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)
Australian mining services companies are expected to come under further pressure following yesterday's announcement by BHP Billiton that it was cutting jobs and production levels at some of its mining operations. Companies such as Transfield Services, GRD and Leighton Holdings are likely to be affected. Transfield has a A$120 million contract to provide maintenance for a number of BHP's nickel mines, while Leighton has a A$130 million-a-year contract which is due to expire next month. Page 39.
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Telstra chief executive Sol Trujillo yesterday spoke about the opportunities broadband could provide for the Australian health sector, but did not raise the issue of the company's exclusion from the Federal Government's national broadband network tender. The speech was the first time Mr Trujillo had spoken to an Australian audience since the Government's decision last month. Telstra has said the loss of the tender will not have a significant effect on future revenues; however the company's shares have since fallen by 14 percent.
Page 39.
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Rio Tinto has announced it will cut production from its global aluminium operations by a further 6 percent, and cut a further 1100 jobs overseas. Since late last year, Rio has cut aluminium production by 11 percent, or 450,000 tonnes. The moves are part of an effort by the company to cut debt after its purchase of Canadian aluminium producer Alcan. The decision does not affect Rio's Australian mines or smelters, but analysts say cuts in Australia could occur if aluminium prices do not improve.
Page 41.
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Diversified Australian company CSR yesterday announced it will close its two automotive glass production facilities, which are both in Victoria. CSR acquired the business when it purchased Pilkington Australasia in June 2007, and managing director Jerry Maycock said the facilities were 'somewhat marginal' even then. Mr Maycock said that falling volumes and a poor outlook for the automotive sector had led to the decision. The closures will not affect the other divisions of CSR's glass business. Page 42.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Securities and Investments Commission last night said it would extend the ban on short selling financial stocks for six more weeks. The announcement came after the close of the Australian market, which had seen further falls in the value of Australian banks. The regulator said it was extending the ban due to the emerging crisis among British and American banks. The Australian Bankers Association said the extension was a 'prudent decision given the current volatility on the markets.'
Page 25.
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West Australian (WA) Treasurer Troy Buswell yesterday said the state faces 'very, very difficult times,' but refused to concede that the state was increasingly likely to go into recession. BHP Billiton yesterday announced that it will close its Ravensthorpe mine in WA, which will cut Government revenue from royalties by up to A$20 million. Mr Buswell said the loss of revenue was of less concern than the social impact of job losses, and said he expected further mine closures and job cuts.
Page 26.
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Iluka Resources has reported a 16 percent year-on-year decrease in total mineral sands production to 633,418 tonnes for the three months to December - in line with guidance and expectation. However, the mineral sands miner has decided to close its West Australian Wagerup mine this month, while production at the nearby Waroona mine will be completed by the fourth quarter of 2009. 'Both of these operations are now at a stage where the production output is mainly lower value sulphate ilmenite,' the company said yesterday. Page 26.
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Australian fashion retailer Country Road expects net profit for the first half of fiscal 2009 to increase by 70 to 80 percent to between A$13.6 million and A$14 million. Chief executive Ian Moir said the company had strong sales growth in December, but he was aware that many analysts say the economy is yet to feel the full impact of the global economic downturn.
Country Road has improved its margins through tight cost controls, and Mr Moir said that 'our business is now more capable of negotiating a slowdown.' Page 27.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Analysts say the Federal Government is facing the prospect of a significant increase in unemployment, creating further problems for the Australian economy. The country has till now been able to avoid the fate of overseas economies due to its stronger financial system and high employment. However, BHP Billiton yesterday announced 6000 job cuts globally, and over half of these will come from projects in Australia, while CSR and David Jones also announced job cuts. Page 29.
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West Australian (WA) mining company CBH Resources has dropped its takeover bid for fellow WA miner Perilya. CBH said it still believes the acquisition of Perliya's assets would have created long-term value for both companies' shareholders, but that concerns about Perilya's financial position and the target's operating strategy had led it to pull out of the bid. Perilya will ask shareholders for approval to go ahead with a rival deal which will give Chinese smelter Zhongjin a 50.1 percent stake in the company. Page 29.
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Media shares fell on the Australian sharemarket in response to growing fears of a sharp reduction in advertising spending due to the economic downturn grew. Retailers David Jones and Harvey Norman have indicated they are expecting a tough year, and Goldman Sachs JBWere said David Jones management have predicted there would be a 'significant reduction' in advertising budgets. News Corp shares fell by A30 cents to A$12.31 yesterday, while Fairfax Media shares were down by A9 cents to A$1.39. Page 29.
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Hans Redeker, the global head of currency strategy at BNP Paribas, has warned that the Australian dollar will continue to fall as key export markets in Asia feel the full impact of the global financial crisis. Last January, when many analysts were predicting that the Australian dollar would reach parity with the United States dollar, Mr Redeker predicted that it would instead fall to near US65 cents, its current level. Mr Redeker is now predicting that the Australian dollar may fall as low as US57 cents within six months. Page 30.
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THE AGE (www.theage.com.au)
Foreign banks are continuing to scale back their exposure to Australia, with Canada's Toronto-Dominion yesterday announcing it would close its local sales, trading and debt-origination business. The company will continue to service its existing Australian lending portfolio of A$2.2 billion, but all other operations will be relocated to Singapore. The Federal Government this week said it will help Australian companies access finance required due to the withdrawal of international banks. Page 25.
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Australian upmarket retailer Myer yesterday claimed 'our market share has grown' compared to rival David Jones. The company, controlled by private equity firm TPG, made the claim after David Jones announced that like-for-like sales for the past six months had fallen by 8.1 percent, while Myer expects its own sales to have fallen by 3.9 percent. The claim, made by Myer chief executive Bernie Brookes, was challenged by David Jones, which said the comparison was not valid. Page 25.
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Macquarie Airports, a listed satellite company of Macquarie Group, must organise the funding of an A$870 million term facility by the end of the year. A spokeswoman for Macquarie Airports said 'we are very conscious about managing our debt, particularly in the current environment.' A number of Australian companies face refinancing risks this year, with uncertainty about the state of credit markets and the ability of both Australian and international banks to lend causing concern. Page 28.
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David Jones, Australia's second-largest retailer, has cut profit estimates for 2009 and 2010 financial years to between zero and 5 percent growth, down from the previous forecast of 5 percent to 10 percent. The company also announced it will cut 150 jobs, mostly from its head office in Sydney. Chief executive Mark McInnes said that he expects the coming winter to be 'particularly rough.' Shares in David Jones fell yesterday, at one point falling to 10 percent below the day's starting price.
Page 25.
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Keywords: DIGEST AUSTRALIA BUSINESS (Sydney Newsroom +61-2 9373 1800; sydney.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
Australian mining services companies are expected to come under further pressure following yesterday's announcement by BHP Billiton that it was cutting jobs and production levels at some of its mining operations. Companies such as Transfield Services, GRD and Leighton Holdings are likely to be affected. Transfield has a A$120 million contract to provide maintenance for a number of BHP's nickel mines, while Leighton has a A$130 million-a-year contract which is due to expire next month. Page 39.
- - - -
Telstra chief executive Sol Trujillo yesterday spoke about the opportunities broadband could provide for the Australian health sector, but did not raise the issue of the company's exclusion from the Federal Government's national broadband network tender. The speech was the first time Mr Trujillo had spoken to an Australian audience since the Government's decision last month. Telstra has said the loss of the tender will not have a significant effect on future revenues; however the company's shares have since fallen by 14 percent.
Page 39.
- - - -
Rio Tinto has announced it will cut production from its global aluminium operations by a further 6 percent, and cut a further 1100 jobs overseas. Since late last year, Rio has cut aluminium production by 11 percent, or 450,000 tonnes. The moves are part of an effort by the company to cut debt after its purchase of Canadian aluminium producer Alcan. The decision does not affect Rio's Australian mines or smelters, but analysts say cuts in Australia could occur if aluminium prices do not improve.
Page 41.
- - - -
Diversified Australian company CSR yesterday announced it will close its two automotive glass production facilities, which are both in Victoria. CSR acquired the business when it purchased Pilkington Australasia in June 2007, and managing director Jerry Maycock said the facilities were 'somewhat marginal' even then. Mr Maycock said that falling volumes and a poor outlook for the automotive sector had led to the decision. The closures will not affect the other divisions of CSR's glass business. Page 42.
- - - -
THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Securities and Investments Commission last night said it would extend the ban on short selling financial stocks for six more weeks. The announcement came after the close of the Australian market, which had seen further falls in the value of Australian banks. The regulator said it was extending the ban due to the emerging crisis among British and American banks. The Australian Bankers Association said the extension was a 'prudent decision given the current volatility on the markets.'
Page 25.
- - - -
West Australian (WA) Treasurer Troy Buswell yesterday said the state faces 'very, very difficult times,' but refused to concede that the state was increasingly likely to go into recession. BHP Billiton yesterday announced that it will close its Ravensthorpe mine in WA, which will cut Government revenue from royalties by up to A$20 million. Mr Buswell said the loss of revenue was of less concern than the social impact of job losses, and said he expected further mine closures and job cuts.
Page 26.
- - - -
Iluka Resources has reported a 16 percent year-on-year decrease in total mineral sands production to 633,418 tonnes for the three months to December - in line with guidance and expectation. However, the mineral sands miner has decided to close its West Australian Wagerup mine this month, while production at the nearby Waroona mine will be completed by the fourth quarter of 2009. 'Both of these operations are now at a stage where the production output is mainly lower value sulphate ilmenite,' the company said yesterday. Page 26.
- - - -
Australian fashion retailer Country Road expects net profit for the first half of fiscal 2009 to increase by 70 to 80 percent to between A$13.6 million and A$14 million. Chief executive Ian Moir said the company had strong sales growth in December, but he was aware that many analysts say the economy is yet to feel the full impact of the global economic downturn.
Country Road has improved its margins through tight cost controls, and Mr Moir said that 'our business is now more capable of negotiating a slowdown.' Page 27.
- - - -
THE SYDNEY MORNING HERALD (www.smh.com.au)
Analysts say the Federal Government is facing the prospect of a significant increase in unemployment, creating further problems for the Australian economy. The country has till now been able to avoid the fate of overseas economies due to its stronger financial system and high employment. However, BHP Billiton yesterday announced 6000 job cuts globally, and over half of these will come from projects in Australia, while CSR and David Jones also announced job cuts. Page 29.
- - - -
West Australian (WA) mining company CBH Resources has dropped its takeover bid for fellow WA miner Perilya. CBH said it still believes the acquisition of Perliya's assets would have created long-term value for both companies' shareholders, but that concerns about Perilya's financial position and the target's operating strategy had led it to pull out of the bid. Perilya will ask shareholders for approval to go ahead with a rival deal which will give Chinese smelter Zhongjin a 50.1 percent stake in the company. Page 29.
- - - -
Media shares fell on the Australian sharemarket in response to growing fears of a sharp reduction in advertising spending due to the economic downturn grew. Retailers David Jones and Harvey Norman have indicated they are expecting a tough year, and Goldman Sachs JBWere said David Jones management have predicted there would be a 'significant reduction' in advertising budgets. News Corp shares fell by A30 cents to A$12.31 yesterday, while Fairfax Media shares were down by A9 cents to A$1.39. Page 29.
- - - -
Hans Redeker, the global head of currency strategy at BNP Paribas, has warned that the Australian dollar will continue to fall as key export markets in Asia feel the full impact of the global financial crisis. Last January, when many analysts were predicting that the Australian dollar would reach parity with the United States dollar, Mr Redeker predicted that it would instead fall to near US65 cents, its current level. Mr Redeker is now predicting that the Australian dollar may fall as low as US57 cents within six months. Page 30.
- - - -
THE AGE (www.theage.com.au)
Foreign banks are continuing to scale back their exposure to Australia, with Canada's Toronto-Dominion yesterday announcing it would close its local sales, trading and debt-origination business. The company will continue to service its existing Australian lending portfolio of A$2.2 billion, but all other operations will be relocated to Singapore. The Federal Government this week said it will help Australian companies access finance required due to the withdrawal of international banks. Page 25.
- - - -
Australian upmarket retailer Myer yesterday claimed 'our market share has grown' compared to rival David Jones. The company, controlled by private equity firm TPG, made the claim after David Jones announced that like-for-like sales for the past six months had fallen by 8.1 percent, while Myer expects its own sales to have fallen by 3.9 percent. The claim, made by Myer chief executive Bernie Brookes, was challenged by David Jones, which said the comparison was not valid. Page 25.
- - - -
Macquarie Airports, a listed satellite company of Macquarie Group, must organise the funding of an A$870 million term facility by the end of the year. A spokeswoman for Macquarie Airports said 'we are very conscious about managing our debt, particularly in the current environment.' A number of Australian companies face refinancing risks this year, with uncertainty about the state of credit markets and the ability of both Australian and international banks to lend causing concern. Page 28.
- - - -
David Jones, Australia's second-largest retailer, has cut profit estimates for 2009 and 2010 financial years to between zero and 5 percent growth, down from the previous forecast of 5 percent to 10 percent. The company also announced it will cut 150 jobs, mostly from its head office in Sydney. Chief executive Mark McInnes said that he expects the coming winter to be 'particularly rough.' Shares in David Jones fell yesterday, at one point falling to 10 percent below the day's starting price.
Page 25.
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Keywords: DIGEST AUSTRALIA BUSINESS (Sydney Newsroom +61-2 9373 1800; sydney.newsroom@reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.