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PRESS DIGEST-Australian Business News - Jan 16

Source: Thomson Reuters Foundation - Tue, 15 Jan 2013 21:41 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)

Rio Tinto yesterday announced that it produced 253 million tonnes of iron ore in 2012, beating its forecast for the full-year, although its earnings margins were cramped by rising expenses, the historically high Australian dollar and falling prices. The global miner's full-year underlying earnings are expected to fall to US${esc.dollar}9.32 billion, 40 percent lower than the record US${esc.dollar}15.5 billion reported in 2011. Lyndon Fagan, analyst at investment bank JPMorgan, predicted Rio would also book "several billion dollars" of extra impairment charges on its aluminium business next month. Page 11.

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Origin Energy yesterday announced it would cease trying to obtain a partner for a wind farm venture in Victoria, with the generator attempting to sell off its holding in the A${esc.dollar}23 billion Australia Pacific liquefied natural gas (APLNG) venture. Grant King, managing director of Origin, is expected to announce to the market that Origin will sell between 7 percent and 9 percent stake in APLNG. The sale is required so Origin can retain its BBB+ credit rating, according to analysts. Page 11.

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PCCW, former Asian joint venture partner with telecommunications giant Telstra, has advanced to the second round of bidding for contractor Leighton Holdings' infrastructure assets, which are valued as high as A${esc.dollar}1 billion by analysts. The Hong Kong-listed media, technology and telecommunications company is competing for assets including data centre owner Metronode, cloud computing group Infoplex and fibre company Nextgen Nextworks. Page 11.

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David Malone, chief executive of V8 Supercars, yesterday said the organisation was happy with the amount it received from Seven Network for the motorsport's broadcast rights, even though the free-to-air broadcaster is paying around A${esc.dollar}10 million less upfront annually under the new two-year agreement. This is the first time in recent history that a recent sports broadcast rights deal has receded in value, and follows a surge in the value of media rights for the National Rugby League and the Australian Football League. Seven and V8 Supercars, however, will split advertising revenue under the terms of the deal. Page 13.

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

The most recent yearly accounts for Ellerston Capital have revealed that billionaire James Packer is no longer a board member of the investment and funds management group, while Ellerston's office has relocated from the Packer office on Sydney's Park Street to Elizabeth Street. The management group was often referred to as the investment and fund manager of the Packer family, but Mr Packer's Consolidated Press Holdings private company has sold down its 100 percent stake in Ellerston. An Ellerston staff trust lead by Ashok Jacob now owns 75 percent of the business. Page 17.

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Rio Tinto yesterday published its fourth-quarter production figures, with the global miner's iron ore division outperforming previous full-year expectations. Profits for the second half of the 2012 calendar year are expected to fall to about half of the US${esc.dollar}7.7 billion generated the same time a year ago, due to falling iron ore and coal prices. "Across the group we are taking action to roll back unsustainable cost increases," chief executive Tom Albanese said. Page 17.

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Ten Network has appointed Rebekah Horne, a former executive at DMG Radio, as its new chief digital officer in an attempt to ease concerns about the free-to-air broadcaster's plans for digital media. "We are delighted to welcome someone with Rebekah's experience and skills to Network Ten," Ten chief executive James Warburton said. He added that the struggling network had gained ground on its rivals over the last year thanks to its digital media business, the growth of which will be a high priority for Ms Horne. Page 17.

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The Australian Securities and Investments Commission has called on journalists and investors to be more vigilant when acting on information from press releases that could contain deceptive information. Greg Medcraft, chairman of the corporate regulator, said in his first comments since the Whitehaven Coal hoax last week, which saw the company's market capitalisation fall by A${esc.dollar}300 million in half an hour, that investors should adopt a "sceptical approach" to any releases that exhibited unusual corporate behaviour. Page 17.

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

AMP Capital, one of the most influential fund managers in Australia, yesterday released a report critical of UGL, Linc Energy, CuDECO and Cabcharge for overpaying its executives, and recommended shareholders to register a "second strike" against the four companies. Ian Woods, head of responsible investing at AMP Capital, said the number of listed firms looking to converse with the group had substantially increased this reporting season. The fund manager had previously raised concerns about the two-strike rule, but noted it produced a healthy focus on executive remuneration. Page B1.

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Fortescue Metals Group has walked away from a proposed agreement that would have seen the iron ore producer diversify into West Australia's shale gas industry. Shale junior Oil Basins Limited said yesterday that Fortescue would no longer become a cornerstone investor in the group, only two months after the deal, which saw shares in Oil Basins jump by 35 percent, was announced. A spokeswoman for Fortescue said that "we have been unable to agree acceptable terms" for the Oil Basin gas assets in the state. Page B2.

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A survey published yesterday by consultants Mercer has rated the Perpetual Wholesale Ethical SRI Fund as the best share fund in Australia for 2012, after it delivered returns of almost 40 percent. The BlackRock Equitised Long Short Fund was the runner-up with a 30.6 percent return, while the Perpetual Wholesale Share-Plus Long-Short Fund recorded returns of 30.1 percent. The Australian stockmarket gained 19.7 percent last year, with healthcare performing best with growth of 47.5 percent. Page B2.

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Shareholders in the Australian Infrastructure Fund (AIX) yesterday voted to sell the fund's local and European stakes in airport assets to the Federal Government's Future Fund for A${esc.dollar}2 billion. The sovereign investment fund will assume control of AIX's holding in Northern Territory Airports, Queensland Airports, Perth Airport and the Australian Pacific Airports Corporation, which owns airports in Launceston and Melbourne. Page B2.

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THE AGE (www.theage.com.au)

United States apparel group VF Corporation, which owns brands such as North Face, Vans and Timberland, revealed in a statement released yesterday that it was only interested in acquiring Billabong International's brand, not the clothing manufacturer's retail network. Altamont Capital, VF Corp's private equity partner, has expressed interest in Billabong's remaining assets. The two parties have launched a A${esc.dollar}1.10 a share, or A${esc.dollar}527 million indicative offer, for Billabong, the news of which saw Billabong shares gain 16 percent to close at A98 cents yesterday. Page B19.

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Despite being hailed as the "most profitable and best low-cost network based in Singapore" by parent company Qantas Airways, discount airline Jetstar Asia's profit plunged by 80 percent in the last financial year according to accounts lodged with regulators in Singapore. Rival budget carriers Scoot, Tiger Airways and AirAsia competed fiercely with Jetstar Asia over the period. Jetstar Asia's expenditure on fuel also rose to S${esc.dollar}214 million, up from S${esc.dollar}128 million the financial year prior, while aircraft operating expenses increased by 29 percent. Page B19.

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Australia and New Zealand Banking Group (ANZ) customers will be able to use the wide-ranging Asian-Pacific networks of China UnionPay in Australia, after the lender agreed to an initial deal with the payment system operator. ANZ, which is increasing its concentration on Asia, has lagged behind other major Australian banks in opening up its merchant and automatic teller machine network to UnionPay cardholders. Almost all bank customers in China have an account with UnionPay. Page B19.

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Harry Winston, the North American diamond company partnering with Rio Tinto in the Canadian Diavik mine, yesterday expressed interest in acquiring the global miner's holding in the site. "We are aware that Rio Tinto wants to sell its 60 percent interest in the Diavik mine where we already own the 40 percent, that's an obvious one for us to look at as long as the price is right," Robert Gannicott, chief executive of Harry Winston, said. Page B18.

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