BUSINESS FORECASTING – AUSTRALIA

Westpac braces for virus shock

roymorgansocial Leave a comment

Original article by Joyce Moullakis
The Australian – Page: 17 & 21 : 29-Apr-20

Westpac has advised that its half-year accounts will include a pre-tax impairment charge of $2.24bn. This includes a $1.6bn provision for coronavirus-related loan losses. However, CEO Peter King says the bank is well-positioned to absorb an increase in loan losses, while Westpac does not expect the impairment charges to have much effect on its common equity tier-one capital ratio. Westpac is not expected to undertake a capital raising, having raised some $2.77bn from investors in November. Westpac will release its interim results on 4 May.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC

Air travel could struggle to take off again

roymorgansocial Leave a comment

Original article by Hans van Leeuwen
The Australian Financial Review – Page: 11 : 23-Apr-20

The International Air Transport Association has warned that Australia’s aviation industry could take some time to recover when coronavirus restrictions are eased. The IATA notes that a rebound in business confidence after the number of new infections declined in late February saw domestic air travel in China quickly return to about 45 per cent of its previous level. The IATA’s chief economist Brian Pearce notes that in contrast, Australia’s domestic flights have not yet resumed despite the fact that the nation’s rate of infection has slowed considerably.

CORPORATES
INTERNATIONAL AIR TRANSPORT ASSOCIATION

TV networks brace for potential 30 per cent fall in ad revenues despite rising viewership

roymorgansocial Leave a comment

Original article by Rod Myer
The New Daily – Page: Online : 21-Apr-20

The coronavirus lockdown has prompted a spike in ratings for TV news bulletins as Australians seek information on the pandemic. Think TV CEO Kim Portrate says there has been strong growth in audiences for traditional linear TV, broadcast video-on-demand and subscription video-on-demand services. However, TV networks’ revenue is being hit by a sharp fall in bookings from advertisers; Jane Ratcliffe from Standard Media Index estimates that ad revenue could fall by 25-30 per cent in April.

CORPORATES
THINK TV, SMI MEDIA INCORPORATED

NAB reveals $1.4bn writedowns

roymorgansocial Leave a comment

Original article by Joyce Moullakis
The Australian – Page: 16 : 21-Apr-20

National Australia Bank has advised that its cash profit for the six months to 31 March will be marred by writedowns totalling $1.14bn. This includes a $188m provision for customer remediation and an impairment charge of $742m associated with its software capitalisation policy. Westpac recently warned that its half-year results will include some $1.43bn worth of write-downs. Meanwhile, analysts expect the major banks’ loan losses and dividend payouts to be a key focus for investors when their interim results are released.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, WESTPAC BANKING CORPORATION – ASX WBC, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ

BHP iron ore shipments steady as Vale falls short

roymorgansocial Leave a comment

Original article by Peter Ker
The Australian Financial Review – Page: 23 : 21-Apr-20

BHP will release its quarterly update on 21 April, and analysts estimate that its Pilbara iron ore shipments totalled 68 million tonnes in the first three months of 2020. This means BHP should be on track to achieve its full-year guidance for iron ore exports. Fortescue Metals Group also seems set to achieve record export volumes for the year. Brazilian iron ore giant Vale recently advised that it produced 59.6 million tonnes of iron ore fines in the March quarter, which is well below its revised target of 68-73 million tonnes.

CORPORATES
BHP GROUP LIMITED – ASX BHP, FORTESCUE METALS GROUP LIMITED – ASX FMG, VALE SA, RIO TINTO LIMITED – ASX RIO

Energy companies face huge asset writedowns

roymorgansocial Leave a comment

Original article by Perry Williams
The Australian – Page: 13 & 14 : 20-Apr-20

The price of Brent crude oil is trading at around $US28 a barrel. Energy industry sources have warned that Australian oil and gas producers may have to announce significant full or half-year impairment charges if the oil price remains subdued for the remainder of 2020. Allan Gray Australia Simon Mawhinney says $U30 a barrel is not sustainable for the industry. Futures market pricing suggests that the long-run oil price may average $US44 a barrel until 2023.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, BEACH ENERGY LIMITED – ASX BPT, ALLAN GRAY AUSTRALIA PTY LTD

Whitehaven puts off Vickery mine decision

roymorgansocial Leave a comment

Original article by Nick Evans
The Australian – Page: 16 : 17-Apr-20

Whitehaven Coal has advised that its production fell by 15 per cent year-on-year in the March quarter, to 4.1 million tonnes of saleable coal. Whitehaven’s managed coal sales fell 22 per cent to 4.5 million tonnes, and the group now expects its managed coal sales for the full year to be within the range of 17.5-18.5 million tonnes. Whitehaven has also indicated that challenging market conditions means that a final investment decision on its Vickery project will not be made until at least 2021. It had previously expected a decision to be made by the end of June.

CORPORATES
WHITEHAVEN COAL LIMITED – ASX WHC

LNG exports face $20bn hit as prices crash

roymorgansocial Leave a comment

Original article by Perry Williams
The Australian – Page: 13 & 20 : 17-Apr-20

The federal government’s revenue projections for LNG exports in 2020-21 were based on an average crude oil price of $U60 per barrel in 2020. However, the oil price has fallen to around $US27 a barrel; EnergyQuest expects it to average $US30 in the second half of 2020, rising to $US45 in the first half of 2021. The consultancy expects LNG export revenue to fall from $US50bn in 2019-20 to just $US30bn in 2020-21. In contrast, the government had forecast revenue of $US44bn from LNG exports in 2020-21, although this was prior to the coronavirus pandemic and the recent slump in the crude oil price.

CORPORATES
ENERGYQUEST PTY LTD

Westpac flags $1.4b first-half hit, expects more to come

roymorgansocial Leave a comment

Original article by James Frost
The Australian Financial Review – Page: 15 & 18 : 15-Apr-20

Westpac has advised that its financial accounts for the first half of fiscal 2020 will include provisions of $1,030m associated with Austrac’s money-laundering probe. Westpac will also increase its provisions for customer remediation and legal costs by $260m. The financial hit will reduce Westpac’s common equity tier 1 capital ratio by about 30 basis points, to 10.5 per cent. Dermot Ryan of AMP Capital expects Australian banks that report their half-year results in May to slash their dividend payouts.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, AMP CAPITAL INVESTORS LIMITED

Records to fall as miners defy crisis

roymorgansocial Leave a comment

Original article by Dennis Shanahan, Paul Garvey
The Australian – Page: 1 & 4 : 13-Apr-20

Factors such as a resilient iron ore price and a rally in the price of gold have prompted expectations that the value of Australia’s resources exports will top $$299bn in 2019-20. This is $18bn higher than was forecast in December. The nation has exported $65.4bn worth of iron ore since 1 July, including $13.9bn in the first two months of 2020. Iron ore for delivery to China is trading at almost $US80 per tonne, compared with the Treasury’s forecast of $US55 a tonne. The resources and energy sector is largely continuing to operate during the pandemic.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY