BUSINESS FORECASTING – AUSTRALIA

Rio misses the mark on iron ore

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Original article by Matt Chambers
The Australian – Page: 19 & 28 : 20-Jul-16

Rio Tinto now expects its iron ore shipments from the Pilbara region of Western Australia to total 330 million tonnes in 2016, compared with previous guidance of 335 million tonnes. However, Rio has not revised its forecast for global iron ore shipments, which remains at 350 million tonnes. Meanwhile, the group has reported that iron ore shipments from the Pilbara totalled 82.2 million tonnes in the June quarter, and 159 million tonnes for the first half of the calendar year. Paul McTaggart of Credit Suisse expects Rio’s Pilbara shipments for the full year to total 328 million tonnes.

CORPORATES
RIO TINTO LIMITED – ASX RIO, CREDIT SUISSE (AUSTRALIA) LIMITED, FORTESCUE METALS GROUP LIMITED – ASX FMG, BHP BILLITON LIMITED – ASX BHP, CITIGROUP PTY LTD

Rio tipped to sell off smaller divisions

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Original article by Peter Ker
The Australian Financial Review – Page: 18 : 18-Jul-16

UBS analyst Myles Allsop suggests that Rio Tinto may seek to offload some of its non-core assets under new CEO Jean-Sebastien Jacques. Allsop says this could include its thermal coal, diamond and uranium mines, noting that they rarely receive much attention in Rio’s production reports. He also says Rio might also regard assets such as the Simandou iron ore project in Guinea as being non-core. Iron ore accounts for nearly 75 per cent of Rio’s earnings.

CORPORATES
RIO TINTO LIMITED – ASX RIO, UBS HOLDINGS PTY LTD, BHP BILLITON LIMITED – ASX BHP, DEUTSCHE BANK AG, MACQUARIE GROUP LIMITED – ASX MQG, FORTESCUE METALS GROUP LIMITED – ASX FMG, NEWCREST MINING LIMITED – ASX NCM, MACH ENERGY, GLENCORE PLC

Moody’s issues bleak outlook for banks

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Original article by Jonathan Shapiro
The Australian Financial Review – Page: 19 : 15-Jul-16

Australian banks are likely to experience pressure on their profit margins because of low interest rates. Frank Mirenzi of Moody’s states in a report released on 14 July 2016 that household debt has increased as a result of rising house prices and low income growth. At present, the big four banks have an "Aa2" rating from Moody’s and an "AA-" rating from Standard & Poor’s.

CORPORATES
MOODY’S INVESTORS SERVICE INCORPORATED, STANDARD AND POOR’S CORPORATION, RESERVE BANK OF AUSTRALIA, HSBC BANK PLC, WELLS FARGO AND COMPANY, BNY MELLON ASSET MANAGEMENT AUSTRALIA LIMITED

It’s ore or nothing for Fortescue

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Original article by James Thomson
The Australian Financial Review – Page: 28 : 13-Jul-16

Citigroup and UBS believe that Fortescue Metals Group will exceed its forecast for iron ore production of 165 million tonnes in 2015-16. Expectations of bullish full-year output have been heightened by data showing that shipments of iron ore from the Port of Hedland reached a record high in June. Clarke Wilkins of Citigroup estimates that Fortescue’s full-year production may have topped 168 million tonnes, while its port capacity could be up to 180 million tonnes. He suggests that there is the potential for Fortescue to use the cost savings from its debt-reduction program to increase its production to this level.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Roy Hill’s ramp-up puts pedal to the metal for Port Hedland

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Original article by Peter Ker, Tess Ingram
The Australian Financial Review – Page: 13 : 12-Jul-16

The Roy Hill iron ore project has progressively increased the number of monthly shipments since exports began in December 2015. A spokesman for Roy Hill Holdings says 12 ships were loaded in June 2016, and the project is on track to reach full production of 55 million tonnes a year by the end of 2016. However, Macquarie Group forecast earlier in the year that the Roy Hill project will fall short of its production target, noting that achieving full production often takes a new project several years.

CORPORATES
ROY HILL HOLDINGS PTY LTD, HANCOCK PROSPECTING PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, POSCO, MARUBENI CORPORATION, CHINA STEEL CORPORATION, SAMSUNG C&T CORPORATION, DURO FELGUERA SA, BHP BILLITON LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, ATLAS IRON LIMITED – ASX AGO

Upbeat outlook puts Dacian at record level

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Original article by Barry FitzGerald
The Australian – Page: 22 : 8-Jul-16

Dacian Gold’s executive chairman Rohan Williams is confident that the gold mining company’s exploration program at the Callisto project in Western Australia will bring the desired results. Williams’ presentation at the Sydney Mining Club prompted a revaluation of the stock, which rose $A0.19 to $A3.49 on 7 July 2016.

CORPORATES
DACIAN GOLD LIMITED – ASX DCN, SYDNEY MINING CLUB, DELTA GOLD LIMITED

Netflix streams ahead of the rest

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Original article by Paul Smith
The Australian Financial Review – Page: 31 : 27-Jun-16

Research by Telsyte has concluded that Australia will boast 2.7 million active online streaming video subscriptions by the end of June 2016, including 1.9 million paid subscriptions. The number of paid subscriptions is expected to rise to 4.1 million by mid-2019, based on current growth rates. Meanwhile, Telsyte MD Foad Fadaghi forecasts that the pay-TV sector will record compound annual growth rate of less than four per cent over the next four years.

CORPORATES
TELSYTE PTY LTD, NETFLIX INCORPORATED, STAN ENTERTAINMENT PTY LTD, PRESTO ENTERTAINMENT PTY LTD, QUICKFLIX LIMITED – ASX QFX, FOXTEL MANAGEMENT PTY LTD, FAIRFAX MEDIA LIMITED – ASX FXJ, AMAZON PRIME, AUSTRALIAN FOOTBALL LEAGUE, NATIONAL BASKETBALL ASSOCIATION, ULTIMATE FIGHTING CHAMPIONSHIP

Ten deal opens board seat to Gordon

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Original article by Jake Mitchell
The Australian – Page: 23 : 27-Jun-16

The affiliation agreement with Bruce Gordon’s WIN Corporation may prompt Ten Network to offer a board seat to the billionaire. WIN CEO Andrew Lancaster is expected to become Gordon’s representative on the Ten board. Ten had previously declined to give Gordon board representation due to conflict of interests concerns, as he is a major shareholder in both Ten and Nine Entertainment Company. WIN’s content supply agreement with Ten commences on 1 July 2016.

CORPORATES
TEN NETWORK HOLDINGS LIMITED – ASX TEN, WIN CORPORATION PTY LTD, NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, FOXTEL MANAGEMENT PTY LTD, DEUTSCHE BANK AG, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, TELSTRA CORPORATION LIMITED – ASX TLS

Gearing proposal won’t hit renters

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Original article by Michael Bleby
The Australian Financial Review – Page: 36 : 23-Jun-16

Research suggests that the Australian Labor Party’s proposal to impose restrictions on negative gearing would have limited impact on rents. A study conducted by SQM Research suggests that rents would remain largely unchanged for the next few years, due to extra supply. SQM Research MD Louis Christopher calculated that the proposed policy would result in a rise of 1.2 percentage points in average rental yields. An adjustment of either rents rising or prices falling would happen only after four years of the new rules being in operation.

CORPORATES
SQM RESEARCH PTY LTD, AUSTRALIAN LABOR PARTY

Rio Tinto spin-off not likely

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Original article by James Thomson
The Australian Financial Review – Page: 17 & 22 : 23-Jun-16

Paul Gait of Alliance Bernstein estimates that Rio Tinto’s newly-created energy and minerals division could be worth $US5.8bn to $US9.2 billion if it was spun off. He says Rio’s restructuring could indicate that it is considering a demerger. The energy and minerals division will comprise assets such as coal, uranium and titanium projects, plus Rio’s iron ore mines in Canada. Peter O’Connor of Shaw & Partners has downplayed the prospects of a demerger, and suggests that Rio is more likely to sell its Queensland metallurgical coal mines in the near-term.

CORPORATES
RIO TINTO LIMITED – ASX RIO, ALLIANCEBERNSTEIN HOLDING LP, SHAW AND PARTNERS LIMITED, BHP BILLITON LIMITED – ASX BHP, SOUTH32 LIMITED – ASX S32, ANGLO AMERICAN PLC, MACQUARIE SECURITIES PTY LTD, JP MORGAN AND COMPANY INCORPORATED, BARCLAYS BANK PLC