BUSINESS FORECASTING – AUSTRALIA

Zero rates eould smash the banks

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Original article by James Eyers
The Australian Financial Review – Page: 21 : 8-Sep-16

A decline in the cash rate to zero would have a negative impact on returns from Australian banking stocks. Credit Suisse analysts Jarrod Martin and James Ellis have calculated that such a scenario would trigger a fall in earnings of the major banks by an average of nine per cent or $A2.7 billion in total. Consequently, the banks would have to respond to a fall in return on equity by reducing their dividend payout ratios.

CORPORATES
CREDIT SUISSE (AUSTRALIA) LIMITED, RESERVE BANK OF AUSTRALIA, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

Low $A, ad push to spur tourist growth

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Original article by Mark Ludlow
The Australian Financial Review – Page: 8 : 26-Aug-16

Deloitte Access Economics states in its tourism and hotel market outlook that the number of international visitors rose by 10 per cent in 2015. Meanwhile, visitor spending has increased by 17.9 per cent over the past five years. The firm forecasts an annual average growth of 6.2 per cent in international visitors over the next three years.

CORPORATES
DELOITTE ACCESS ECONOMICS PTY LTD, TOURISM AUSTRALIA PTY LTD

Doubts on Fortescue dividends

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Original article by Peter Ker
The Australian Financial Review – Page: 15 : 24-Aug-16

Analysts are divided regarding Fortescue Metals Group’s dividends in coming years, after the pure-play iron ore miner announced a total payout of $A0.15 per share for 2015-16. Paul McTaggart of Credit Suisse expects the total dividend to rise to $A0.17 in 2016-17, before falling to $A0.05 in 2017-18 due to expectations that the iron ore price will fall. Glyn Lawcock of UBS forecasts a dividend of $A0.18 per share in 2016-17 and $A0.11 in 2017-18, while Goldman Sachs and Morgan Stanley anticipate a big fall in the total payout for both financial years.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, SHAW AND PARTNERS LIMITED, DEUTSCHE BANK AG, JEFFERIES AND COMPANY, WOODSIDE PETROLEUM LIMITED – ASX WPL

APN Outdoor savaged after earnings downgrade

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Original article by Jake Mitchell
The Australian – Page: 21 : 23-Aug-16

Australian-listed APN Outdoor has posted a 2016 interim net profit of $A19.5m, which is 49 per cent higher than previously. EBITDA rose by 31 per cent to $A34.8m, and revenue was 10 per cent higher at $A150.6m. However, the outdoor advertising group has advised that it expects EBIT for the full year to be within the range of $A79m to $A84m, down from previous expectations of $A84m to $A88m. APN Outdoor’s shares fell by 35.3 per cent on 22 August, closing at $A5.33.

CORPORATES
APN OUTDOOR GROUP LIMITED – ASX APO, OOH!MEDIA LIMITED – ASX OML, QMS MEDIA LIMITED – ASX QMS, WILSON ASSET MANAGEMENT

CSL shrugs off growth concerns, shares slide

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Original article by Ben Potter
The Australian Financial Review – Page: 17 & 22 : 18-Aug-16

CSL has posted a 2015-16 net profit of $US1.24bn ($A1.6bn), which is 10 per cent lower than previously. The blood products and vaccines group’s sales rose by eight per cent to $US6.13bn. Earnings per share fell by eight per cent to $US2.69, but increased by seven per cent on a constant currency basis. CSL has forecast underlying net profit and EBITDA growth of 11 per cent and 14 per cent respectively in 2016-17. Its shares closed five per cent lower at $A110.84 on 17 August 2016.

CORPORATES
CSL LIMITED – ASX CSL, SHIRE PHARMACEUTICALS GROUP PLC, NOVARTIS AG, CSL BEHRING, WILSONS ADVISORY AND STOCKBROKING LIMITED, SEQIRUS PTY LTD

Santos faces first loss in 20 years

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Original article by Matt Chambers
The Australian – Page: 24 : 17-Aug-16

Oil and gas producer Santos is poised to post a 2016 interim loss of nearly $US1bn, although opinion is divided regarding its underlying result. Macquarie Group anticipates an underlying profit of $US40m, but Citigroup and UBS have forecast a loss of $US80m and $US20m respectively. Santos’s total impairment charges over the last three years now exceed $US8bn, including the recent $US1.5bn pre-tax write-down of its stake in the Gladstone LNG project.

CORPORATES
SANTOS LIMITED – ASX STO, MACQUARIE GROUP LIMITED – ASX MQG, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD

Santos clears the decks with $2bn write-off

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Original article by Matt Chambers
The Australian – Page: 21 & 24 : 16-Aug-16

Oil and gas producer Santos is tipped to post a 2015-16 loss of at least $US1bn, after revealing an additional $US1.5bn ($A1.96bn) write-down of the Gladstone LNG project. Santos had previously announced asset write-downs totalling $US3.9bn across its business in February. The Gladstone project will be able to produce about 7.8 million tonnes of LNG each year when it reaches full capacity, but Santos has advised that output will be capped at the 7.2 million tonnes that LNG customers have agreed to purchase.

CORPORATES
SANTOS LIMITED – ASX STO, GLADSTONE LNG PTY LTD, UBS HOLDINGS PTY LTD, ENERGYQUEST PTY LTD, CREDIT SUISSE (AUSTRALIA) LIMITED, CITIGROUP PTY LTD, STANDARD AND POOR’S CORPORATION

MMG races to ramp up copper

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Original article by Matt Chambers
The Australian – Page: 23 : 15-Aug-16

MMG’s Las Bambas copper mine in Peru is on track to achieve full-year production of about 348,000 tonnes of copper concentrate, after output rose from 31,470 tonnes to 87,142 tonnes in the June 2016 quarter. Macquarie Group had forecast production of just 75,000 tonnes in the second quarter, and it anticipates output of 450,000 tonnes in 2017. Macquarie has upgraded its recommendation on MMG shares from "neutral" to "outperform", and its share price target has been raised from $A3.15 to $A5.80.

CORPORATES
MMG LIMITED – ASX MMG, MACQUARIE GROUP LIMITED – ASX MQG, GUOXIN INTERNATIONAL INVESTMENT CORPORATION LIMITED, CITIC LIMITED, XSTRATA AG, GLENCORE PLC

BHP faces record $8.9bn loss

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Original article by Paul Garvey
The Australian – Page: 23 : 15-Aug-16

BHP Billiton is tipped to post a 2015-16 loss of $US6.8bn ($A8.9bn), with underlying earnings of less than $US1.1bn. The full-year result will be marred by factors such as the impact of lower commodity prices, a massive write-down associated with its US petroleum assets and the impact of the Samarco iron ore tailings dam disaster in Brazil. However, analysts polled by Bloomberg are upbeat about BHP’s outlook, forecasting earnings of about $US2.35bn in 2016-17.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, SAMARCO MINERACAO SA, VALE SA, BLOOMBERG LP, UBS HOLDINGS PTY LTD, RIO TINTO LIMITED – ASX RIO, NATIONAL PARTY OF AUSTRALIA

Bankers, lawyers to get busy as merger deals poised to pick up

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Original article by Joyce Moullakis
The Australian Financial Review – Page: 19 : 12-Aug-16

Data from Dealogic shows that the value of announced mergers and acquisitions deals in Australia in the year-to-date has fallen to an 11-year low of $US36.3bn. However, the Real Flow Predictor report from Intralinks suggests that there will be an upturn in announced M&As in the final quarter of 2016. Karen Evans-Cullen of law firm Clayton Utz is also upbeat about the outlook for M&A activity.

CORPORATES
DEALOGIC (AUSTRALIA) PTY LTD, INTRALINKS PTY LTD, CLAYTON UTZ, AUSGRID PTY LTD, ASCIANO LIMITED – ASX AIO, BROOKFIELD INFRASTRUCTURE PARTNERS LP, QUBE PROPERTY GROUP PTY LTD, THE GOOD GUYS, NATURE’S CARE, PORT OF MELBOURNE, STATE GRID CORPORATION OF CHINA, CHEUNG KONG INFRASTRUCTURE HOLDINGS LIMITED, AUSTRALIA. DEPT OF THE TREASURY