BUSINESS FORECASTING – AUSTRALIA

BlueScope dives as chief departs

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Original article by Matt Chambers
The Australian – Page: 17 & 20 : 22-Aug-17

BlueScope Steel has reported a sharp rise in net profit for 2016-17, to $A715.9m. However, the steel-maker has advised that EBIT for the first half of 2017-18 will fall from $A527m previously to $A422m, due to factors such as the strong Australian dollar and the impact of rising scrap metal prices in the US on its North Star subsidiary. BlueScope has also revealed that Mark Vassella will succeed CEO Paul O’Malley at the start of 2018, and that the company is the subject of a cartel investigation. BlueScope shares fell $A3.08 to $A11.03 on 21 August.

CORPORATES
BLUESCOPE STEEL LIMITED – ASX BSL, NORTH STAR STEEL, CARGILL INCORPORATED, AUSTRALIAN COMPETITION AND CONSUMER COMMISSION, CITIGROUP PTY LTD

Near enough is good enough in season so far

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Original article by David Rogers
The Australian – Page: 28 : 22-Aug-17

Analysts’ consensus earnings-per-share estimates for 2017-18 have been downgraded by 0.3 per cent so far in the August 2017 reporting season. Hasan Tevfik of Credit Suisse notes that this compares with EPS upgrades of 1.6 per cent in the February reporting season. Meanwhile, just 19 per cent of Australian-listed companies have exceeded consensus earnings estimates so far in the current reporting season, compared with an average of 40 per cent over the last two decades. Likewise, 38 per cent of companies have failed to meet consensus estimates to date, while the historical average is just 28 per cent.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, STANDARD AND POOR’S ASX 200 INDEX, GOLDMAN SACHS AUSTRALIA PTY LTD, BLUESCOPE STEEL LIMITED – ASX BSL, BEACH ENERGY LIMITED – ASX BPT, G8 EDUCATION LIMITED – ASX GEM, FORTESCUE METALS GROUP LIMITED – ASX FMG, APN OUTDOOR GROUP LIMITED – ASX APO, TELSTRA CORPORATION LIMITED – ASX TLS, TRANSURBAN GROUP LIMITED – ASX TCL, CSL LIMITED – ASX CSL, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, AGL ENERGY LIMITED – ASX AGL, FAIRFAX MEDIA LIMITED – ASX FXJ, DOMAIN.COM.AU, CITIGROUP PTY LTD

Reporting season needs a real kick-along

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Original article by Philip Baker
The Australian Financial Review – Page: 20 : 21-Aug-17

To date some 76 companies in the S&P/ASX 200 companies have released their financial results so far in the August reporting season. Just 20 per cent of stocks to have issued guidance for 2017-18 have upgraded their earnings-per-share forecast. Blue-chip stocks such as Qantas and BHP Billiton will need to deliver solid earnings results in the next two weeks in order to bolster investor sentiment and boost the benchmark index. A major issue during the current reporting season has been the dearth of companies to have exceeded expectations.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, BHP BILLITON LIMITED – ASX BHP, QANTAS AIRWAYS LIMITED – ASX QAN, WOOLWORTHS LIMITED – ASX WOW, MACQUARIE WEALTH MANAGEMENT, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, TELSTRA CORPORATION LIMITED – ASX TLS, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN, JANUS HENDERSON GROUP PLC – ASX JHG, JB HI-FI LIMITED – ASX JBH, IOOF HOLDINGS LIMITED – ASX IFL, ORIGIN ENERGY LIMITED – ASX ORG, SUNCORP GROUP LIMITED – ASX SUN, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, JAMES HARDIE INDUSTRIES PLC – ASX JHX, NEWCREST MINING LIMITED – ASX NCM, CROWN RESORTS LIMITED – ASX CWN, CHALLENGER LIMITED – ASX CGF, KOGAN.COM LIMITED – ASX KGN, THE A2 MILK COMPANY LIMITED – ASX A2M

BHP to deliver six-fold jump in earnings

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Original article by James Thomson
The Australian Financial Review – Page: 13 & 18 : 21-Aug-17

The general consensus of analysts is for BHP Billiton’s underlying earnings for 2016-17 to be within the range of $US7bn to $US7.3bn, compared with $US1.2bn in 2015-16. Most analysts expect BHP’s final dividend to be around $US0.43 per share, although Credit Suisse expects a payout of $US0.36. BHP’s final dividend in 2015-16 was just $US0.14 per share. Meanwhile, investors will be hoping for some guidance on BHP’s plans for its US shale assets and the Jansen potash project.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, CREDIT SUISSE (AUSTRALIA) LIMITED, SHAW AND PARTNERS LIMITED, ELLIOTT MANAGEMENT CORPORATION, DEUTSCHE BANK AG, MACQUARIE GROUP LIMITED – ASX MQG, RIO TINTO LIMITED – ASX RIO, TRIBECA GLOBAL NATURAL RESOURCES FUND, FORTESCUE METALS GROUP LIMITED – ASX FMG

Domino’s boss red-faced at missed target

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 & 25 : 16-Aug-17

Domino’s Pizza Enterprises has posted a lower-than-forecast 2016-17 underlying net profit of $A118.5m. The result was 29 per cent higher than previously, compared with guidance of 32.5 per cent growth. Same-store sales growth in Australia and New Zealand fell from 17.4 per cent in the first half to 10 per cent in the second half, and Domino’s has flagged growth of just eight per cent in 2017-18. Domino’s has flagged net profit growth of around 20 per cent in 2017-18.

CORPORATES
DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, DEUTSCHE BANK AG, WATERMARK FUNDS MANAGEMENT PTY LTD

Santos deflated by $880m in impairments

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Original article by Matt Chambers
The Australian – Page: 19 : 16-Aug-17

Santos has advised that its 2017 half-year accounts will include after-tax impairment charges totalling $US690m ($A880m). This includes a $US870m write-down in the value of its 30 per cent stake in the Gladstone LNG project, which was prompted by a downgrade in the group’s oil price assumptions for the next five years. The write-downs will be offset by a $US330m after-tax write-back associated with its Cooper Basin assets. Deutsche Bank expects Santos to post an underlying interim net profit of $US121.6m.

CORPORATES
SANTOS LIMITED – ASX STO, GLADSTONE LNG PTY LTD, DEUTSCHE BANK AG, ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, AWE LIMITED – ASX AWE, RBC CAPITAL MARKETS, MACQUARIE GROUP LIMITED – ASX MQG, ENGIE SA

Amazon will benefit us: Brambles chair

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Original article by Lisa Allen, Eli Greenblat
The Australian – Page: 19 : 14-Aug-17

Brambles chairman Stephen Johns says that although Amazon will be a "disruptive force" for Australian retailers, its entry into the local market could present an opportunity for the logistics group. He adds that the AmazonFresh business in particular should benefit Brambles’ CHEP and IFCO pallet operations. Morgan Stanley says department stores are likely to be hardest hit by Amazon’s arrival in Australia.

CORPORATES
BRAMBLES LIMITED – ASX BXB, AMAZON.COM INCORPORATED, AMAZONFRESH, CHEP AUSTRALIA, IFFCO GROUP OF COMPANIES, MORGAN STANLEY AUSTRALIA LIMITED, WESFARMERS LIMITED – ASX WES, KMART AUSTRALIA LIMITED, TARGET AUSTRALIA PTY LTD, MYER HOLDINGS LIMITED – ASX MYR, JB HI-FI LIMITED – ASX JBH, WOOLWORTHS LIMITED – ASX WOW, COLES SUPERMARKETS AUSTRALIA PTY LTD

Nick Scali dives after caution on outlook

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Original article by Eli Greenblat
The Australian – Page: 19 : 11-Aug-17

Listed furniture retailer Nick Scali has posted a 2016-17 net profit of $A37.2m, which is 42.4 per cent higher than previously, while revenue rose by 14.7 per cent to $A232.9m. Same-store sales rose by 10 per cent, but MD Anthony Scali expects lower growth in 2017-18, noting that economic conditions and the housing market have a direct impact on furniture retailers. Shareholders will receive a fully franked final dividend of $A0.20 per share, and a full-year payout of $A0.34.

CORPORATES
NICK SCALI LIMITED – ASX NCK, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN

Auto classifieds firm fancies $1b opportunities offshore

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Original article by Max Mason
The Australian Financial Review – Page: 17 : 10-Aug-17

Carsales.com.au has posted a 2016-17 net profit of $A109.5m, compared with $A109.3m previously. The listed automotive classified advertising group’s revenue increased by eight per cent to $A372.1m and EBITDA totalled $A176.5m. CEO Cameron McIntyre says the group’s international division could eventually contribute more earnings and revenue than its Australian business. He flags emerging markets such as Asia and Latin America as those offering the best growth potential for its international division.

CORPORATES
CARSALES.COM LIMITED – ASX CAR, CITIGROUP PTY LTD, TYRESALES.COM, REDBOOK

Be cautious about retail landlords, Citi warns clients

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Original article by Nick Lenaghan
The Australian Financial Review – Page: 37 : 8-Aug-17

Shares in listed retail property trusts such as Vicinity Centres, Scentre Group and Westfield Corporation have struggled recently, due to concern that their tenants will be damaged by the arrival of Amazon in Australia. However, the general consensus of analysts is that retail real estate investment trusts will post earnings growth of five per cent for 2018. Citigroup is less optimistic than some of its peers, predicting growth of just 3.5 per cent.

CORPORATES
VICINITY CENTRES – ASX VCX, SCENTRE GROUP – ASX SCG, WESTFIELD CORPORATION – ASX WFD, AMAZON.COM INCORPORATED, CITIGROUP PTY LTD, BUNNINGS GROUP LIMITED, CHARTER HALL RETAIL REIT – ASX CQR, SHOPPING CENTRES AUSTRALASIA PROPERTY GROUP – ASX SCP, CLSA AUSTRALIA PTY LTD, GOODMAN GROUP – ASX GMG, STOCKLAND – ASX SGP, INVESTA OFFICE FUND – ASX IOF, MIRVAC GROUP – ASX MGR, BWP TRUST – ASX BWP