BUSINESS FORECASTING – AUSTRALIA

Potash bull sees upside in BHP push at Jansen

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Original article by Peter Ker
The Australian Financial Review – Page: 23 : 22-Aug-19

BHP expects to have a capital expenditure budget of about $US8bn for fiscal 2021, and CEO Andrew Mackenzie has indicated that less than $US500m will be allocated to the Olympic Dam mine in South Australia and the Jansen potash project in Canada. A decision on whether to proceed with the Jansen project is likely within 18 months. Getting it to the production stage is slated to cost between $US5.3bn and $US5.7bn, and Tal Lomnitzer of Janus Henderson says rising global demand for food means the project will deliver long-term benefits for BHP and its shareholders.

CORPORATES
BHP GROUP LIMITED – ASX BHP, JANUS HENDERSON GROUP PLC – ASX JHG, ELLIOTT MANAGEMENT CORPORATION

Seven set for tough result as ratings flop

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Original article by Zoe Samios, Leo Shanahan
The Australian – Page: 23 : 19-Aug-19

Tribeca Investment Partners’ Jun Bei Liu expects Seven West Media to announce weak earnings and writedowns when its 2018-19 financial results are released on 20 August. The media group had issued a profit warning in May, and the Seven Network’s audience share is currently 2.4 per cent lower year-on-year. In contrast, the Nine Network’s audience share has risen by 3.4 per cent. New Seven West CEO James Warburton has noted that the Seven Network has some "ageing formats"; data from OzTAM shows that ‘My Kitchen Rules’ and ‘House Rules’ in particular have lost significant audience share in recent years.

CORPORATES
SEVEN WEST MEDIA LIMITED – ASX SWM, SEVEN NETWORK LIMITED, NINE NETWORK AUSTRALIA LIMITED, TEN NETWORK HOLDINGS LIMITED, TRIBECA INVESTMENT PARTNERS PTY LTD, OZTAM PTY LTD

BHP to release a dividend smash hit

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Original article by Peter Ker
The Australian Financial Review – Page: 14 : 19-Aug-19

The consensus of analysts polled by Bloomberg is that BHP will post a 2018-19 underlying profit of $US9.91bn on 20 August. UBS is more bullish, forecasting a profit of at least $US10bn. UBS also expects shareholders to receive a final dividend of $US0.82 per share, with a full-year payout of $US2.39. Citigroup in turn anticipates a final dividend of $US0.79 a share and a total dividend of $US2.36 for the year. BHP paid out $US8.6bn ($12.7bn) worth of dividends earlier in 2019.

CORPORATES
BHP GROUP LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, CITIGROUP PTY LTD, BLOOMBERG LP, RIO TINTO LIMITED – ASX RIO

AGL eyes alternatives as Vocus off the table

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 17 & 20 : 9-Aug-19

AGL Energy has posted a 2018-19 net profit of $905m, which is 42.8 per cent lower than previously. Its underlying profit after tax rose by 2.2 per cent to $1.04bn. AGL has forecast that its profit will be within the range of $780m and $860m in 2019-20, citing factor such as lower electricity prices, higher fuel costs and the impact of an outage at its Loy Yang A generator in Victoria. Meanwhile, CEO Brett Redman says AGL remains open to expanding into the data services sector, despite abandoning a bid for Vocus Group earlier in 2019.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, VOCUS GROUP LIMITED – ASX VOC, PERTH ENERGY PTY LTD, VERTIUM ASSET MANAGEMENT PTY LTD, JP MORGAN AUSTRALIA LIMITED, CITIGROUP PTY LTD

CBA sets banking tone with profit pressure

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Original article by Cliona O’Dowd
The Australian – Page: 17 & 20 : 5-Aug-19

The consensus of analysts polled by Bloomberg is that the Commonwealth Bank of Australia will post a 2018-19 cash profit of $8.76bn, which would be seven per cent lower than previously. Jonathan Mott of UBS estimates that CBA has about $5bn in excess capital after completing the sale of Colonial First State Global Asset Management. He says that rather than announcing a special dividend, the bank should retain some capital until the outcome of the New Zealand Capital Review is known. Mott recently downgraded his recommendation on CBA’s stock to ‘sell’. AMP and Suncorp are among the other companies that will issue earnings reports in coming days.

CORPORATES
COMMOTION SYSTEMS, BLOOMBERG LP, UBS HOLDINGS PTY LTD, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, AMP LIMITED – ASX AMP, SUNCORP GROUP LIMITED – ASX SUN, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, AGL ENERGY LIMITED – ASX AGL, TRANSURBAN GROUP LIMITED – ASX TCL, RECKON LIMITED – ASX RKN, MIRVAC GROUP – ASX MGR, MITSUBISHI UFJ FINANCIAL GROUP INCORPORATED, JP MORGAN AUSTRALIA LIMITED, ORD MINNETT GROUP LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY

Inpex expects glut of LNG to continue

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Original article by Perry Williams
The Australian – Page: 19 : 5-Aug-19

The spot price of LNG in Asia has fallen to $US4 per million British thermal units, compared with $US11/MMBtu in late 2018. The LNG market has been affected by factors such as increased supply and slowing global economic growth. However, Inpex CEO Takayuki Ueda is upbeat about the outlook for LNG, saying Asian demand will remain strong. Meanwhile, Inpex is considering an increase in the capacity of its Ichthys LNG project.

CORPORATES
INPEX CORPORATION, CHEVRON CORPORATION

Iron ore floods Rio Tinto with cash

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Original article by Nick Evans
The Australian – Page: 19 : 1-Aug-19

Macquarie Group forecasts that Rio Tinto will report after-tax earnings of $US5.7bn for the first half of 2019, and EBITDA of $US10.9bn. The investment bank adds that iron ore is likely to account for more than 80 per cent of Rio Tinto’s earnings for the half-year, following a strong rise in the price of the steel input. Macquarie analysts also expect Rio Tinto to announce an interim dividend of $US1.76 per share, which is in line with the consensus forecast of about $US1.78 per share. Some analysts suggest that a special dividend is also possible.

CORPORATES
RIO TINTO LIMITED – ASX RIO, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD, ALUMINIUM CORPORATION OF CHINA LIMITED

Building slowdown tipped to hit bottom in 2019-20

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 31 : 29-Jul-19

New building starts are expected to fall by eight per cent in 2019-20, according to BIS Oxford Economics, having fallen by an estimated 12 per cent in 2018-19. An improvement in non-residential construction in 2019-20 is tipped to be outweighed by a decline in residential activity. However, BIS Oxford Economics expects building activity to rebound in 2020-21 and the years beyond, as factors such as new first-home buyer stimulus programs and cuts to interest rates help to generate a recovery in the market.

CORPORATES
BIS OXFORD ECONOMICS PTY LTD

Tough time for IPOs as investors fall quiet

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Original article by Samantha Bailey
The Australian – Page: 25 : 24-Jul-19

HLB Mann Judd’s latest IPO Watch report shows that 23 companies listed on the Australian sharemarket in the first half of 2019, compared with 39 during the same period in 2018. Meanwhile, just $823m was raised via IPOs during the first half, down from $2.5bn in the previous corresponding period. Marcus Ohm of HLB does not expect IPO activity to improve during the September quarter, while he says the outlook for the final quarter of 2019 may depend on how the sharemarket performs. At present, just eight companies are seeking to list in the second half of 2019.

CORPORATES
HLB MANN JUDD, STANDARD AND POOR’S ASX 200 INDEX

Little room for error as reporting season nears

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Original article by David Rogers
The Australian – Page: 25 : 24-Jul-19

The consensus forecast is for S&P/ASX 200 companies outside of the resources sector to post earnings per share growth of one per cent for 2018-19. Morgans Financial expects the August 2019 reporting season to generally exceed expectations, due primarily to the fact that earnings forecasts have been downgraded so much. Andrew Tang of Morgans favours stocks such as BHP, Rio Tinto, Telstra and A2 Milk. He says Suncorp, Spark Infrastructure, Computershare and REA Group are among the stocks whose 2018-19 earnings and future guidance may disappoint the market.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGANS FINANCIAL LIMITED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, TELSTRA CORPORATION LIMITED – ASX TLS, THE A2 MILK COMPANY LIMITED – ASX A2M, SUNCORP GROUP LIMITED – ASX SUN, SPARK INFRASTRUCTURE GROUP – ASX SKI, REA GROUP LIMITED – ASX REA, MACQUARIE GROUP LIMITED – ASX MQG, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX