BUSINESS FORECASTING – AUSTRALIA

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

BHP flags iron ore output surge

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Original article by Nick Evans
The Australian – Page: 20 : 18-Jul-19

BHP has forecast that its Pilbara iron ore exports for 2019-20 will be within the range of 273 to 286 million tonnes, despite its scheduled maintenance work at Port Hedland. BHP’s Pilbara shipments totalled 71.1 million tonnes in the final quarter of 2018-19, and 270.5 million tonnes for the full year. BHP has also advised that its 2018-19 production costs were in line with previous forecasts of less than $US15 per tonne. Rio Tinto recently indicated that its iron ore production costs for 2019 will be between $US14 and $US15 per tonne.

CORPORATES
BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, JP MORGAN AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG

Whitehaven boss hints at hefty dividends for shareholders

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Original article by Peter Ker
The Australian Financial Review – Page: 15 & 18 : 12-Jul-19

Whitehaven Coal will post underlying earnings of $567.6m for 2018-19, according to the consensus forecast of analysts polled by Bloomberg. It would be the group’s second successive record profit, with Whitehaven benefiting from the premium at which its thermal coal has traded compared with the benchmark price. MD Paul Flynn has given indications that Whitehaven will maintain its dividend payout ratio, although some analysts suggest that it may be prudent to retain some cash given its plans to develop the Vickery and Winchester South mines.

CORPORATES
WHITEHALL ASSOCIATES, SHAW AND PARTNERS LIMITED, BLOOMBERG LP, FARALLON CAPITAL PTY LTD

Retailers hope tax-cut cheques will fuel spending spree

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Original article by Rosie Lewis, Eli Greenblat
The Australian – Page: 2 : 11-Jul-19

More than 970,000 people have lodged their annual tax return with the Australian Taxation Office since 1 July. Retailers are optimistic that the federal government’s tax cuts will have a similar stimulatory effect on the sector as the one-off payment made by Labor in 2009. Russell Zimmerman of the Australian Retailers Association says the tax cuts will allow struggling consumers to buy items such as new electrical appliances and clothing.

CORPORATES
AUSTRALIAN TAXATION OFFICE, AUSTRALIAN RETAILERS ASSOCIATION, NATIONAL RETAIL ASSOCIATION LIMITED, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE TREASURY, WESTPAC BANKING CORPORATION – ASX WBC, UNIVERSITY OF MELBOURNE. INSTITUTE OF APPLIED ECONOMIC AND SOCIAL RESEARCH, CITIGROUP PTY LTD

Investors lurk for North West Shelf shake-up

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 19 : 4-Jul-19

Saul Kavonic of Credit Suisse says that some of the partners in the North West Shelf venture could potentially divest their stakes in coming years. The NW Shelf project plans to commence processing third-party gas to offset the depletion of its own gas reserves. Woodside Petroleum has a 16.7 per cent stake in the NW Shelf project and is its operator; CEO Peter Coleman used a recent site tour to flag the possibility that the oil and gas group could eventually review its interest in the project and whether it could make better use of its capital.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, CREDIT SUISSE (AUSTRALIA) LIMITED, BHP GROUP LIMITED – ASX BHP, HAYBERRY GLOBAL FUND

Roy Hill bound for record profit despite volume miss

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Original article by Peter Ker
The Australian Financial Review – Page: 13 & 18 : 2-Jul-19

The Roy Hill iron ore project’s 2018-19 production is expected to be 55 million tonnes, although export volumes are likely to total 53 million tonnes. Recent data from Macquarie suggested that the Gina Rinehart-backed project would export 52.5 million tonnes in 2018-19, after shipping about 50.5 million tonnes in 2017-19. Looking ahead, Roy Hill has applied to increase its annual export capacity to 60 million tonnes in 2020. Roy Hill’s 2018-19 earnings should be boosted by a rally in the iron price in 2018-19, following a $558m profit in the previous financial year.

CORPORATES
ROY HILL HOLDINGS PTY LTD, HANCOCK PROSPECTING PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG

Resource export earnings surge

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Original article by Perry Williams
The Australian – Page: 17 & 21 : 1-Jul-19

The Department of Industry estimates that Australia’s resources export earnings reached a new high of $275bn in 2018-19. It forecasts that this will top $285bn in 2019-20, before falling to $260bn in 2020-21 as commodity prices ease. Iron ore exports are forecast to reach a record $79bn in 2019-20, up from $75bn in 2018-19, and ease to $65bn in 2020-21. Resources Minister Matt Canavan notes that mining investment has fallen in the last five years, and he says governments in Australia should capitalise on high commodity prices by reducing the regulatory barriers to investing in the sector.

CORPORATES
AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, ADANI MINING PTY LTD

Retail the weakest part of the economy, RBA warns

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Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 24-Jun-19

The Reserve Bank of Australia has released a report which highlights the tough trading environment for the retail sector. The central bank’s June bulletin notes that retailers’ profit margins are being hit by price competition, while profitability in the sector may be at risk if retailers seek to boost market share by selling products at a loss. The net margins of food retailers have fallen below five per cent, compared with more than seven per cent in 2009. There has also been a sharp decline in the net margins of non-food retailers over this period.

CORPORATES
RESERVE BANK OF AUSTRALIA, COLES GROUP LIMITED – ASX COL, WOOLWORTHS GROUP LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, COSTCO WHOLESALE AUSTRALIA PTY LTD, ZARA, UNIQLO AUSTRALIA PTY LTD

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