BUSINESS FORECASTING – AUSTRALIA

Rio Tinto’s Simandou dream evaporates

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Original article by Amanda Saunders
The Australian Financial Review – Page: 17 : 15-Feb-16

The Simandou iron ore project in Guinea has a book value of $US10bn on Rio Tinto’s accounts, although it is worth less than this given the current price of the steel input. Rio’s 2015-16 full-year results included a $US2bn writedown on the project, which is likely to cost about $US20bn ($A28bn) to develop. While Rio Tinto is scheduled to release a feasibility study on the project, some analysts do not expect Simandou to proceed for at least a decade.

CORPORATES
RIO TINTO LIMITED – ASX RIO, DEUTSCHE BANK AG, CREDIT SUISSE (AUSTRALIA) LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, STANDARD AND POOR’S CORPORATION, VALE SA, WORLD BANK, INTERNATIONAL FINANCE CORPORATION

Advertisers see better times for TV sector

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Original article by Max Mason
The Australian Financial Review – Page: 32 : 15-Feb-16

A new report from media-buying agency Starcom Mediavest shows that advertisers are upbeat about the outlook for the Australian ad market. They expect advertising expenditure to rise by 2.8 per cent in 2016, while media owners forecast growth of 2.6 per cent. However, advertisers expect a 2.6 per cent decline in free-to-air TV advertising expenditure in 2016, although digital TV advertising is tipped to record double-digit growth in 2018 as more consumers view content online.

CORPORATES
STARCOM MEDIAVEST GROUP, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, WALT DISNEY COMPANY

Fairfax modelled a future with no newspapers and 40pc fewer journos

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Original article by Jake Mitchell
The Australian – Page: 1 & 2 : 15-Feb-16

Fairfax Media is tipped to reveal a significant restructuring program in 2016, aimed at reducing costs. Internal documents produced in early 2013 estimate that the media group could shed 205 full-time members of its editorial team by discontinuing the print editions of "The Age" and "The Sydney Morning Herald". Meanwhile, publishing print editions of these mastheads only on Saturdays would enable Fairfax to cut 150 editorial positions.

CORPORATES
FAIRFAX MEDIA LIMITED – ASX FXJ, PAGEMASTERS PTY LTD, AUDIT BUREAU OF CIRCULATIONS

Mirvac points to issues across both sectors

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Original article by Matthew Cranston
The Australian Financial Review – Page: 33 : 12-Feb-16

Mirvac Group has posted a 2015-16 interim net profit of $A472.7m, which is 69 per cent higher than previously. The result was bolstered by a $A289.3m rise in the value of the group’s portfolio of investment properties. Mirvac still expects to pay a full-year distribution of between $A0.097 and $A0.099 per stapled security. Meanwhile, CEO Susan Lloyd-Hurwitz forecasts that growth in residential property prices will slow and sales volumes will fall.

CORPORATES
MIRVAC GROUP – ASX MGR, MORGAN STANLEY AUSTRALIA LIMITED, FOLKESTONE MAXIM ASSET MANAGEMENT LIMITED

RBC picks BHP Billiton over Rio Tinto

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Original article by Amanda Saunders
The Australian Financial Review – Page: 30 : 11-Feb-16

Paul Hissey of RBC Capital has a share price target of $A15 on BHP Billiton, whose shares are trading at around $A15.67 at present. The analyst also has a "sector perform" rating on the resources giant, and forecasts that BHP will reduce its dividend by 75 per cent when its 2015-16 interim results are released later in February 2016. Meanwhile, Hissey has a share price target of $A37 and an "underperform" rating on Rio Tinto, whose stock is trading at $A41.53.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, RBC CAPITAL MARKETS, GLENCORE PLC

JB Hi-Fi grabs bigger share after Dick Smith’s demise

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 & 20 : 9-Feb-16

Listed consumer electronics retailer JB Hi-Fi has posted a 2015-16 interim net profit of $A95.2m, which is 7.5 per cent higher than previously. Sales were 7.7 per cent higher at $A2.12bn, while same-store sales rose by 5.2 per cent. CEO Richard Murray has forecast that the group’s full-year profit will be within the range of $A143m to $A147m, with expectations that sales will total $A3.9bn. Shareholders will receive an interim dividend of $A0.63 per share.

CORPORATES
JB HI-FI LIMITED – ASX JBH, DICK SMITH HOLDINGS LIMITED – ASX DSH, PLATYPUS ASSET MANAGEMENT PTY LTD, CITIGROUP PTY LTD

Rio set to slash share dividend payout

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Original article by Amanda Saunders
The Australian Financial Review – Page: 13 & 18 : 8-Feb-16

Most analysts expect Rio Tinto’s full-year dividend for 2015 to be $US2.21 per share, compared with $US2.15 previously. However, there is growing speculation that Rio will review its progressive dividend policy after the release of its full-year results on 11 February 2016. BHP Billiton is also widely tipped to abandon its progressive dividend policy, and Pengana Capital’s Tim Schroeders notes that there would be little benefit for Rio in being the only large miner to retain this policy.

CORPORATES
RIO TINTO LIMITED – ASX RIO, BHP BILLITON LIMITED – ASX BHP, PENGANA CAPITAL LIMITED, VALE SA, GLENCORE PLC, ANGLO AMERICAN PLC, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, STANDARD AND POOR’S CORPORATION, ALCAN INCORPORATED, UBS HOLDINGS PTY LTD, CITIGROUP PTY LTD

Less popular surgery could hurt

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Original article by Tim Binsted
The Australian Financial Review – Page: 1 & 6 : 4-Feb-16

Figures from Medicare indicate a decline in the growth rate of certain medical procedures. The number of surgical, obstetric and diagnostic procedures increased by 2.2 per cent in the fourth quarter of 2015, compared with the four-year average growth rate of 5.1 per cent. This trend may affect investors’ confidence in Ramsay Health Care and Healthscope.

CORPORATES
RAMSAY HEALTH CARE LIMITED – ASX RHC, HEALTHSCOPE LIMITED – ASX HSO, UNITING CARE, MACQUARIE SECURITIES PTY LTD, ST JOHN OF GOD HEALTH CARE INCORPORATED, AUSTRALIA. DEPT OF HUMAN SERVICES. MEDICARE AUSTRALIA

Blackstone measures Masters as retailers weigh up sites

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Original article by Catie Low
The Australian Financial Review – Page: 13 : 4-Feb-16

US private equity firm Blackstone Group has declined to comment on speculation that it may seek to acquire either the Masters Home Improvement business itself or its portfolio of stores. Meanwhile, Costco and Ikea are among the big-box retailers that are believed to be considering taking over some of the Masters stores, while Bunnings could potentially acquire about 25 outlets. David Errington of Bank of America Merrill Lynch estimates that Woolworths could recover around $A1bn from divesting its home improvement assets.

CORPORATES
WOOLWORTHS LIMITED – ASX WOW, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, THE BLACKSTONE GROUP LP, COSTCO WHOLESALE AUSTRALIA PTY LTD, IKEA TRADING PTY LTD, SPOTLIGHT GROUP HOLDINGS PTY LTD, SPOTLIGHT STORES PTY LTD, ANACONDA STORES PTY LTD, BUNNINGS GROUP LIMITED, WESFARMERS LIMITED – ASX WES, HOME TIMBER AND HARDWARE, METCASH LIMITED – ASX MTS, COLES SUPERMARKETS AUSTRALIA PTY LTD, LOWE’S COMPANIES INCORPORATED, TPG CAPITAL LP, BIG W DISCOUNT STORES, CROWN RESORTS LIMITED – ASX CWN, BLACKSTONE REAL ESTATE ADVISORS LLC

Rich BHP dividends face chop

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Original article by Amanda Saunders
The Australian Financial Review – Page: 1 & 8 : 3-Feb-16

Shares in BHP Billiton closed 2.2 per cent lower at $A14.92 on 2 February 2016, after Standard & Poor’s reduced its credit rating from "A+" to "A". The ratings agency warned of the potential for a further downgrade if BHP retains its progressive dividend policy amid a downturn in commodity prices. Aberdeen Asset Management’s John Manning expects BHP to adopt a dividend payout ratio, while some observers forecast that its 2015-16 interim dividend will be reduced by 50 per cent to $US0.31 per share.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, STANDARD AND POOR’S CORPORATION, ABERDEEN ASSET MANAGEMENT LIMITED, ARGO INVESTMENTS LIMITED – ASX ARG, AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED – ASX AFI, BLACKROCK INCORPORATED, RIO TINTO LIMITED – ASX RIO