Hamilton has urged the federal government to increase the wage subsidies for small and medium enterprises in response to the pandemic. He warns that the SME sector will be "completely wiped out" if the government does not act, while the nation will face a long and deep recession. Andrew Boak of Goldman Sachs agrees that the government’s existing wage subsidy measures will not be sufficient to avert large-scale job losses.

CORPORATES
GOLDMAN SACHS AUSTRALIA GROUP HOLDINGS PTY LTD, GEORGE WASHINGTON UNIVERSITY

Seven pulls guidance amid advertising uncertainties

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Original article by Max Mason
The Australian Financial Review – Page: 25 : 25-Mar-20

Seven West Media has withdrawn the earnings guidance it issued in February, citing the impact of the coronavirus pandemic. Seven had already downgraded its underlying EBIT guidance for 2019-20 at its half-year results presentation. Seven’s advertising revenue will be hit by the AFL’s decision to suspend its 2020 season until at least the end of May. It is also the official broadcaster of the Tokyo Olympic Games, which were to have been a key source of advertising revenue for the media group in 2020.

CORPORATES
SEVEN WEST MEDIA LIMITED – ASX SWM

Businesses buffeted in sea of uncertainty

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Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 17-Mar-20

A growing number of Australian-listed companies are abandoning their recently-issued earnings guidance in response to the coronavirus. They include Cochlear, which has warned that hearing implants will be a low priority for the healthcare sector in terms of elective surgery when the virus is eventually contained. Challenger Limited, Auckland International Airport and oOh!Media are among the other companies that have withdrawn their earnings guidance. In contrast, The Reject Shop has advised that its sales have risen strongly year-on-year amid panic buying by consumers.

CORPORATES
COCHLEAR LIMITED – ASX COH, CHALLENGER LIMITED – ASX CGF, AUCKLAND INTERNATIONAL AIRPORT LIMITED – ASX AIA, OOH!MEDIA LIMITED – ASX OML, THE REJECT SHOP LIMITED – ASX TRS

More capital raisings on the cards: Goldman

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Original article by Melissa Yeo
The Australian – Page: 27 : 6-Mar-20

Matthew Ross of Goldman Sachs says the coronavirus outbreak is likely to prompt more listed companies to undertake capital raisings in coming months, particularly ones that are close to breaching their debt covenants. Ross notes that the supply chains of many companies will be impacted by the virus, given the high level of dependence on imports from China, especially in the consumer goods sector.

CORPORATES
GOLDMAN SACHS AUSTRALIA PTY LTD

Earnings shredded as virus fears bite

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Original article by Eli Greenblat, David Rogers
The Australian – Page: 17 & 24 : 26-Feb-20

The coronavirus outbreak has become a major theme for the February reporting season, with a growing number of listed companies issuing earnings downgrades due to the impact of the virus. Treasury Wine Estates, Blackmores and Seek are among the latest companies to issue profit warnings; Treasury has downgraded its earnings expectations for the third time in 2020. Meanwhile, retail group Mosaic Brands had advised that its dividends have been put on hold until the impact of the coronavirus becomes clear.

CORPORATES
TREASURY WINE ESTATES LIMITED – ASX TWE, BLACKMORES LIMITED – ASX BKL, SEEK LIMITED – ASX SEK, MOSAIC BRANDS LIMITED – ASX MOZ

Epidemic will create merger and acquisition opportunities

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Original article by Joyce Moullakis
The Australian – Page: 17 & 19 : 24-Feb-20

Tony Damian of law firm Herbert Smith Freehills expects mergers and acquisitions activity in the Asia-Pacific region to remain strong in 2020. This is despite challenges such as the coronavirus outbreak. Damian forecasts that private equity firms and superannuation funds will be a major driver of M&A activity in Australia during 2020. Meanwhile, data from Refinitiv shows that the value of announced M&A deals in Australia has topped $US14.8bn in the year to date, compared with just $US5.4bn at the same time in 2019.

CORPORATES
HERBERT SMITH FREEHILLS PTY LTD, REFINITIV AUSTRALIA PTY LTD

Westpac warns of hit to bottom line

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Original article by Aleks Vickovich
The Australian Financial Review – Page: 19 : 20-Feb-20

Westpac has used a market update for the first quarter of 2019-20 to advise that its earnings for the financial year will be affected by factors such as the Austrac scandal, storms and the bushfires crisis. Citigroup has responded by downgrading its half-year earnings per share forecast by seven per cent, while its forecast for the full year has been reduced by five per cent. Westpac could face fines of up to $2bn for breaching anti-money laundering laws, while it is the subject of two class actions over the scandal.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA. ATTORNEY-GENERAL’S DEPT. AUSTRALIAN TRANSACTION REPORTS AND ANALYSIS CENTRE

Investors shrug off weak outlook, virus threat

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Original article by David Rogers
The Australian – Page: 27 : 20-Feb-20

Pieter Stoltz of UBS notes that 28 per cent of Australia’s large-capitalisation stocks have exceeded their dividend expectations so far in the February reporting season. He says this may be due to factors such as demand for stable income or limited investment opportunities. Stoltz adds that 31 per cent of large companies have upgraded their earnings guidance, while just 19 per cent have downgraded their earnings guidance.

CORPORATES
UBS HOLDINGS PTY LTD

Home loans lift on property recovery

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Original article by Cliona O’Dowd
The Australian – Page: 20 : 17-Feb-20

A report from Deloitte notes that there was a seven per cent decline in new mortgage settlements in 2019. However, the latest edition of its Australian Mortgage Report shows that lenders and brokers expect a 2-3 per cent increase in mortgage settlements in 2020. Heather Baister of Deloitte says mid-tier lenders such as Macquarie and Citibank could benefit the most from the expected upturn in settlements.

CORPORATES
DELOITTE TOUCHE TOHMATSU LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, CITIBANK PTY LTD