BUSINESS FORECASTING – AUSTRALIA

‘Fairfax news business can survive’

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Original article by Max Mason
The Australian Financial Review – Page: 18 : 11-May-16

Fairfax Media CEO Greg Hywood has stressed that the group is still primarily a media company rather than a digital real estate business. He is also confident that Fairfax’s news operations would be able to survive without the revenue contribution of the Domain property division. Fairfax’s revenue from its publishing operations has fallen by six per cent so far in the second half of 2015-16, while Domain’s revenue has grown by nine per cent.

CORPORATES
FAIRFAX MEDIA LIMITED – ASX FXJ, DOMAIN.COM.AU, THE NEWSPAPER WORKS LIMITED, NEWSMEDIAWORKS, SMI MEDIA INCORPORATED, NEWS CORP AUSTRALIA PTY LTD, NEWS CORPORATION – ASX NWS, SEVEN WEST MEDIA LIMITED – ASX SWM, APN NEWS AND MEDIA LIMITED – ASX APN, PRICEWATERHOUSECOOPERS AUSTRALIA (INTERNATIONAL) PTY LTD

Rates cut, fiscal plan keep real estate ticking

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Original article by Michael Bleby
The Australian Financial Review – Page: 6 : 5-May-16

Angus Raine, the executive chairman of Raine & Horne, says the Reserve Bank’s move to reduce the cash rate to 1.75 per cent should attract first-time buyers back to the property market. Most experts do not expect the rate cut and the Australian Government’s May 2016 Budget to have much impact on activity in the residential market, but some suggest that the new rules on superannuation fund balance transfers will prompt increased demand for lower-priced commercial properties.

CORPORATES
RAINE AND HORNE PTY LTD, RESERVE BANK OF AUSTRALIA, CBRE PTY LTD, CENTURY 21 REAL ESTATE, RAY WHITE REAL ESTATE, SECRET AGENT PROPERTY SERVICES

Woolies hit by ratings downgrade

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Original article by Sue Mitchell
The Australian Financial Review – Page: 23 & 32 : 5-May-16

Standard & Poor’s has reduced the long-term credit rating of Woolworths from "BBB+" to " BBB". S&P had previously downgraded the Australian retail giant’s credit rating in August 2015. Rival ratings agency Moody’s will also review its "Baa2" rating on the stock, having downgraded it from "Baa1" in March 2016. The bearish sentiment follows Woolworths’ disappointing financial results for the March quarter. Analysts in turn have reduced their earnings forecasts for 2016 and 2017.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, STANDARD AND POOR’S CORPORATION, MOODY’S INVESTORS SERVICE INCORPORATED, DEUTSCHE BANK AG, GOLDMAN SACHS AND PARTNERS AUSTRALIA PTY LTD, UBS HOLDINGS PTY LTD, JP MORGAN AUSTRALIA LIMITED, BIG W DISCOUNT STORES, ALDI STORES SUPERMARKETS PTY LTD, COLES SUPERMARKETS AUSTRALIA PTY LTD

Warning over Peabody’s local mines

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Original article by Matt Chambers
The Australian – Page: 19 & 22 : 3-May-16

The auditor’s report in the latest financial accounts of Peabody Energy Australia Coal warns of doubts as to whether it can continue as a going concern. Its US-based parent, Peabody Energy Corporation, recently filed for bankruptcy protection with debts of $US6.3bn. The Australian business is not subject to the bankruptcy filing, but its financial accounts note that a $US250m inter-company loan facility may not be sufficient for all of Peabody Energy Australia’s cash outflows.

CORPORATES
PEABODY ENERGY AUSTRALIA COAL PTY LTD, PEABODY ENERGY CORPORATION, ERNST AND YOUNG, EXCEL COAL LIMITED, MACARTHUR COAL LIMITED, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Demerger option looms for Origin

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 28 & 22 : 2-May-16

The commencement of production at the Australia Pacific LNG project means Origin Energy’s oil and gas business accounts for the biggest proportion of its operations. This will strengthen the case for those who advocate that Origin should spin off its electricity and gas retailing arm, which boasts 4.3 million customers. However, Origin has some $A9bn worth of debt, which would make a demerger difficult to pursue at present, particularly given the continued weakness of the crude oil price.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, AGL ENERGY LIMITED – ASX AGL, CREDIT SUISSE (AUSTRALIA) LIMITED, BG GROUP PLC, CONOCOPHILLIPS, CREDIT SUISSE (AUSTRALIA) LIMITED, UBS HOLDINGS PTY LTD, SANTOS LIMITED – ASX STO, HONY CAPITAL, ENN HOLDINGS, SINOPEC CORPORATION, BORAL LIMITED – ASX BLD, ALLAN GRAY AUSTRALIA PTY LTD

Pressure on dividends in bank earnings

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Original article by Clancy Yeates
The Australian Financial Review – Page: 13 & 16 : 2-May-16

The earnings and dividend payouts of Australia’s four major banks will come under scrutiny in the first week of May 2016, with three set to release their half-year results. Westpac is tipped to post an interim net profit of at least $A4bn, while the ANZ Bank and National Australia Bank are expected to report half-year profits of about $A3.58bn and $A3.34bn respectively. Hugh Dive of Aurora Funds Management says NAB is the most likely to reduce its dividend payout, although Mark Nathan of Arnhem Asset Management believes that all four major banks will leave dividends unchanged in the near-term.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AURORA FUNDS MANAGEMENT LIMITED, ARNHEM INVESTMENT MANAGEMENT PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, UBS HOLDINGS PTY LTD, CLSA AUSTRALIA PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, RESERVE BANK OF AUSTRALIA, MOODY’S INVESTORS SERVICE INCORPORATED, WATERMARK FUNDS MANAGEMENT PTY LTD, DICK SMITH HOLDINGS LIMITED – ASX DSH, ARRIUM LIMITED – ASX ARI, PEABODY ENERGY CORPORATION

Coca-Cola Amatil feels heat of price cut

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Original article by Sue Mitchell
The Australian Financial Review – Page: 18 : 28-Apr-16

Coca-Cola Amatil’s 2016 interim results are likely to be negatively affected by the use of discounting to drive sales of carbonated soft drinks and bottled water. Analysts expect the company to announce weaker earnings for the half-year. Consumers’ preferences are changing. Figures from Retail World show that soft drink sales declined from 57.5 per cent of non-alcoholic beverages in 2008 to 50.5 per cent in 2015. Meanwhile, consumption of bottled water has increased from 10.4 per cent to 20.4 per cent.

CORPORATES
COCA-COLA AMATIL LIMITED – ASX CCL, RETAIL WORLD PTY LTD, AUSTRALIAN BUREAU OF STATISTICS, COLES GROUP LIMITED, WOOLWORTHS LIMITED – ASX WOW, PEPSI-COLA COMPANY, ASAHI AND COMPANY, SCHWEPPES AUSTRALIA PTY LTD, DEUTSCHE BANK AG

Rio set to OK $5bn Oyu Tolgoi expansion

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Original article by Matt Chambers
The Australian – Page: 20 : 28-Apr-16

There is growing speculation that Rio Tinto is poised to approve an underground expansion of the Oyu Tolgoi copper and gold mine in Mongolia. Deutsche Bank expects the expansion to be approved during the June 2016 quarter, which is consistent with Rio Tinto’s own stated time-frame. Deutsche suggests that lower construction costs could reduce the cost of the expansion to about $US4bn, compared with Rio Tinto’s $US4.9bn estimate in October 2014.

CORPORATES
RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, TURQUOISE HILL RESOURCES LIMITED

BHP joins Rio in cutting iron ore output

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Original article by Matt Chambers
The Australian – Page: 19-20 : 21-Apr-16

BHP Billiton has reduced its forecast for 2015-16 iron ore output in Western Australia by 10 million tonnes, to 240 million tonnes. The downgrade has been attributed to factors such as inclement weather and a railway upgrade and maintenance project. Rio Tinto recently advised that issues associated with its rail automation program will reduce its Pilbara iron ore production in 2017. BHP’s Pilbara operations produced 61.5 million tonnes of iron ore in the March 2016 quarter.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, JP MORGAN AUSTRALIA LIMITED, DEUTSCHE BANK AG, METAL BULLETIN LIMITED, UBS HOLDINGS PTY LTD, INVESTEC AUSTRALIA LIMITED

Robot train glitches hit Rio output

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Original article by Amanda Saunders
The Australian Financial Review – Page: 17 & 22 : 20-Apr-16

Rio Tinto has advised that its global iron ore shipments for the March 2016 quarter totalled 80.8 million tonnes. Shipments from the Pilbara region of Western Australia rose by 12 per cent year-on-year to 79.9 million tonnes. Meanwhile, Rio Tinto expects iron ore production in 2017 to be within the range of 330 million to 340 million tonnes, which represents a decline of up to 20 million tonnes. The lower guidance is said to be linked to problems with its Autohaul driverless trains project.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, UBS HOLDINGS PTY LTD, MACQUARIE GROUP LIMITED – ASX MQG, DEUTSCHE BANK AG