STRATEGIC PLANNING – AUSTRALIA

Investors query AMP turnaround

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Original article by James Frost
The Australian Financial Review – Page: 17 & 22 : 9-Aug-19

AMP has announced a loss of $2.3bn for the first half of 2019 and a new strategy to turn around its fortunes. Amongst other things, the wealth manager aims to reduce costs by about $300m a year. AMP has also flagged plans to significantly reduce the number of financial advisers in its network and place more emphasis on so-called roboadvice. AMP will also continue to pursue the sale of its life insurance business to Resolution Life, while it will issue new shares at $1.50 apiece via a $650m capital raising.

CORPORATES
AMP LIMITED – ASX AMP, RESOLUTION LIFE GROUP LIMITED, MERLON CAPITAL PARTNERS PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD

BHP pegs Venus as nickel’s rising star

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Original article by Nick Evans
The Australian – Page: 20 : 6-Aug-19

Eddy Haegel, the head of BHP’s Nickel West division, addressed the annual Diggers and Dealers conference on 5 August. He says Nickel West’s future still depends on the outlook for the battery market, but BHP is positioning itself to capitalise on what he describes as a "once-in-a-generation opportunity". BHP has commenced mining at its Venus nickel deposit in Western Australia, while it is undertaking further exploration near its existing nickel operations in the state.

CORPORATES
BHP GROUP LIMITED – ASX BHP, NICKEL WEST, DIGGERS AND DEALERS FORUM

China rare earth demand soft: Lynas

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Original article by Paul Garvey
The Australian – Page: 20 : 30-Jul-19

Rare earths producer Lynas Corporation has advised that its sales for the June quarter totalled 4,723 tonnes, compared with 5,030 tonnes in the three months to March. CEO Amanda Lacaze says demand for rare earths remains soft, despite ongoing trade tensions between the US and China. The subdued price for rare earths has prompted Lynas to increase the stockpiles at its processing plant in Malaysia. Lacaze adds that Lynas is still in talks with the Malaysian government regarding the renewal of its operating licence.

CORPORATES
LYNAS CORPORATION LIMITED – ASX LYC

Fortescue expands its base in China

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Original article by Paul Garvey
The Australian – Page: 23 : 26-Jul-19

Fortescue Metals Group has advised that its iron ore shipments totalled 167.7 million tonne in 2018-19, including a record 46.6 million tonnes in the final quarter. Fortescue received an average price of $US65 per tonne during the financial year, an increase of 50 per cent. The pure-play miner has forecast that it will ship between 170 million and 175 million tonnes of iron ore in 2019-20. Meanwhile, Fortescue has opened a new office in China that will allow it to sell smaller volumes of iron ore to customers.

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

Rivals baulk at BHP’s carbon push

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Original article by Nick Evans
The Australian – Page: 17 & 27 : 25-Jul-19

Australian Petroleum Production & Exploration Association CEO Andrew McConville says the resources sector should be solely responsible for addressing its scope 3 emissions, and government intervention is not necessary. The issue has been highlighted by BHP’s move to address carbon emissions across its supply chain, including those generated by the buyers of its commodities. Santos CEO Kevin Gallagher has also argued that regulators should not be involved in setting targets for scope 3 emissions.

CORPORATES
BHP GROUP LIMITED – ASX BHP, AUSTRALIAN PETROLEUM PRODUCTION AND EXPLORATION ASSOCIATION LIMITED, SANTOS LIMITED – ASX STO, WESTERN AUSTRALIA. ENVIRONMENTAL PROTECTION AUTHORITY, MITSUBISHI CORPORATION, RIO TINTO LIMITED – ASX RIO, FORTESCUE METALS GROUP LIMITED – ASX FMG, GLENCORE PLC, SOUTH32 LIMITED – ASX S32, DELOITTE ENERGY TRANSITION, CLIMATE ACTION 100+

BHP’s carbon hard line

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Original article by Hans van Leeuwen, Peter Ker
The Australian Financial Review – Page: 1 & 26 : 24-Jul-19

BHP CEO Andrew Mackenzie has revealed that the resources group will set targets for its so-called scope 3 carbon emissions as part of a broader strategy to reduce its impact on the environment. He says BHP must take a "product stewardship role" with regard to the emissions across its supply chain, including the emissions generated by the buyers of its commodities. Mackenzie also announced that BHP will spend some $US400m on a climate investment program that will aim to decarbonise its global operations.

CORPORATES
BHP GROUP LIMITED – ASX BHP, AUSTRALASIAN CENTRE FOR CORPORATE RESPONSIBILITY, RIO TINTO LIMITED – ASX RIO, VICSUPER PTY LTD, AUSTRALIAN COUNCIL OF SUPERANNUATION INVESTORS INCORPORATED

Woolies gives up liquor and gambling

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Original article by Sue Mitchell
The Australian Financial Review – Page: 1 & 18 : 4-Jul-19

Woolworths CEO Brad Banducci says the retail giant has been working on the proposed demerger of its liquor and hotels business for more than a year. Endeavour Group will be created via the merger of pubs and poker machines operator ALH Group and Endeavour Drinks, which owns the Dan Murphy’s and BSW liquor chains. Woolworths plans to divest Endeavour Group via a demerger, trade sale or IPO in 2020 and retain a minority stake. Woolworths has attracted criticism over its exposure to poker machines, but Banducci stresses that this was not a driver of the demerger proposal.

CORPORATES
WOOLWORTHS GROUP LIMITED – ASX WOW, ENDEAVOUR GROUP, ALH GROUP LIMITED, DAN MURPHY’S, BWS – BEER WINE SPIRITS, CITIGROUP PTY LTD, UBS HOLDINGS PTY LTD, ABERDEEN ASSET MANAGEMENT LIMITED, LANGTON’S, CELLARMASTER WINES PTY LTD, PINNACLE DRINKS, THE MATHIESON GROUP PTY LTD, BIG W DISCOUNT STORES, THE QUANTIUM GROUP PTY LTD

Metcash stands its ground as share price falls

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Original article by Eli Greenblat
The Australian – Page: 19 : 25-Jun-19

Grocery wholesaler Metcash has posted a net profit of $192.8m for the year to 30 April, following a loss of $148.2m previously. The group’s underlying profit was three per cent lower at $210.3m, but revenue increased by 1.8 per cent to $12.7bn. CEO Jeff Adams says Metcash is confident that its restructuring program, which includes further cost reductions, will pay off. Metcash shares fell 9.8 per cent on 24 June, closing at $2.84.

CORPORATES
METCASH LIMITED – ASX MTS, COLES GROUP LIMITED – ASX COL, WOOLWORTHS GROUP LIMITED – ASX WOW

BHP energises coal to dodge China import restrictions

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Original article by Peter Ker
The Australian Financial Review – Page: 15 & 18 : 19-Jun-19

BHP is looking at ways to upgrade the quality of thermal coal produced at its Mt Arthur mine in New South Wales, in order to increase exports to Japan and South Korea. The move is aimed at offsetting the impact of China’s restrictions on coal imports from Australia. Coal buyers in Japan and Korea generally prefer coal that contains about 6,000 kilocalories of energy per kilogram, whereas the coal that BHP ships to China typically has 5,500 kilocalories of energy per kilogram.

CORPORATES
BHP GROUP LIMITED – ASX BHP, YANCOAL AUSTRALIA LIMITED – ASX YAL, S&P GLOBAL PLATTS

Coles CEO’s $1bn refresh gambit

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Original article by Eli Greenblat
The Australian – Page: 17 & 20 : 19-Jun-19

Coles Group has outlined plans to reduce costs by $1bn over the next four years in a bid to arrest the 20 per cent downturn in earnings over the last two years. The proceeds from the cost-cutting program will be redirected to initiatives such as refurbishing stores and enhancing Coles’ online operations. Coles plans to open about 10 new stores in 2020, compared with 21 in 2019. It also intends to refurbish 75 stores in 2020, up from 50 in fiscal 2019. Coles shares closed 3.44 per cent higher at $13.21 on 18 June.

CORPORATES
COLES GROUP LIMITED – ASX COL, COLES SUPERMARKETS AUSTRALIA PTY LTD, WOOLWORTHS GROUP LIMITED – ASX WOW, ALDI STORES SUPERMARKETS PTY LTD, COSTCO WHOLESALE AUSTRALIA PTY LTD, KMART AUSTRALIA LIMITED, TARGET AUSTRALIA PTY LTD, WESFARMERS LIMITED – ASX WES, VERTIUM ASSET MANAGEMENT PTY LTD