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PRESS DIGEST-Australian Business News - Feb 8

Source: Thomson Reuters Foundation - Thu, 7 Feb 2013 19:57 GMT
Author: Reuters
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Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Andy Penn, chief financial officer for Telstra, said yesterday that the national broadband network (NBN) rollout was tracking to the timetable released last year. Telstra will be compensated as it decommissions its copper network when it is superseded by the NBN and Mr Penn previously said he expects to be able to increase Telstra's return to shareholders with larger fully franked dividends. Page 15.

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Paul Fegan, chief financial officer for Genworth Financial in Australia, said the initial public offering (IPO) of a portion of the Australian operations of the company, rated in the order of A${esc.dollar}800 million, could be delayed until late this year or even later. The IPO is "obviously subject to the valuation by the market" stated Mr Fegan yesterday. Page 15.

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The A${esc.dollar}766 million Maules Creek project of Whitehaven Coal has been delayed as Federal Environment Minister Tony Burke has postponed his decision relating to environmental concerns to April 30 on the advice of his department. Yesterday the New South Wales government announced it had approved the project. Shares in Whitehaven dropped 5 percent to A${esc.dollar}3.02 at close of business Thursday. Page 18.

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Northern Territory Chief Minister Terry Mills is expected to make an offer at a meeting in London overnight Australia time to Rio Tinto chief executive Sam Walsh of a guaranteed gas supply for Rio's Gove alumina refinery. Mr Mills is fighting to save hundreds of jobs as the mining giant is considering mothballing the loss-making plant. Page 18.

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Australia and New Zealand Banking Group issued an initial US${esc.dollar}750 million, of a total US${esc.dollar}1.25 billion, in three-year bonds on Wednesday starting at a margin of 57 basis points over the United States Treasury rate that moved to 65 basis points. "Considering the size of that offshore deal, that pricing suggests that demand for Australian bank paper remains solid," according to credit analysts at National Australia Bank. Page 19.

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The rate for home loans fixed for two years was dropped to 4.99 percent, Westpac Banking Corporation announced yesterday, following the decision on Tuesday by the Reserve Bank of Australia (RBA) to leave the official cash rate at 3 percent. Most banks followed the RBA by reducing fixed rate loans by 0.40 of a percentage point, stated mortgage broker Loan Market. Page 19.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

Telstra now has over 1 million handsets attached to its 4G network, riding on the popularity of the Apple iPhone, and this has helped the telecommunication company to an 8.8 percent increase in first half profit to A${esc.dollar}1.6 billion. Telstra has also experienced a rise in the cost of goods sold, up to A${esc.dollar}1.42 billion, an increase of A${esc.dollar}136 million, and a lowering of its free cashflow, which is down to A${esc.dollar}1.47 billion, a plunge of 17.7 percent. Page 19.

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National Australia Bank yesterday reported a 4 percent increase, compared to the previous corresponding period, in cash profit for the quarter to December 31, taking profit to A${esc.dollar}1.45 billion. Bad debts were down by 10 percent, falling to A${esc.dollar}554 million. The full-year cash profit for the bank could reach a record A${esc.dollar}6 billion, according to analysts at investment research company Morningstar. Page 19.

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Real estate group Mirvac yesterday reduced the value of its projects by A${esc.dollar}273.2 million, a move which rival Stockland is expected to mirror next week as both have substantial exposure to the residential market of Queensland. It is now doubtful that Mirvac will be able to bid for Australand, a move that was expected when it engaged investment bank Citigroup for advice earlier this year. Australand is currently a takeover target for GPT Group. Page 19.

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Engineering company Clough chief executive and Managing Director Kevin Gallagher yesterday appealed to the federal government to create tax incentives for resource companies that use high-end Australian skills. Local content on Australian liquefied natural gas projects was around 50 percent, but the high value engineering and design work was predominately performed by other countries such as the United States and Norway, leaving only about 5 percent locally, Mr Gallagher said. Page 20.

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No Frills, the first private label grocery brand to operate in Australia, is to be reintroduced into the Supa IGA supermarket chain by owner Metcash. The Black & Gold label will be repositioned towards the middle of the market, while the premium range, IGA Signature, continues. "We expect that No Frills  our third-tier discount private label range, will continue to grow," said Metcash chief executive Andrew Reitzer. Page 21.

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A three-minute cartoon video has been released by supermarket leviathan Coles that claims the company has absorbed costs related to selling milk for A${esc.dollar}1 per litre and so it cannot be held responsible for business difficulties affecting dairy farmers. Nick Greene, spokesman for Dairy Farmers Australia, said the campaign did not address properly the impact of discounting on the situation facing farmers and processors. Page 21.

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THE SYDNEY MORNING HERALD (www.smh.com.au)

Underperformances in its Australian business, its television network in the United States and Sky Italia have been noted by News Corp as responsible for an earnings downgrade released yesterday by chief financial officer David DeVoe. "In Australia we have been hammered by an economy we keep hoping has hit bottom, yet seems to find new lows," Chase Carey, chief operating officer, said. Page B1.

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Rapidly dropping prices for renewable energy and increases in the costs of finance for fuel that is emission-intensive make it doubtful that new power stations will use coal, Bloomberg New Energy Finance research indicates. Energy from wind sources was now 14 percent less expensive than from coal-fired power stations and 18 percent less expensive than from gas-fired sources, according to calculations in the report. The disparity is even greater when the carbon tax is put into the equation. Page B4.

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THE AGE (www.theage.com.au)

The Australian Competition and Consumer Commission's response to Virgin Australia's A${esc.dollar}35 million offer for a 60 percent holding in Tiger Singapore's Tiger Australia is a "statement of issues" that requires Virgin to strengthen its current arguments supporting its bid. The regulator is concerned that the deal could reduce competition by returning Australia to an airline duopoly situation, but recognises that without such a deal Tiger may cease operations in this country. Page B3.

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Wagering and gaming company Tabcorp yesterday reported a 61.5 percent drop in first-half profit compared to the previous corresponding period, down to A${esc.dollar}72.9 million, influenced heavily by the loss of its lucrative Victorian poker machine operations. Digital gambling, via smartphone, tablet and the company's website, was up 15.9 percent, with mobile devices used in 28 percent of digital transactions. Page B4.

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