Tag Archives: profit

Qantas climbs back to profit

Updated February 21, 2013 20:02:09

Qantas has bounced back from a steep full-year loss last financial year, to post a $111 million half-year profit.

The airline’s net profit after tax for the six months to the end of December 2012 jumped 164 per cent on the same period a year earlier, and was up from a $287 million loss in the previous half-year.

Underlying profit before tax, which also excludes most one-off costs and gains, was up more than 10 per cent on the same period last year to $223 million.

However, both the underlying and statutory profits include $125 million in revenue from an agreement negotiated between Qantas and Boeing in August 2012 to restructure the airline’s order for B787 Dreamliners.

The airline’s chief executive, Alan Joyce says the cancellation of 35 Dreamliners and the sale of its half share in road-freight venture StarTrack is paying off.

“Today’s result includes $125 million of compensation income from Boeing,” he said.

“This compensation settlement, negotiated by Qantas management, recognises the opportunity cost to our business incurred by the delay in the delivery of the 787s, which affected Jetstar, Qantas International and Qantas domestic.”

The major difference between underlying and statutory profit was $136 million in one-off “transformation costs”, as the airline restructures some of its businesses.

The company says all parts of its business were profitable in the half, except Qantas International which posted a before tax loss of $91 million.

However, it noted that its international division cut its losses by 65 per cent in the half compared with a year earlier.

The airline’s chief executive Alan Joyce says Qantas is now starting to reap the benefits of its restructuring program, which resulted in large short-term costs when management grounded the airline in response to staff industrial action.

“In total, the group achieved $172 million in transformation benefits in the first half of 2013,” he noted in the report.

“The operating environment remains complex and volatile, but we are now beginning to realise the benefits of the tough decisions that we have made over the past 18 months.”

Despite this improvement, Qantas has warned its outlook for the current six months remains challenging and volatile, and has declined to provide profit guidance due to uncertainty around fuel costs, competition, exchange rates and the global economy.

The airline has elected not to pay an interim dividend, but investors are still happy with the result, pushing Qantas shares up 4 per cent to $1.68 by 10:32am (AEDT).

Topics: business-economics-and-finance, company-news, air-transport, australia

First posted February 21, 2013 09:20:00

Fairfax profit rises on one-off gains

Updated February 21, 2013 15:32:33

Media group Fairfax has reported a huge surge in its half-year profit, but says weak demand in the advertising market is still restricting its earnings.

For the six months to the end of December, Fairfax has made $386.3 million.

That was up almost 300 per cent compared to its profit for the same period the year before.

However, the vast bulk of the profit ($312 million of it) came from discontinued operations, making much of it a one-off gain.

In fact, excluding significant one-off gains and losses, the company’s underlying profit fell from $136 million to $83 million.

Revenue was down from $1.18 billion to $1.1 billion, however the publisher’s expenses also fell by around $80 million as it slashed staff and moved to close major printing presses.

The company says its restructure and slimming down of the business contributed to its profit result, with a 10 per cent reduction in staff and a sell-off of some businesses which reduced debt from a around a billion dollars to $200 million.

Fairfax’s chief executive Greg Hywood says the company now has the strongest balance sheet in the industry, but there are more cost savings to be made.

“We are finding smarter ways to work that deliver us better outcomes and save us money,” he said.

“We are taking a fresh look at territories long considered sacred cows and smashing silos that long seemed untouchable. We are pursuing additional structural initiatives and cost savings beyond those currently envisaged.”

The company has cut its fully-franked interim dividend to 1 cent per share from 2 cents per share.

Fairfax shares were down 2.75 per cent to 53 cents by 10:25am (AEDT).

Topics: business-economics-and-finance, company-news, media, australia

First posted February 21, 2013 10:29:55

ICBC Middle East 2012 profit jumps 69pc

RIYADH: The Middle East branch of Industrial and Commercial Bank of China, the world’s biggest lending bank, enjoyed surging profits and asset growth in 2012, it said on Saturday, underscoring increasingly close economic ties between Beijing and the Gulf.

The bank’s Middle East unit, based in Dubai, said pre-tax profit surged 69 percent in 2012 from 2011 to $54 million, while operating income jumped 47 percent to $72 million.

Total assets at end of 2012 were $3.96 billion, a rise of 29 percent over the same figure at the end of 2011, it said in an emailed statement.

Annual trade between China and the UAE grew fifteen-fold to $37 billion from 2000 to 2011, Hong Kong Monetary Authority chief executive Norman Chan told China’s official Xinhua news agency last month.

Most of that trade is conducted in dollars, but a growing proportion is also starting to be carried out in yuan.

Earlier this month, Dubai’s largest bank, Emirates NBD, said it had started offering yuan accounts.

Copyright Reuters, 2013

Origin lays off 850 staff to counter profit fall

Updated February 21, 2013 14:43:12

Origin Energy has confirmed that it will axe a total of 850 jobs by the end of the year.

Around 500 of those positions have already gone, as the company sharpens its focus on containing costs.

The announcement came as the energy retailer and gas producer posted a half-year profit slump of 34 per cent, to $524 million.

Origin expects its full-year profit to fall by 10 to 15 per cent.

The company will pay its shareholders an interim, fully franked dividend of 25 cents per share.

Origin Energy shares slumped 8.6 per cent on the result to $11.32 by 12:44pm (AEDT).

Topics: business-economics-and-finance, company-news, electricity-energy-and-utilities, oil-and-gas, unemployment, australia, qld

First posted February 21, 2013 12:51:20

Santos shares rise despite profit dip

Posted February 22, 2013 15:51:05

Rising development costs have dragged down profits for oil and gas producer Santos.

The company has reported a 31 per cent slide in full-year profit to $519 million.

In response, Santos says it is focused on reducing costs and cut its workforce by more than 100 staff over the year.

Santos chief financial officer Andrew Seaton says development costs should start to fall soon.

“The 2012 result was lower than we envisaged due to timing of expenditure across the broader portfolio,” he said.

“Our forecast 2013 spend of circa $4 billion will represent the peak year of capex ahead of the start up of PNG LNG in 2014 and GLNG [Gladstone LNG] in 2015.”

Santos says the New South Wales Government’s legislation against coal seam gas exploration in some areas does not affect its plans.

This week the New South Wales Government announced a two kilometre coal seam gas exclusion zone around current and planned residential areas.

The company’s chief executive David Knox says the changes to exploration rules will not change the company’s plans.

“The area we really want to start developing is in the Pilliga Forest, and that area is unaffected by the two kilometre zone,” he said.

“What we are intending to do is start basically doing an evaluation and appraisal wells into that area.”

Topics: business-economics-and-finance, company-news, oil-and-gas, australia, sa

AMP posts modest profit growth

Posted February 21, 2013 08:53:55

Wealth management firm AMP says it expects last year’s challenging business conditions to continue in 2013, after announcing a small rise in its annual profit.

The company has posted a net profit of $704 million dollars for 2012, a 2 per cent rise from its profit the year before.

AMP will pay a partially franked final dividend of 12.5 cents, taking its total full-year dividend to 25 cents.

Topics: business-economics-and-finance, company-news, banking, insurance, australia

‘Stars align’ to deliver disaster free IAG profit

Updated February 21, 2013 13:55:09

Insurance Australia Group has more than tripled its half-year profit, with the company receiving fewer than expected insurance claims.

In the six months to the end of December, IAG made an after-tax profit of $461 million.

That was up 220 per cent on the company’s profit during the same period the year before.

IAG says the six month period saw natural peril claim costs come in $180 million below the company’s allowance.

Morningstar analyst Ravi Reddy says everything went right for IAG towards the end of last year.

“All the stars aligned for IAG during the six months period to 31 December 2012,” he said.

“A strong business performance, a benign claims environment and favourable investment markets have seen IAG deliver a stellar first-half 2013 result.”

Investors agree, pushing IAG shares up 3 per cent to $5.58 by 10:58am (AEDT).

However, IAG’s chief executive, Mike Wilkins, says the second-half of the financial year will be hit by some big claims.

“Notwithstanding our first-half experience, we’re not about to assume that that situation will continue and, indeed in the opening weeks of calendar 2013, we’ve already seen significant natural peril activity in Australia,” he said.

“As a result, we currently believe that it’s prudent to maintain our full-year natural peril cost assumption at $620 million, excluding the UK.”

Topics: business-economics-and-finance, company-news, insurance, australia

First posted February 21, 2013 11:03:04

Morocco BCP’s 2012 profit up 5.6pc

00095RABAT: Banque Centrale Populaire (BCP) , one of Morocco’s three biggest lenders, said on Wednesday that its net profit grew 5.6 percent to 3.21 billion dirhams ($384 million) in 2012.


Deposits increased 10 percent to 201.9 billion dirhams which represented a 27.9 percent market share, the bank added in a statement.


BCP, in which the government is a shareholder, collected 74.2 billion dirhams of remittances from Moroccans living abroad during the year a 4.5 percent increase although total transfers by migrant workers to the country fell 4 percent.


The bank said it set aside an additional 300 million dirhams in provisions for non-performing loans at the end of December, so that its NPLs were 77 percent covered compared to 63 percent in 2011.


Net profit attributable to shareholders rose 2.7 percent to 1.9 billion dirhams.


Last October, credit rating agency Standard & Poor’s revised its outlook for the bank to negative from stable, after taking the same decision for Morocco’s sovereign outlook.

Copyright Reuters, 2013

Pacific Brands returns to profit


Clothing, footwear and linen company Pacific Brands has swung from a loss to a profit, despite a fall in its overall sales.


The company, which makes brands including Bonds, Hard Yakka, King Gee, Berlei, Clarks, Hush Puppies and Sheridan, made a net profit of $38.9 million in the six months to the end of December.


That is a huge turnaround from its $362.4 million loss during the same period in 2011.


Chief executive John Pollaers says underwear sales have been a standout, while its workwear labels have suffered from a downturn in market conditions.


“The clear operational highlight of the first-half result was the strong performance of Bonds and the broader underwear group,” he said.


“It’s only early days, but we’re most encouraged by that performance. What it also shows is that good results can be obtained from strategic focus, discipline and investment in great brands.”


Mr Pollaers says the company’s focus on operating and financial discipline across the business has started to pay off.


“There are some encouraging signs, but further performance improvement is obviously required. We still have a way to go,” he said.


“The good news is that we are getting increasingly clear on where the opportunities are and, more particularly, how we’re going to realise them.”


Pacific Brands shares had jumped 5.5 per cent to 77 cents by 10:23am (AEDT).

Topics: business-economics-and-finance, company-news, textiles, retail, australia

First posted February 18, 2013 10:22:46

Lend Lease profit rises, shares fall


Property developer Lend Lease has reported a significant rise in its half-year profit, boosted by the Barangaroo development in Sydney’s CBD.


In the six months to the end of December, the company made a net profit of $302.3 million after tax, on revenue of $6.25 billion.


That is up almost 39 per cent compared to its profit during the same period a year earlier.


Lend Lease says the result has been boosted by earnings from the first two commercial towers at Barangaroo South on the western edge of Sydney’s CBD.


The company’s Australian division increased its profit by $97 million to $304 million, with Lend Lease also winning work on the proposed new Sydney Convention Centre and Sunshine Coast University Hospital.


The company’s Asian division posted a $4.5 million fall in profit to $24.3 million, European profits were up $17.5 million to $60.5 million, American profits were up nearly $8 million to $26 million, while the group services division posted a loss of $80 million.


The company says it will pay an unfranked dividend of 22 cents per share on March 27, with an ex-dividend date of March 4.


Lend Lease shares were down 2.7 per cent to $10.40 by 12:59pm (AEDT).

Topics: business-economics-and-finance, company-news, building-and-construction, australia, sydney-2000

Coke result no fizzer, despite headline profit fall

Updated February 19, 2013 12:11:47

Coca-Cola Amatil has recorded a drop in full year profits, hurt by the strong Australian dollar and weakness in its tinned food business.

Net profit dropped more than 22 per cent to $459.9 million, due to nearly $100 million dollars in expenses at SPC Ardmona.

Those costs include write-downs and restructuring charges, as well as the high dollar and lower fresh fruit prices.

Excluding those items, Coca-Cola Amatil says its annual net profit rose by 5 per cent to $558.4 million.

The company’s managing director, Terry Davis, says the result was excellent given the tough trading conditions over the period.

“The standout performer was once again Indonesia and PNG, with double-digit volume and earnings growth, while Australia delivered solid volume and earnings growth and increased market share despite a difficult trading environment,” he noted in the report.

“Earnings growth was moderated by disappointing performances from New Zealand and SPC Ardmona with the ongoing impact of the high Australian dollar on the competitiveness of SPC Ardmona leading to a write-down of assets and goodwill in the business.”

The company says its Australian soft drink business was solid, despite heavy discounting by its major competitor, and Coca-Cola Amatil increased market share despite a widening of the retail price gap of over 10 percentage points to its nearest rival.

The firm is also anticipating a boost to profits from its re-entry into the Australian beer market in December 2013.

Shareholders will get a special dividend of 3.5 cents for the period, along with a partially-franked final dividend of 32 cents, bringing the total dividend up to 59.5 cents a share for the whole of 2012.

Investors welcomed the special dividend and underlying profit growth, pushing Coca-Cola Amatil shares up 2.2 per cent to $13.93 just after 11:00am (AEDT).

Topics: business-economics-and-finance, company-news, food-and-beverage, australia

First posted February 19, 2013 11:15:00

Fortescue shares slide on profit numbers

By finance reporter Elysse MorganUpdated February 20, 2013 14:38:15

Profit at Western Australian iron ore company Fortescue Metals almost halved in the first six months of this financial year, as iron prices plummeted.

First half net profit fell 40 per cent to $462 million.

The company says its expansion plans are continuing and increased production helped to offset the record slump in iron ore prices last year.

Chief executive Nev Power also says there has been a better than expected recovery in iron ore prices over the last few months.

“It has recovered more strongly than we anticipated, and I think there are a number of underlying factors in that there is a very increased confidence in the new leadership in China to continue the urbanisation and infrastructure building and that’s translating to a lot of confidence and has restarted a lot of construction activity in China,” he observed.

Investors will not receive an interim dividend, but the company says it will consider a full-year dividend if iron ore prices improve.

Investors are selling down the stock as a result, it was off 3.6 per cent to $4.995 by 2:36pm (AEDT).

Topics: business-economics-and-finance, company-news, iron-ore, australia, wa

First posted February 20, 2013 13:05:35

BHP chief quits after profit slide

Updated February 20, 2013 14:28:55

BHP Billiton chief executive Marius Kloppers will stand aside in May, after the company’s profit halved.

The world’s biggest miner posted a 58 per cent fall in first-half net profit to $US4.24 billion, while the company’s underlying earnings – which excludes one-off write-downs and gains – dropped 43.4 per cent to $US5.68 billion.

The result came in broadly in line with average analyst forecasts of a $US5.72 billion underlying profit, according to a Bloomberg survey.

BHP Billiton’s revenue fell 14 per cent compared to the same period a year earlier to $US32.2 billion, as commodity prices generally softened.

The company says its profit was squeezed not only by the fall in commodity prices, but also due to the strength of currencies in major producing nations such as Australia and Chile, which pushed up local costs.

BHP Billiton also confirmed to the ABC that it was one of the companies that paid a Minerals Resource Rent Tax instalment to the Federal Government in January.

The miner says it paid a total of $77 million in MRRT in respect of the first six months of the tax being in operation.

However, the company says it is moving to contain costs, and also announced or completed $US4.3 billion in asset sales in the half-year to December 31.

BHP Billiton also says it expects a “modest improvement in the global economy” over the next 12 months as stimulus stabilises China’s growth and the US economy makes steady progress.

However, this rise in growth is likely to be offset by an increase in the supply of key commodities as new or expanded mines come online, limiting upside in commodity prices.

BHP has been part of this increasing supply, with the company undertaking 20 new projects, most of which are expected to enter production before the end of the 2015 financial year.

Today’s announcement that Mr Kloppers will step aside from the company’s top job on May 10 has ended months of speculation about when BHP Billiton would install a new leader.

The mining giant’s new chief executive will be the company’s current head of non-ferrous Andrew Mackenzie, who joined BHP Billiton in 2008, after previous experience working with BP and Rio Tinto.

Mr Kloppers has been in the top role for around five-and-a-half years and with BHP Billiton for almost 20, and will stay with the company until October 2013 to assist with the transition.

BHP Billiton chairman Jac Nasser says Mr Kloppers has made the company safer and stronger.

“Marius was appointed chief executive just prior to the global financial crisis. Despite an exceptionally difficult economic environment during his tenure, Marius and his team have delivered for shareholders, significantly outperforming our peers in terms of total shareholder returns,” he said in a statement.

“He drove new investments into next generation opportunities including US onshore gas and liquids and created one of the most valuable companies in the world.”

BHP Billiton shares have not moved much in early trade in response to either the profit results or the departure of Mr Kloppers – on the Australian market, its shares were down 0.4 per cent to $38.84 by 10:25am (AEDT), with much larger falls for rival miners such as Rio Tinto which was down 1.2 per cent.

Fat Prophets commodities analyst David Lennox says that is because BHP’s profit was in line with analyst expectations.

“Overall, I think the market won’t be in any way surprised by the results that they have seen,” he told ABC News Online.

However, Mr Lennox says the timing of the leadership transition was probably somewhat earlier than many expected.

“It was, perhaps, a little bit of a surprise,” he said.

“We were aware that BHP had activated a succession plan to look at eventually replacing Mr Kloppers as CEO, and we do think that there may have been a little [more] time for that particular plan to be executed.”

Mr Lennox says Marius Kloppers’s departure was under very different circumstances to that of former Rio Tinto boss Tom Albanese.

“There were very good reasons I guess for Tom Albanese to stand aside, and that was basically the $14 billion in write-downs out of the balance sheet, I guess a CEO can’t preside over a company and lose that quantity of value out of his balance sheet,” he explained.

“For BHP there’s no such circumstances, the write-downs were very controllable, very manageable.”

However, fund manager Roger Montgomery says Marius Kloppers has also been successful at destroying shareholder value in different ways.

“In 2006 the company earned $13.6 billion. In 2013 analysts estimate earnings will be $13.8 billion and, despite the fact there has been no net growth in profits, investors have contributed massive amounts of additional equity – from $32 billion in 2006 to $64 billion in 2012 and debt has risen from $12.9 billion to $27.6 billion,” he wrote in a note on the results.

“In other words BHP is significantly less profitable than it was in 2006.”

Topics: business-economics-and-finance, company-news, corporate-governance, mining-industry, australia, wa

First posted February 20, 2013 08:38:04

Suncorp shares fall despite profit rise

Posted February 20, 2013 14:07:54

Profit at Suncorp Bank has jumped by almost half, driven by fewer claims in its insurance business.

The bank made $574 million in the first half of its financial year, which is a 48 per cent improvement on its prior result.

Earnings at its insurance business jumped, as fewer natural disasters brought down the number of claims.

However, the banking and insurance company’s shares slipped 2 per cent to $11.44 by 2:05pm (AEDT).

Topics: business-economics-and-finance, company-news, banking, insurance, australia, qld

Amcor announces job cuts despite profit growth


Packaging company Amcor has announced around 100 job losses, despite posting a 16 per cent rise in profit.


The company says the Thomastown site, in Melbourne’s north, will close mid-year, resulting in about 80 staff redundancies.


Another 17 jobs will be lost at North Laverton, also in Melbourne.


The job cuts come despite the firm posting a solid rise in half-year profit.


For the six months to the end of December, Amcor made $238.3 million after tax.


That is an increase of just over 16 per cent compared to the same period the year before.


Amcor says the result has been helped by strong sales volumes growth in emerging markets.


However, the company says the strong Australian dollar has affected its overseas earnings, cutting $20 million from its profit.


Amcor shares were up 3 per cent to $9.18 by 1:16pm (AEDT) as the market welcomed the profit growth.


Morningstar share analyst Nathan Zaia says the result contained a lot of positives for the company’s future prospects.


“Overall, in the face of subdued economic conditions in Europe and America the result reinforces two things for us,” he wrote in a note on the results.


“Firstly, Amcor has an attractive exposure to resilient food, healthcare and tobacco markets; and secondly, scale and an ever evolving portfolio of innovative products gives it sustainable competitive advantages.”

Topics: business-economics-and-finance, company-news, manufacturing, packaging, australia

First posted February 18, 2013 10:10:48

Shares keep rising on positive profit news


Local shares are making reasonable gains, with mostly positive earnings reports helping to boost the broader share market.


The All Ordinaries Index was up 26 points to 5,080 shortly before midday (AEDT), and the ASX 200 was 0.5 per cent higher at 5,060.


BlueScope Steel jumped 12.5 per cent to $4.24, after significantly narrowing its loss for the half-year.


Bendigo and Adelaide Bank was up almost 4 per cent to $10.24 after its half-year profit surged by more than 200 per cent.


Pacific Brands was up more than 6 per cent to 77.5 cents after reporting a return to profit after several heavy losses and major restructuring and job losses over the past few years.


Amcor shares were also higher as its profits grew, despite the impact of a high Australian dollar – the company’s shares were up around 3 per cent at $9.19.


However, shares in mining services provider Boart Longyear have fallen 7 per cent after its full-year profit slumped more than 57 per cent.


Telstra was down almost 2 per cent, as it is trading without rights to its latest dividend.


Commonwealth Bank shares were also ex-dividend and have fallen 1.3 per cent.


The Australian dollar was worth 102.92 US cents.

Topics: business-economics-and-finance, markets, currency, stockmarket, australia

First posted February 18, 2013 12:10:17

Bridgestone shares get profit boost

A Toyota showroom in the US A recovery in sales of Japanese carmakers has helped boost profits of tyre-maker Bridgestone Shares of Bridgestone, the world’s biggest tyre-maker, have surged after it reported a 67% jump in net profit.


Its shares were up 9% to 2,791 yen in early trade on Tokyo Stock Exchange.


On Monday, Bridgestone reported a net profit of 171.6bn yen ($1.8bn; £1.2bn) in the year to 31 December 2012, compared with 103bn yen a year earlier.


Its profits have been helped in part by the production boost at Japan’s leading carmakers as they continue to recover from the 2011 natural disasters.


At the same time a recovery in demand from the US car market has also helped boost sales of Japanese carmakers, driving up demand for car parts.


Sales of Toyota, Japan’s biggest carmaker, jumped 22% in 2012 to 9.29 million vehicles.


Meanwhile, Nissan Motor said it sold a record 4.94 million vehicles globally in 2012, up almost 6% from the previous year. Honda Motor also saw a jump of 19% from a year earlier, selling 3.82 million vehicles.


Global carmakers such as Volkswagen and BMW have also reported record annual sales for 2012.


At the same time, a sharp decline in the Japanese currency has also helped lift profits. The Japanese currency has dipped nearly 15% against the US dollar since November.


A weak currency boosts profits of exporters when they repatriate their foreign earnings back home.


Bridgestone said its profits were also lifted by “improving manufacturing productivity, enhancing technology and effectively utilising our management resources”.


The firm also forecast a 37% jump in net profit for the current year, further boosting investor morale.

Air Arabia’s 2012 net profit surges 55pc to $115.8mn

airarabiaDUBAI: Sharjah-based budget carrier Air Arabia said Saturday its 2012 net profit soared 55 percent on an annual basis to $115.8 million, as it expanded its network and passenger numbers rose.

Revenues for the Middle East’s first and largest low-cost airline stood at 2.9 billion dirhams ($790 million), an increase of 21 percent compared with 2011, it said in a statement.

Passenger numbers grew 13 percent to 5.3 million in 2012, with a seat load factor of 82 percent for the whole year.

In the fourth quarter, net profit came in at $22.6 million, six percent up from the corresponding period in 2011.

“The year 2012 saw Air Arabia expand its global network by entering new markets, taking more aircraft deliveries,” chairman Sheikh Abdullah bin Mohammad al-Thani said in the statement.

Air Arabia, which began operations from the emirate of Sharjah in 2003, now has two other hubs in Egypt and Morocco. It operates a fleet of 33 narrow-body Airbus A320 that serves 83 destinations, nine of which added in 2012.

Copyright AFP (Agence France-Presse), 2013

Downer shares surge on rising profit


Shares in engineering company Downer EDI have surged after a rise in profit and the awarding of a large NBN contract.


Downer revealed a first-half net profit of $94.4 million, up nearly 11 per cent on the same period a year earlier.


The rise in profit came on the back of a near 17.8 per cent rise in revenue to $4.4 billion, or $4.7 billion including joint ventures.


Downer says its infrastructure revenue rose 25.6 per cent in Australia and 16.7 per cent in New Zealand, while mining revenue was up 17.8 per cent, and rail revenue was 27 per cent higher.


The company says it has work in hand worth almost $19 billion.


Downer says it has also recently been awarded a $94 million contract to roll out the National Broadband Network in northern New South Wales.


The company says it will be taking the NBN’s optic fibre to homes and businesses in the region.


Downer has declared a 70 per cent franked interim dividend of 10 cents a share.


The company’s shares had jumped 8.6 per cent to $5.28 by 1:24pm (AEDT).

Topics: business-economics-and-finance, company-news, australia

Retail drives Wesfarmers profit higher


Strong growth in earnings at Coles, Kmart and Bunnings has pushed Wesfarmers’ profit 9 per cent higher.


Perth-based Wesfarmers has reported a 9.3 per cent increase in its first-half net profit to $1.285 billion, on a 3.2 per cent rise in revenue to $30.6 billion.


The company says its underlying profit, excluding profit items not related to its trading activities, was up 6.8 per cent.


Wesfarmers says strong retail earnings for Coles, Bunnings and Kmart, as well as a turnaround in its insurance division’s performance, drove profit growth, more than offsetting reduced earnings for Target and the company’s resources division.


The company highlighted the performance of its Coles supermarket division, which increased earnings by 15.1 per cent – three times the rate of its revenue growth – to $755 million.


Kmart also posted a large earnings rise of almost 25 per cent to $246 million.


However, Target lagged the conglomerate’s other retail outlets, with earnings down more than 20 per cent, partly due to increased spending on trying to turn around the brand’s performance.


The resources division was also hit hard, with earnings down by almost two-thirds on lower export coal prices and a strong Australian dollar.


Wesfarmers’ chief executive Richard Goyder says he was happy with the overall result, and the coal division’s profit did not reflect a strong operational performance.


“It’s a pleasing result I think, particularly given the challenging conditions we’re experiencing in our resources division at the moment, where we’ve got falling export prices together with a strong Australian dollar,” he said.


“That meant earnings in that division were down significantly on last year, notwithstanding some very significant and good work on reducing operating costs.”


However, insurance earnings were up $87 million to $104 million due to a fall in claims and lower catastrophe costs.


The company’s various chemical, fertiliser and industrial divisions posted mid-to-high single-digit earnings growth.


Mr Goyder says Wesfarmers expects its retail division to keep driving profit growth.


“We expect growth from the group’s retail businesses as we improve customer offers and operating efficiencies and strengthen all of our channels to market,” he noted in the report.


However, Mr Goyder dismissed suggestions that Coles has squeezed suppliers of food and other goods to achieve its profit growth.


“Australian consumers have for too long worn higher and higher prices for food and groceries in this country, above the rate of inflation,” he said.


“What Coles has done has, over a period of time, reduced prices, we’ve forced others to follow us, and I think that’s been a very good thing for consumers.”


The company has declared an interim dividend of 77 cents, up 10 per cent on the same period a year ago.


Investors welcomed the result, pushing Wesfarmers shares 1.7 per cent higher to $39.06 by 2:35pm (AEDT).

Topics: business-economics-and-finance, retail, coal, insurance, company-news, australia, wa

First posted February 14, 2013 12:39:06

Celtic profit from European run

Celtic’s Champions League run helped to increase profits for the second half of 2012.

Interim financial results show the club made a pre-tax profit of £14.94m, up from £0.18m on the previous year.

Turnover increased by 71% to £50.06m and Celtic reduced net bank debt from £7.05m to £0.13m.

“The revenues generated by the team’s success in Europe this year have significantly impacted our half year results,” said chairman Ian Bankier.

Bankier said the positive figures had been posted despite operating in a difficult economic environment.

“Celtic’s achievements, both domestically and in Europe, have had a similarly positive effect on merchandise and ticketing income, notwithstanding the current difficult economic climate,” he added.

“The results on the park and additional matches produced an increase in operating expenses to £36.96m and our profit from trading, before asset transactions and exceptional operating expenses, was £14.94m – a significant uplift on last year’s figure of £0.18m for the same period.

“As in previous years, we continue to make investments in the playing squad and support services.

“The management of the playing squad is an important aspect of our business model. In the period under review we invested £4.65m in strengthening the first team squad, and added to this in the January transfer window.”

The chairman added that the club have “managed to strike a prudent balance between trading successful, valuable assets and retaining key talent to enhance our prospects of football success”.

Sunbeam casts a shadow on GUD profit


Conglomerate GUD holdings has announced a 21 per cent fall in net profit, largely due to a decline in sales for its Sunbeam household appliance business.


The consumer and industrial goods conglomerate GUD reported an after-tax net profit of $18.2 million for the half year ended on December 31.


Excluding one-off restructuring costs, the company says underlying profit fell 9 per cent to $21.7 million.


The firm says it managed a 0.2 per cent rise in revenue compared to the same period a year earlier, due to a strong 20 per cent rise for its industrial division, which offset a 15 per cent fall in revenue from consumer products.


GUD says falling sales for both Oates and Sunbeam contributed to the consumer products decline, which saw pre-tax earnings down by 38 per cent, but it was the small appliance maker that experienced the largest fall.


The company says Sunbeam has been pressured by intense competition from cheaper, lower-quality home brands and European brands looking for sales beyond their home markets which are struggling economically.


In response, Sunbeam was forced to lower its product pricing to remain competitive.


GUD says the demise of Retravision as a major retailer also dented Sunbeam’s sales.


The company says it is reducing costs at the appliance maker, as well as building overseas alliances and revising its product development program in an effort to boost returns.


However, GUD managing director Ian Campbell says he is not expecting a rapid turnaround in Sunbeam’s fortunes.


“The consumer business will remain under pressure in the second half while we introduce our strategic initiatives to strengthen Sunbeam’s financial performance,” he noted in the report.


GUD also reported small falls in pre-tax earnings for its water and automotive businesses.


However, these were offset by a 103 per cent rise in pre-tax earnings for its industrial products business, which is largely focused on Dexion, which manufactures shelving and storage products for the industrial, warehouse and commercial sectors.


GUD says it will pay a special dividend of 10 cents in addition to its interim dividend of 26 cents a share.


The company’s shares fell 1.1 per cent to $8.30 by 12:57pm (AEDT) after the results were released.

Topics: business-economics-and-finance, electronics, manufacturing, company-news, australia

First posted January 22, 2013 13:08:58

News Corporation profit doubles

 Rupert Murdoch’s News Corporation is separating its publishing titles from its entertainment business News Corporation has reported a more-than-doubling in profits, but spent another $56m to cover costs related to the defunct News of the World.


Net income for the three months to December came in at $2.38bn (£1.52bn) thanks to strong growth at its cable networks, which include Fox TV.


Newscorp also owns newspaper titles, including the Wall Street Journal and the Times newspapers in the UK.


It closed the News of the World in 2011 following the UK phone hacking scandal.


The cost to News Corp of its continuing investigations into the News of the World during the three-month period represented just 2.4% of its profits, and was down from $87m a year ago.


News Corp said in June that it was separating its entertainment and publishing businesses, partly as a result of the scandal, in which journalists gained illegal access to the phone messages of many well-known people, and allegedly bribed members of the UK police force.


Shareholders had expressed concern about damage done to the publishing business by the events at the News of the World.


News Corp said it was making progress towards this goal, which is said it hoped to complete by the summer of this year.


Mr Murdoch, who is both chairman and chief executive of Newcorp, said: “The strategies we executed against in the quarter continue to bolster News Corporation’s competitive position and enhance our ability to benefit from global demand for content, especially sports programming.


“As we make progress toward the proposed separation of our entertainment and publishing businesses later this year, I am confident in the future prospects for both businesses.”


The more lucrative TV and film business will remain in the parent company, to be called Fox Group.


It will include the US news channel Fox News and the 20th Century Fox film studio.


Fox television stations benefitted from an increase in political advertising revenues driven by the US presidential elections.


Meanwhile, the company’s movie business was boosted by the theatre release of the Life of Pi, which grossed over $500m.


Newscorp’s profit beat market expectations, as did rivals Disney and Time Warner, who also reported quarterly results over the previous 24 hours.

Huawei profit jumps to $2.4b


Chinese telecommunications giant Huawei has posted a 33 per cent jump in profit in 2012.


The telecoms equipment maker made $2.4 billion in the period thanks to a strong performance in Europe and Japan.


Huawei says 66 per cent of its revenue comes from outside of China.


Security concerns about the company’s links to the Chinese army led the Australian government to ban Huawei from tendering for the NBN contract in mid-2012.


Despite that setback, the Chinese telecom equipment company Huawei says revenues from its Australian operations grew by more than 50 per cent in 2012.


Huawei posted Australian revenue of $229 million in the previous year.

Topics: business-economics-and-finance, telecommunications, manufacturing, china

First posted January 22, 2013 09:37:37

Shares rise on positive profit results

Posted January 24, 2013 08:42:43

Wall Street made modest gains overnight as investors shrugged off worries about the US fiscal cliff and Euro zone debt crisis and instead focused on profit numbers from technology companies IBM and Google.

IBM and Google’s fourth quarter earnings were released after the previous day’s market close, with both beating analyst expectations.

IBM shares climbed 4.8 per cent, while Google rose even further, by 6.2 per cent.

The internet search company made $US2.9 billion in the final three months of last year, which was a 7 per cent increase and beat expectations.

Investors were left waiting for Apple’s results when the final bell rang, amid worries about waning demand for Apple products.

Shares in Apple have fallen about 20 per cent over the past three months and are worth $US510 dollars today.

Analysts are expecting $US55 billion in revenue

Thomson Reuters data shows, of the 99 S&P 500 companies that have reported earnings so far, 68 per cent have topped expectations.

The Dow Jones Industrial Average closed 67 points, or 0.5 per cent, higher at 13,779.

The broader Standard & Poor’s 500 Index ended 2 points, or 0.1 per cent, stronger at 1,495.

The Nasdaq Composite Index finished 0.3 per cent higher on 3,154.

There was also positive news out of Washington as the US House of Representatives voted to suspend the country’s debt ceiling until mid-May.

Many Democrats opposed the measure, labelling it a gimmick that sets up a new fiscal cliff.

In Paris, the International Monetary Fund has warned of a weakening global economic recovery despite government efforts to stimulate growth.

The IMF has cut its global growth outlook to 3.5 per cent for 2013, down from its last prediction of 3.6 per cent made back in October.

European markets ended the session mixed.

London’s FTSE 100 index added 0.3 per cent to 6,198, a fresh four-and-a-half-year high.

Germany’s DAX added 11 points to 7,708, while France’s CAC40 fell 0.4 per cent to 3,726.

At 8:15am (AEDT) the ASX SPI 200 futures contract pointed to a gain of 0.2 per cent when trade begins.

The Australian dollar was edging up against the greenback. It was buying 105.45 US cents, 79.21 euro cents and 66.58 British pence.

West Texas intermediate crude oil slipped back to $US95.47 a barrel, and spot gold prices were also down slightly to $US1,684 an ounce.

Topics: markets, currency, stockmarket, futures, australia

Bilfinger 2012 operating profit up 17pc, meets expectations

FRANKFURT: Germany’s Bilfinger reported a 17 percent rise in full year 2012 operating earnings, in line with market expectations.

 

Earnings before interest, taxes and amortisation in 2012 were 466 million euros ($623.53 million), compared to 460 million euros expected on average by analysts in a Reuters poll.

Copyright Reuters, 2013


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Shares surge as Specialty Fashion trebles profit

Updated January 25, 2013 19:11:30

Clothing retailer Specialty Fashion has surged 40 per cent after saying its first-half profit will treble.

The retailer – which owns women’s fashion stores Katies, Millers, Crossroads, Autograph and City Chic – says its revenue for the half-year ending December 31 was 1.3 per cent up on the previous corresponding period.

The company says it has leveraged this small improvement in sales to a much larger rise in profit, with first-half pre-tax earnings expected to be between $37-38 million, compared to $21.9 million the year before.

Speciality Fashion’s net profit after tax is expected to grow even more, almost trebling from $6.2 million to $17-18 million.

The company’s chief executive Gary Perlstein says the surge in profit was largely driven by a focus on cutting costs.

“Our continued focus on our strategies to improve sales, margins and costs of doing business has meant we have delivered a significant turnaround in trading performance, almost tripling our net profit for the first half of financial year 2013, when compared with the same period in financial year 2012,” he noted in the report.

“The economic uncertainties and structural changes affecting retail have not gone away, but we have pulled all the levers within our control to achieve sustainable improvements, and our results reflect this.”

The retailer says it has recorded the highest gross margin in its history at 62.4 per cent, due to higher selling prices, reduced product cost prices and lower freight costs.

The company says the higher Australian dollar and reduced cotton prices also helped lower its costs and boost profit margin.

Specialty Fashion says it also made rental savings by reducing the base rents of leases renewed during the period and exiting leases of underperforming stores.

The firm says it made $11.3 million, or 3.6 per cent, of its sales online in the period.

The company’s shares were up 41.4 per cent to 99 cents by 10:42am (AEDT) as investors digested the result.

Other fashion retailers such as Premier Investments, David Jones and Myer have also been trading between 0.5-2 per cent higher this morning.

Specialty Fashion will confirm its audited results when it releases its final half-year profit statement on February 18.

Topics: retail, business-economics-and-finance, company-news, australia

First posted January 25, 2013 10:45:01

Credit Suisse net profit drops 24pc in 2012 to $1.5bn

credit-suisse 400ZURICH: Swiss banking giant Credit Suisse said on Thursday its net profit fell 24 percent last year to 1.4 billion Swiss francs (1.2 billion euros, $1.5 billion) despite its investment bank unit rebounding into profit.

The result was below the 1.7 billion francs pencilled in by analysts surveyed by the Swiss financial news agency AWP.

In the final quarter of 2012, however, the bank posted a net profit of 397 million francs, compared to a loss of 637 million francs in the same period the previous year.

The private banking and wealth management division posted an operating profit of 3.7 billion francs for 2012, up from 2.9 billion the previous year.

The investment bank unit, which posted a loss of 593 billion francs in 2011, rebounded in 2012 with an operating profit of 2.0 billion francs.

“2012 was a year of transition,” said chief executive Brady Dougan in a statement.

“We took significant steps to adapt our businesses and our organisation to new regulatory requirements, changing client demands and the current market environment,” he added.

These measures should lead to an improvement in 2013, he said.

“Going into 2013, revenues have so far been consistent with the good starts we have seen to prior years, with profitability further benefitting from the strategic measures we took in 2012, including our strengthened capital position and our significantly reduced risks and cost base,” said Dougan.

The bank’s board recommended keeping the annual dividend unchanged at 0.75 francs per share.

Copyright AFP (Agence France-Presse), 2013

Japan’s NTT April-December profit up 24.5pc

japan flag 400TOKYO: Japan’s biggest telecom firm NTT Corp. said Wednesday that its net profit for the nine months to December jumped 24.5 percent, largely due to upbeat performance at its mobile phone unit.

The former monopoly said it earned 447.3 billion yen ($4.8 billion) for the period, up from 359.2 billion yen a year earlier.

Revenue edged 1.8 percent higher to 7.92 trillion yen, but operating profit slipped 1.6 percent to 993.2 billion yen, said NTT, the parent company of several major Japanese firms including top mobile operator NTT DoCoMo.

NTT, whose business includes fixed-line and mobile phone services, said the contribution from DoCoMo led the parent company’s overall profitability with strong domestic smartphone sales.

Last week DoCoMo, Japan’s biggest mobile carrier, said its net profit rose 5.5 percent to 416.5 billion yen for the nine months, while sales rose 6.2 percent to 3.37 trillion yen.

On Wednesday, the parent company left its full-year forecast unchanged, projecting net profit at 530 billion yen and an operating profit at 1.2 trillion yen on sales of 10.81 trillion yen for the fiscal year to March.

Copyright AFP (Agence France-Presse), 2013

SIA says third-quarter net profit up 6.0 percent

singapore-airlinesSINGAPORE: Singapore Airlines (SIA) said Thursday its third-quarter net profit rose six percent year-on-year as the sale of aircraft and spare engines as well as interest income offset the impact of a business slowdown.

Net profit for the last three months of 2012 totalled Sg$143 million ($115.6 million), SIA said, attributing the rise to gains from the “sale of aircraft, spares and spare engines, and higher net interest income”.

Revenue however eased 0.40 percent to Sg$3.86 billion, and the carrier warned of tough times ahead for the passenger and cargo markets.

“The outlook for international air travel demand continues to be challenging and the cargo market remains depressed amid the troubled European economy and the weak recovery in the United States,” the airline said.

“Loads and yields of both passenger and cargo businesses are expected to remain under pressure, while the price of jet fuel continues to be at a historical high,” it added.

“The depreciation of revenue-generating currencies against the Singapore dollar poses yet another challenge.”

Fuel expenses totalled Sg$1.5 billion during the quarter, accounting for more than 38 percent of revenues.

SIA said its non-operating gains were dented by Sg$20 million in fines for its subsidiary SIA Cargo in relation to civil penalty proceedings “in respect of competition law matters in Australia and New Zealand”.

The cargo arm of SIA was slapped with the fines last year after it admitted to colluding with various other airlines including Hong Kong’s Cathay Pacific to fix prices for air cargo.

SIA — widely regarded as a bellwether for full-service airlines — has implemented a series of cost-cutting measures amid a global industry slowdown.

In the latest measure, the airline asked 76 foreign pilots to leave by June 30 before the expiry of their employment contracts.

It had earlier called for captains and first officers to volunteer for unpaid leave and has also frozen its intake of cadet pilots.

Copyright AFP (Agence France-Presse), 2013

Hyundai Heavy reports 62pc fall in 2012 profit

hyndaeiSEOUL: South Korea’s Hyundai Heavy Industries on Thursday said net profit tumbled 62 percent in 2012 following a sharp fall in orders for high-end ships, while its fourth quarter net loss saw a severe widening.

The world’s largest shipbuilder said consolidated net profit stood at 1.038 trillion won ($954 million), while sales rose 2.4 percent year-on-year to 54.97 trillion won.

Operating profit plunged 56 percent to 1.99 trillion won, it said.

In the fourth quarter to the end of December its net loss expanded to 348 billion won from 25.4 billion won a year earlier.

Fourth-quarter sales fell 2.7 percent year-on-year to 14.1 trillion won, while operating profit plunged 94 percent to 54.3 billion won.

It blamed the weak fourth-quarter figures on deliveries of cheaper ships for orders contracted at the start of the global economic crisis. Shipbuilders take years to make deliveries and their financial accounts during a period of delivery are based on the prices at which they obtained the orders.

However, as the outlook for the global economy picks up the company said it had set a target $29.7 billion in total orders for 2013, up from $19.57 billion last year.

Copyright AFP (Agence France-Presse), 2013

Japan’s Mazda swings back to profit

mazda 400TOKYO: Japanese car giant Mazda on Wednesday said it swung back to a profit in the nine months to December as it boosted its full-year earnings forecast.

Japan’s fifth-biggest automaker logged a net profit of 25.6 billion yen ($273 million) for the April-December period, reversing its net loss of 112.8 billion yen a year earlier. Sales rose 8.5 percent to 1.54 trillion yen, it said.

It credited the results to a bounce in sales and cost-cutting after suffering a double punch from a strong yen and falling demand in key markets during the corresponding period in 2011, when manufacturers were also hit by effects of Japan’s quake-tsunami disaster.

In China, Mazda sold 129,000 vehicles for the nine-month period, down 21.5 percent from a year earlier, “but sales are on a recovery trend,” it said, echoing similar comments from Toyota, Japan’s biggest automaker.

On Tuesday, Toyota said the China market was improving as it net profit in the nine months to December quadrupled while it also lifted its full-year earnings outlook.

Demand for Japanese cars in China, the world’s biggest vehicle market, plunged last year in the wake of a consumer boycott sparked by a territorial spat between Tokyo and Beijing over an East China Sea island chain.

Mazda also said it was projecting a full-year net profit of 26 billion yen, up from an earlier estimate of 10 billion yen, while sales are forecast to be 2.19 trillion yen, compared with an earlier 2.17 trillion yen prediction.

Japan’s automakers have been posting strong results, underscoring their recovery from the twin disasters and the surging value of the yen, which has been in steep decline in recent months.

Copyright AFP (Agence France-Presse), 2013

Newcrest shares up despite profit fall


Gold miner Newcrest has reported a fall of more than 50 per cent to its net profit in the six months to December.


The company has reported a statutory profit of $320 million, down from $659 million in the same period the year before, with production down as two major projects came online.


Newcrest chief executive Greg Robinson says a fall in ore grades was the main problem.


“It really [shows] the effect of the changing gold grades and recoveries on production in this current half period because, with the exception of Lihir, pretty much mill throughput at all of our operations was basically unchanged or higher,” he said.


However, the result still comfortably beat analyst predictions of a $292 million profit.


Despite the fall in profit, investors will again get an interim dividend of 12 cents a share, unfranked.


That has pushed Newcrest shares 4.5 per cent higher to $24.41.

Topics: business-economics-and-finance, gold, australia

Macquarie shares fall as profit rise disappoints


Shares in Australia’s biggest investment bank have retreated after it said it expects full year profits to rise “materially” as market conditions show some signs of improvement.


Macquarie Group expects profits to rise by around 10 per cent for its current financial year, which ends on March 31.


However, that was less than analysts were expecting.


Macquarie says a rise in tax rates and weakness in its trading and investment businesses will limit earnings.


Around 10:35am (AEDT), Macquarie Group shares were down 3.9 per cent to $37.22.

Topics: business-economics-and-finance, banking, company-news, australia

Cochlear shares fall despite return to profit


Hearing implant maker Cochlear has swung to profit in the first half of the financial year, on record sales of its hearing devices.


Cochlear says first-half net profits soared to $77.7 million, up from a loss of more than $20 million the same time last financial year.


Implant sales jumped 27 per cent compared with the same time the year before, to nearly 14,000 units.


Investors will get an increased interim dividend of $1.25 a share, partly franked.


Cochlear says it has recovered from a costly recall of one of its key products.


Cochlear’s chief executive, Chris Roberts, says the company is planning to reintroduce the recalled unit but is in no hurry.


“There are some advantages of bringing back the 500 series relating to some of the implant, the surgeon technique and the like, but I’m not sure how much of a catalyst it really will be to drive sales,” he told investors.


“You’d expect it to be positive, but it’s pretty hard for us to quantify that.”


However, investors were not impressed and Cochlear shares were down 6.3 per cent to $75.40 by 1:07pm (AEDT).

Topics: business-economics-and-finance, company-news, manufacturing, australia

First posted February 05, 2013 13:09:21

News Corp doubles profit on cable revenue


Rupert Murdoch’s News Corporation has more than doubled its quarterly profits, on a jump in revenue at its cable television businesses.


News Corp says profits surged to $US2.4 billion in the three months to the end of December last year.


The results included $US56 million in costs relating to the closure of its News of the World newspaper in the United Kingdom after a phone hacking scandal.


News Corp reconfirmed that it will split its entertainment and publishing businesses later this year.

Topics: business-economics-and-finance, company-news, media, united-states, australia

Transurban profit falls but dividend rises

By finance reporters Justine Parker and Simon FrazerPosted February 05, 2013 12:40:59

Toll road operator Transurban has announced a decline in half-year profits, but its shares have risen on an increased dividend.

Transurban recorded a first-half net profit of $80.9 million, down more than 13 per cent on the same time the year before.

The chief executive of Transurban says there has been disappointing traffic flows on its new US toll road and the 495 Express, linking Virginia to Washington DC, will take time to capture motorists.

“From an operational point of view it’s performing well. The safety issues we’re quite happy with how it’s performed there,” he said.

“We are disappointed with some of the early traffic numbers. It is in that situation because it’s been under construction for five years, and it’s the biggest adjustment to that traffic network since the 1960s.”

Earnings before tax, interest and depreciation rose though, to $417 million.

However, shareholders will get an increased dividend of 15.5 cents per share for the period.

The rise in the dividend had helped Transurban’s shares rise around 1.5 per cent to $6.19 by 12:23pm (AEDT).

The company operates toll roads including the M2 and the Lane Cove tunnel in Sydney, and Melbourne’s Citylink.

Topics: business-economics-and-finance, company-news, road-transport, australia

Telstra reports increased revenue, profit and customers


Telstra’s profit has met expectations, but it warns of “significant costs” related to mobile spectrum renewal this year.


The telecommunications giant says its first-half net profit after tax rose 8.8 per cent to $1.6 billion, based on a 1.7 per cent increase in total income to $12.7 billion.


That met analyst expectations, with those surveyed by Bloomberg generally expecting a $1.6 billion net profit result.


Telstra says it added 607,000 new domestic mobile services in the six months to December 31, bringing the number of mobile services it provides to 14.4 million.


That resulted in a 4.6 per cent rise in mobile revenue to $4.56 billion.


However, Telstra says it also spent a considerable amount of money maintaining and improving its mobile technology, with $1.9 billion spent on capital works across its business.


“Our investment in the mobile network is attracting more customers,” noted the company’s chief executive, David Thodey, in a statement.


“We have now sold 1.5 million 4G devices, and we are on track to expand 4G coverage to 66 per cent of the Australian population by June 2013.”


It has also flagged the costs of renewing licences for mobile spectrum with the Federal Government this year.


“The company will incur significant costs in fiscal year 2013 for the renewal of existing spectrum licences,” the company noted in its directors’ report.


“There are also auctions for new spectrum licences planned for the second half of fiscal 2013.”


However, Telstra has also received payments from the Federal Government for its role in the National Broadband Network totalling $176 million for the half.


The company also made $381 million in cost savings during the half, with some of its call centres closing as more customers use online self-service.


Excluding spectrum cost and any unexpected items, Telstra is expecting to have low single-digit growth in revenue and pre-tax earnings for the rest of the financial year, and has committed to maintaining its full-franked dividend of 14 cents per half this financial year.

Topics: telecommunications, business-economics-and-finance, stockmarket, company-news, australia

First posted February 07, 2013 09:14:31

Panasonic shares surge on profit

 Panasonic TVs on display Japanese electronics makers have been struggling amid a slowing global demand for TVs Shares of Panasonic have surged 17% to 692 yen in Tokyo, after the firm swung back into profit in the third quarter.


On Friday, Panasonic reported a net profit of 61.3bn yen ($666m; £421m) for the October-December period, compared with a 197.6bn yen loss a year earlier.


Panasonic, which kept its forecast for a full-year loss unchanged, said a weak yen had improved business conditions.


Analysts said investors were hoping that a weak currency will help boost profits further in the current quarter.


“For the time being they are being rescued by the weak yen and it looks like they may have a good fourth quarter as well,” Yuuki Sakurai of Fukoku Capital Management told the BBC.


The Japanese currency has dipped more than 15% against the US dollar since November last year.


A weak yen boosts profits of Japanese exporters such as Panasonic when they repatriate their foreign earnings back home. It also makes Japanese goods more affordable to foreign buyers.


“The hope is that if the yen continues to to remain weak then the losses could be less than what Panasonic had previously forecast,” Mr Sakurai added.


The firm has said it expects to make a net loss of 765bn yen for the financial year to 31 March 2013.

Long term concerns Continue reading the main story
If the basis of a profit surge is just the weak currency, then than that is always going to be risky”

End Quote Yuuki Sakurai Fukoku Capital Management Panasonic has seen its fortunes slide in recent years amid a slowdown in global demand and falling prices for TVs.


To make matters worse, it has also had to face strong competition from rivals, including South Korea’s Samsung which has grabbed a big share of the global TV market.


In its latest results, Panasonic said that global demand for flat-panel TVs and digital devices had weakened further.


It said its overall sales in the last quarter fell 8% on the year to 1.8 trillion yen.


Analysts said that the firm had been too reliant on its TV business over the past years, and that it needed to rethink its strategy.


“People are still sceptical if the business model of Panasonic will be successful in the long run,” said Fukoku Capital Management’s Mr Sakurai.


For its part, Panasonic has been trying to restructure its business. But it has previously warned that the costs related to such moves may be almost 11 times more than previously estimated.


Mr Sakurai added that while the drop in the yen’s value was a welcome relief for Panasonic, until it addresses the long term issues, the firm’s future remained uncertain.


“If the basis of a profit surge is just the weak currency, then than that is always going to be risky,” he said.


“For all you know, the yen could start to rise again and things may be back to square one for Panasonic.”

Etihad Airways trebles profit last year


Etihad Airways has trebled its profits, making $40 million in 2012 while many airlines recorded losses.


The national carrier of the United Arab Emirates says a 17 per cent rise in revenue to $US4.8 billion ($4.6 billion) saw its profits rise 200 per cent to $US42 million ($40 million) last year.


The airline says its bottom line received a strong boost from its partnerships and codeshares, which contributed more than $US600 million in revenue.


Etihad holds a 9 per cent shareholding in Virgin Australia, along with 40 per cent ownership of Air Seychelles, around 29 per cent of airberlin and 3 per cent of Aer Lingus.


The airline’s chief executive, James Hogan, says taking out equity stakes in some of its partner airlines has been a profitable move.


“We have delivered improved net profit, the second consecutive year we have been in the black, a remarkable achievement given the youth, ambitious growth and ongoing investment made by this airline in a challenging global economic environment,” he noted in the profit report.


“We have taken great strides in building the industry’s first equity alliance, with our investments in airberlin, Air Seychelles, Virgin Australia and Aer Lingus, which are contributing significant value to our business.”


UAE’s flag carrier says it cracked the 10 million passenger mark for the first time last year, with its fleet of 70 aircraft carrying 10.3 million travellers.


It is planning further expansion, with more than $US6.8 billion in total loans to fund its growth, including 14 new aircraft this year.


The company also says its profit result was also boosted by a 5 per cent reduction in non-fuel costs relative to its capacity.

Topics: business-economics-and-finance, company-news, air-transport, united-arab-emirates

First posted February 04, 2013 16:45:00

BT profit up as revenue declines

Joggers pass BT tower BT said that it added a further 281,000 broadband customers during the last three months The decline in revenues at BT continued in the last three months of 2012, but its profits held up, the telecom firm has reported.


Total revenues fell 6% in the quarter from a year ago, to £4.5bn, with the decline hitting every division.


BT warned in November that its business would be hurt by European companies cutting their IT budgets.


Nonetheless, cost-cutting helped its profits grow 7% to £675m. Meanwhile its broadband customer base grew rapidly.


The company added a further 250,000 homes and businesses to its fibre-optic broadband network, according to chief executive Ian Livingston, bringing the total number of customers to 1.25 million. The expanding network is available to 13 million premises in all.


He said that BT Global Services – the division offering telecoms and IT services to corporations and governments overseas – had increased its new order book by 17% to £1.9bn.

Continue reading the main story “We have made progress in a number of areas and delivered solid financial results,” said Mr Livingston.


With the decline in business volumes already well anticipated, markets focused on the good news in BT’s statement.


The company’s share price jumped 4.5% in Friday morning trading, making it the biggest riser in the FTSE 100 index of top UK stocks.

Pension fund hole

Each of the company’s divisions was losing business for different reasons.


Loss of European orders showed up as an 8% fall in revenues at BT Global Services.


Meanwhile, BT’s retail unit was hurt by households using their phones less, as people continue to migrate to mobile and the internet for communications, while its wholesale business was hit by “local loop unbundling” – customers asking rival firms to provide internet services over BT’s cables.


Its infrastructure arm, Openreach, suffered a 2% loss of revenues as it was forced by regulators to cut its prices.


There was also bad news from BT’s pension fund, whose estimated shortfall grew again, reaching £4.3bn at the end of last year, as falling long-term interest rates meant that the pension scheme had to increase its valuation of future payments to retiring employees.


BT has been seeking to fix the hole in its pension fund, which ballooned to £9bn in 2008.


In 2010 it switched the inflation indexing of its pensions from the retail prices index to the consumer prices index, which typically produces a much lower inflation rate because of the way it is calculated, cutting £2.9bn from its deficit and allowing the firm to announce a substantial increase in its dividend.


Last March, BT upped its contributions to the scheme, beginning with a one-off £2bn lump payment, which helped cut the shortfall to £1.9bn. However, since then the hole has steadily grown again.

Facebook shares slide on profit fall


Facebook has reported a sharp drop in profits, prompting a fresh decline in the share price of the world’s biggest social network.


The company says the drop in profit is partly due to increased spending on research and development.


The social network site made a profit of over $60 million in the final three months of 2012, compared with nearly $300 million a year earlier.


The results triggered a 5 per cent slide in Facebook shares in after-hours trading in New York.

Topics: business-economics-and-finance, company-news, media, social-media, united-states

Whitehaven shares fall on profit warning


Shares in Whitehaven Coal have tumbled after the company warned that its full-year earnings could shrink to less than $20 million.


Whitehaven expects earnings before interest and tax to come in at less than $10 million for the first half of the year, and possibly for the second half.


That is less than half the previous guidance for full year earnings of around $50 million.


The company blames the strong Australian dollar and weak coal prices for the earnings downgrade, and says a derailment at its Narrabri mine in New South Wales also hit operations.


Whitehaven shares were down 5.2 per cent at $3.29 by 3:23pm (AEDT).

Topics: business-economics-and-finance, company-news, coal, australia

First posted January 31, 2013 15:29:57

Ryanair raises profit forecast

 Ryanair’s deputy chief executive, Michael Cawley: “Ryanair profits will grow”

Ryanair has increased its profit forecast for the full year after a better-than-expected performance in the last three months of 2012.


The low-frills airline reported an 18.1m-euro ($24.3m; £15.4m) profit after tax in the three months to December, the third quarter of its financial year, up 21% on a year ago.


It was boosted by strong pre-Christmas bookings and lower operating costs.


It now expects annual profits of close to 540m euros.


Its previous guidance was for profits of 490-520m euros.


Last week, rival Easyjet said its losses for the first half of the year would be much lower than in 2011, as it reported a 9% rise in revenues.

Aer Lingus proposal

In the third quarter, Ryanair benefited from an 8% rise in average fares, lifting overall revenues 15% to 969m euros.


The company said fares would continue to rise next year, though capacity would only rise by 2-3%, down from the 4% rise forecast in the current year, due to the lack of new plane deliveries planned.


The airline also gave an update on its bid for rival airline Aer Lingus. Ryanair is making its third attempt to buy Aer Lingus but was given a list of objections by the European Commission in October last year.


“Ryanair has submitted a radical and unprecedented remedies package to the EU in support of its offer for Aer Lingus. We believe these remedies address every current Ryanair/Aer Lingus crossover route and all other competition issues raised by the Commission in its Statement of Objections,” Ryanair said.


“The remedies involve two upfront buyers each basing aircraft in Ireland to take over and operate a substantial part of Aer Lingus’ existing route network and short-haul business.


“This will be the first EU airline merger which will deliver structural divestitures and multiple upfront buyers. We look forward to completing our offer for Aer Lingus subject to receiving approval from the EU competition authorities in early March.”

Kia Motors sees 6.7pc fall in Q4 net profit

kia 400SEOUL: South Korea’s Kia Motors on Friday reported a 6.7 percent fall in its fourth-quarter net profit, blaming a stronger won and compensation payouts to US customers for inflated gas-mileage claims.

Consolidated net profit for the three months ended December 31 fell to 737.5 billion won ($689 million) from 790.4 billion won a year earlier, the country’s second largest automaker said in a statement.

A stronger won took its toll on the bottom line, and the company had to pay a one-off compensation claim worth 200 billion won to US customers following lawsuits over inflated mileage claims.

The US Environmental Protection Agency found that both Kia and Hyundai Motor — which owns a 34 stake in Kia — had exaggerated the fuel efficiency numbers on 2012 and 2013 models of cars sold in the US market.

Labour strikes at Kia in the third quarter depressed inventories in the October-December period, the company said.

Operating profit slumped 51 percent to 404.2 billion won from 826.9 billion won a year earlier, while sales rose 2.8 percent to 11.3 trillion won from 11.0 trillion won.

Copyright AFP (Agence France-Presse), 2013

POSCO Q4 profit misses forecast on weak China demand, lower prices

posco 400SEOUL: POSCO, the world’s No.5 steelmaker by output, reported a 45 percent fall in quarterly operating profit, missing a consensus forecast, as tepid demand and falling prices offset lower raw material costs helped by a firmer local currency.


The South Korean company on Tuesday said its October-December operating profit was 379 billion won ($346.7 million) on a parent basis that does not reflect earnings of affiliates, below an average forecast of 490 billion won in a Reuters’ poll of 25 analysts. This compared with an operating profit of 692 billion won a year earlier.


Fourth-quarter sales fell 20 percent to 8.07 trillion won, compared with a consensus forecast of 8.35 trillion won.


Steelmakers are struggling with a combination of a chronic oversupply and a tepid demand recovery in China, the world’s top consumer of the alloy used in the construction, shipbuilding, automobile and home appliance sectors.


China’s economy grew at its slowest pace in 13 years in 2012 and the recovery should be only modest this year due to the European debt crisis and a slow US recovery.


The South Korean won appreciated nearly 8 percent versus the dollar last year, helping reduce import costs of steelmaking ingredients iron ore and coking coal.


Prior to the earnings announcement, shares in POSCO, backed by billionaire investor Warren Buffett, ended down 0.1 percent in a wider market that rose 0.8 percent.


Shares in POSCO, which trails ArcelorMittal and China’s Baosteel in steel production, have been rebounding since late November on hopes China’s economy will rebound.

Copyright Reuters, 2013

Samsung posts record Q4 net profit

samsung1 400SEOUL: South Korea’s Samsung Electronics said Friday net profit soared 75.6 percent to a record 7.04 trillion won ($6.6 billion) in the fourth quarter of 2012, driven by strong smartphone and memory chip sales.

The world’s largest technology firm by revenue and top smartphone maker also saw a record operating profit in October-December of 8.84 trillion won, up 89.7 percent from a year earlier.

The figures were largely in line with Samsung’s guidance released earlier this month.

For all of 2012, Samsung logged a net profit of 23.8 trillion won, with revenue and operating income reaching 201.1 trillion won and 29.05 trillion won respectively.

The company said growth in the fourth quarter was mainly driven by “solid sales” of its flagship Galaxy S3 and Galaxy Note 2 smartphones.

IT and Mobile Communications accounted for the lion’s share of operating profit in the fourth quarter, racking up 5.44 trillion won on revenue of 31.32 trillion won.

However, Samsung cautioned that the “furious growth spurt” in the global smartphone market in 2012 would be “pacified” this year by intensifying price competition compounded by a slew of new products.

“In the first quarter, demand for smartphones in developed countries is expected to decelerate,” it said in a statement.

Samsung’s growth momentum still remains faster than smartphone rival Apple’s, and analysts expect it to stay that way for much of the year due to a larger mix of products.

While shares in Samsung have climbed 12 percent over the past three months, Apple has slumped 20 percent.

The California-based company announced record quarterly profits on Wednesday, but investors soured on forecasts of levelling growth and reduced profit margins.

While Samsung does not provide figures for quarterly smartphone shipments, analysts estimate the company sold 63 million smartphones on total handset sales of 110.5 million units.

The company’s chip, display panel and consumer electronics divisions also saw an improvement in their quarterly results.

Memory chip business contributed $1.3 billion in operating profits, a 39 percent quarterly increase. However, Samsung warned demand in the first quarter of 2013 would be tempered by a seasonal drop in PC and mobile device sales.

Although demand was weak for PC DRAM during the fourth quarter, the semiconductor unit posted $8.97 billion in sales, a 10 percent increase quarter over quarter.

October-December saw strong sales of LED TVs, but the global downturn resulted in slipping demand for home appliances in general, despite a rise in sales of high-end refrigerators and washers in the United States and Europe.

“Despite uncertainties in Europe and concerns over the US fiscal cliff… we did our best this quarter to achieve strong earnings based on… high value-added products as well as our technological competitiveness,” Investor Relations chief Robert Yi said in a statement.

“Heading into this year, we are expecting a slow recovery in the component business due to reduced capital expenditures, while competition in the set  business will intensify further as demand slows,” Yi said.

Copyright AFP (Agence France-Presse), 2013

DP World sees 2012 profit in-line with forecasts

dp world 400DUBAI: Dubai port operator DP World , the world’s third largest port operator, on Tuesday said it expected 2012 profits to be in line with analysts’ forecasts despite a 1.4 percent drop in consolidated container volumes for the year.


DP World said terminals in which it owns majority stakes handled 27.1 million TEU (twenty-foot equivalent container units) for 2012, compared with 27.5 million TEU in 2011, it said in a statement on Tuesday.


The port operator, one of the more profitable assets of conglomerate Dubai World, posted a 2.4 percent rise in gross volumes to 56.1 million TEU from 54.7 million TEU in the prior year. The gross volumes include all terminals in which DP World owns a stake.


The company, which recently disposed stakes in some of its non-core assets, described the second half of 2012 as “challenging”. However, the firm said it expected profits for the year to be in line with analyst expectations.


Analysts on average forecast earnings before interest, tax, depreciation and amortisation (EBIDTA) of $1.3 billion and net profit of $486 million for 2012, according to Reuters data.


“After a strong start to the year we had a challenging second half,” DP World’s Group Chief Executive Mohammed Sharaf said in the statement.


“Our tight focus on cost management and higher quality revenue mean we still expect to achieve EBITDA in line with expectations for 2012. Lower net financing charges will benefit reported profit before tax.”  DP World, which operates more than 60 terminals across six continents, has in the last several months sold stakes in Russian container terminal Vostochnaya Stevedoring Co, British-based Tilbury Container Services and operations in Belgium.


It has also quit its venture in Yemen.


The port operator reported a slight decline in its consolidated terminal volumes for the third quarter. It also posted flat profits for the first half of 2012 as growth in its Gulf operations offset tough global trading conditions.


Shares of DP World climbed 20.7 percent in 2012 on Nasdaq Dubai and have risen 11.1 percent year-to-date. The company is also listed on the London Stock Exchange.

Copyright Reuters, 2013

Shares surge as Specialty Fashion trebles profit


Clothing retailer Specialty Fashion has surged 40 per cent after saying its first-half profit will treble.


The retailer – which owns women’s fashion stores Katies, Millers, Crossroads, Autograph and City Chic – says its revenue for the half-year ending December 31 was 1.3 per cent up on the previous corresponding period.


The company says it has leveraged this small improvement in sales to a much larger rise in profit, with first-half pre-tax earnings expected to be between $37-38 million, compared to $21.9 million the year before.


Speciality Fashion’s net profit after tax is expected to grow even more, almost trebling from $6.2 million to $17-18 million.


The company’s chief executive Gary Perlstein says the surge in profit was largely driven by a focus on cutting costs.


“Our continued focus on our strategies to improve sales, margins and costs of doing business has meant we have delivered a significant turnaround in trading performance, almost tripling our net profit for the first half of financial year 2013, when compared with the same period in financial year 2012,” he noted in the report.


“The economic uncertainties and structural changes affecting retail have not gone away, but we have pulled all the levers within our control to achieve sustainable improvements, and our results reflect this.”


The retailer says it has recorded the highest gross margin in its history at 62.4 per cent, due to higher selling prices, reduced product cost prices and lower freight costs.


The company says the higher Australian dollar and reduced cotton prices also helped lower its costs and boost profit margin.


Specialty Fashion says it also made rental savings by reducing the base rents of leases renewed during the period and exiting leases of underperforming stores.


The firm says it made $11.3 million, or 3.6 per cent, of its sales online in the period.


The company’s shares were up 41.4 per cent to 99 cents by 10:42am (AEDT) as investors digested the result.


Other fashion retailers such as Premier Investments, David Jones and Myer have also been trading between 0.5-2 per cent higher this morning.


Specialty Fashion will confirm its audited results when it releases its final half-year profit statement on February 18.

Topics: retail, business-economics-and-finance, company-news, australia

First posted January 25, 2013 10:45:01

Nokia swings back into profit

Nokia Lumia Nokia sold 4.4 million of its new Lumia smartphones during the three months Nokia, the struggling mobile phone maker, swung back into profit in the last three months of 2012.


But Nokia said the trading outlook was tough and that no dividend would be paid, the first time in 20 years that shareholders have missed out.


Pre-tax profit for the quarter was 375m euros (£316m), against a 974m-euro loss last year.


Nokia said it sold 15.9 million smartphones in the quarter, down from 19.6 million a year earlier.


Paying no dividend would help the company preserve cash, and ensure “strategic flexibility”, Nokia said in a statement. The rate at which Nokia was burning through cash as it invested in new products had been a worry for investors.


The company finished 2012 with net cash of 4.4bn euros, down 22% from a year earlier.


Nokia has fallen behind in the smartphone race against rivals Samsung and Apple.


However, the Finnish company has recently flagged that its turnaround strategy was starting to work and that sales of its new Lumia phones were strong, contributing to a 70% rise in Nokia’s share price in past months.


The company sold 86.3 million devices during the quarter, including 4.4 million Lumia smartphones, its new flagship product developed with Microsoft – figures which it had flagged earlier this month.


“We are very encouraged that our team’s execution against our business strategy has started to translate into financial results,” chief executive Stephen Elop said. That strategy has involved announcing almost 20,000 job losses.


Nokia’s market share reached more than 50% before rivals began eating into its business.


Ben Wood, a research analyst at CCS Insight said that on the face of it, this was positive for Nokia in isolation.


“But you have to take the 4.4m Lumia smartphones that they sold in the context of the 48m that Apple announced last night, and you can see that they have a long journey ahead.”


On Wednesday, Apple said it had sold 47.8 million iPhones during the final quarter of 2012.

Nokia posts net profit in fourth quarter

nokia-building HELSINKI: Nokia, once the world’s largest mobile phone maker, on Thursday posted a net profit of 202 million euros in the fourth quarter, its first quarterly profit in 18 months.


 


The beleaguered company, which is trying to cut costs, said that for the first time in more than 20 years it wouldn’t be paying a dividend to shareholders.


 


Copyright AFP (Agence France-Presse), 2013

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Hyundai profit hit by strong won

Hyundai cars on display Hyundai’s rising sales in key export markets have been offset by a strong South Korean currency Hyundai Motors has reported a dip in profits, despite a jump in sales, as a strong South Korean won hit its overseas earnings.


The carmaker made a net profit of 1.9 trillion won ($1.8bn; £1.1bn) in the October to December quarter.


That is down from the 2tn won it made during the same period a year earlier.


The won has risen almost 5% against the US dollar since October last year. That hurts firms when they repatriate their foreign earnings back home.


A strong won also makes South Korean goods more expensive to foreign buyers.

‘Challenging year’ Continue reading the main story
Hyundai’s ability to overcome worsening external factors will be put to the test this year”

End Quote Lim Hyung-geun GS Asset Management South Korean firms such as Hyundai compete directly with Japanese firms in key export markets.


While the South Korean companies have had to battle with a rising currency, Japanese firms, which for a long time had a similar problem, are likely to benefit from the recent weakening of the yen.


The Japanese currency has dropped nearly 15% against the US dollar since October last year.


That not only makes Japanese goods more affordable to foreign buyers, but also boosts the earnings of Japanese firms that rely on foreign sales.


Analysts said the opposite trends in the South Korean and Japanese currencies were likely to continue in the coming months, and pose a big challenge to Hyundai.


“With the yen seen weakening further, while the won is set to keep rising, Hyundai’s ability to overcome worsening external factors will be put to the test this year,” said Lim Hyung-geun, a fund manager at GS Asset Management.


He added that Hyundai does not plan to launch any major models this year, which would make 2013 a “very challenging year” for the firm.


Hyundai is also facing compensation claims after it admitted that it had overstated the fuel efficiency of some of its vehicles.


Hyundai has said it will compensate the affected buyers.


The compensation, which will cover nearly 900,000 vehicles, could cost the firm millions of dollars.

Jaguar sees lower profit margins

Leaping Jaguar sign Jaguar Land Rover said its sales were higher in the most recent quarter than in previous periods Jaguar Land Rover has said its profit margins will be “slightly lower” than in recent quarters, sending shares in its Indian owner lower.


The luxury carmaker blamed a number of factors, including less favourable exchange rates, but said that revenues would still be higher.


Shares in Tata Motors fell more than 6% in Mumbai.


Tata Motors, part of India’s huge Tata conglomerate, makes most of its money from Jaguar Land Rover.


Jaguar Land Rover announced that, for the three months to 31 December, its retail sales were 88,658 and its wholesale sales were 94,828, both up from the previous two quarters.


The Chinese market – where sales of Jaguar Land Rover’s vehicles have risen 80% in the past year – has been rising in importance to the company.


The carmaker plans to increase its dealership network in China by a further 30% in the coming year.


“We plan to continue to increase and accelerate capital spending to develop new products in new and existing segments… grow our manufacturing footprint in China and explore manufacturing opportunities in other markets,” it said.


Jaguar Land Rover said that its capital spending could increase to be in the region of £2.75bn in 2014.


The West Midlands-based luxury carmaker agreed a “milestone” deal with Chery Automobile and will build a plant near Shanghai, which is due to open in 2015.

Shares rise on positive profit results


Wall Street made modest gains overnight as investors shrugged off worries about the US fiscal cliff and Euro zone debt crisis and instead focused on profit numbers from technology companies IBM and Google.


IBM and Google’s fourth quarter earnings were released after the previous day’s market close, with both beating analyst expectations.


IBM shares climbed 4.8 per cent, while Google rose even further, by 6.2 per cent.


The internet search company made $US2.9 billion in the final three months of last year, which was a 7 per cent increase and beat expectations.


Investors were left waiting for Apple’s results when the final bell rang, amid worries about waning demand for Apple products.


Shares in Apple have fallen about 20 per cent over the past three months and are worth $US510 dollars today.


Analysts are expecting $US55 billion in revenue


Thomson Reuters data shows, of the 99 S&P 500 companies that have reported earnings so far, 68 per cent have topped expectations.


The Dow Jones Industrial Average closed 67 points, or 0.5 per cent, higher at 13,779.


The broader Standard & Poor’s 500 Index ended 2 points, or 0.1 per cent, stronger at 1,495.


The Nasdaq Composite Index finished 0.3 per cent higher on 3,154.


There was also positive news out of Washington as the US House of Representatives voted to suspend the country’s debt ceiling until mid-May.


Many Democrats opposed the measure, labelling it a gimmick that sets up a new fiscal cliff.


In Paris, the International Monetary Fund has warned of a weakening global economic recovery despite government efforts to stimulate growth.


The IMF has cut its global growth outlook to 3.5 per cent for 2013, down from its last prediction of 3.6 per cent made back in October.


European markets ended the session mixed.


London’s FTSE 100 index added 0.3 per cent to 6,198, a fresh four-and-a-half-year high.


Germany’s DAX added 11 points to 7,708, while France’s CAC40 fell 0.4 per cent to 3,726.


At 8:15am (AEDT) the ASX SPI 200 futures contract pointed to a gain of 0.2 per cent when trade begins.


The Australian dollar was edging up against the greenback. It was buying 105.45 US cents, 79.21 euro cents and 66.58 British pence.


West Texas intermediate crude oil slipped back to $US95.47 a barrel, and spot gold prices were also down slightly to $US1,684 an ounce.

Topics: markets, currency, stockmarket, futures, australia

Sunbeam casts a shadow on GUD profit


Conglomerate GUD holdings has announced a 21 per cent fall in net profit, largely due to a decline in sales for its Sunbeam household appliance business.


The consumer and industrial goods conglomerate GUD reported an after-tax net profit of $18.2 million for the half year ended on December 31.


Excluding one-off restructuring costs, the company says underlying profit fell 9 per cent to $21.7 million.


The firm says it managed a 0.2 per cent rise in revenue compared to the same period a year earlier, due to a strong 20 per cent rise for its industrial division, which offset a 15 per cent fall in revenue from consumer products.


GUD says falling sales for both Oates and Sunbeam contributed to the consumer products decline, which saw pre-tax earnings down by 38 per cent, but it was the small appliance maker that experienced the largest fall.


The company says Sunbeam has been pressured by intense competition from cheaper, lower-quality home brands and European brands looking for sales beyond their home markets which are struggling economically.


In response, Sunbeam was forced to lower its product pricing to remain competitive.


GUD says the demise of Retravision as a major retailer also dented Sunbeam’s sales.


The company says it is reducing costs at the appliance maker, as well as building overseas alliances and revising its product development program in an effort to boost returns.


However, GUD managing director Ian Campbell says he is not expecting a rapid turnaround in Sunbeam’s fortunes.


“The consumer business will remain under pressure in the second half while we introduce our strategic initiatives to strengthen Sunbeam’s financial performance,” he noted in the report.


GUD also reported small falls in pre-tax earnings for its water and automotive businesses.


However, these were offset by a 103 per cent rise in pre-tax earnings for its industrial products business, which is largely focused on Dexion, which manufactures shelving and storage products for the industrial, warehouse and commercial sectors.


GUD says it will pay a special dividend of 10 cents in addition to its interim dividend of 26 cents a share.


The company’s shares fell 1.1 per cent to $8.30 by 12:57pm (AEDT) after the results were released.

Topics: business-economics-and-finance, electronics, manufacturing, company-news, australia

First posted January 22, 2013 13:08:58

Huawei profit jumps to $2.4b


Chinese telecommunications giant Huawei has posted a 33 per cent jump in profit in 2012.


The telecoms equipment maker made $2.4 billion in the period thanks to a strong performance in Europe and Japan.


Huawei says 66 per cent of its revenue comes from outside of China.


Security concerns about the company’s links to the Chinese army led the Australian government to ban Huawei from tendering for the NBN contract in mid-2012.


Despite that setback, the Chinese telecom equipment company Huawei says revenues from its Australian operations grew by more than 50 per cent in 2012.


Huawei posted Australian revenue of $229 million in the previous year.

Topics: business-economics-and-finance, telecommunications, manufacturing, china

First posted January 22, 2013 09:37:37

Audi Bank says 2012 net profit rose 5pc

BankBEIRUT: Lebanese lender Audi Bank said its net profit rose 5 percent in 2012 as it strengthened its position in its home market and in Egypt and Turkey.

Net profit for the year rose to $384 million in the face of difficult economic conditions in the region, and consolidated assets rose 8.9 percent on the year to $31.3 billion at end-December, Lebanon’s biggest lender by assets said in a statement on Monday.

Audi Bank said the earnings increase was mainly due to consolidating its position in its domestic market, asset growth in Egypt and the launch of its Turkish subsidiary, which fully offset the contraction in activity in war-torn Syria.

The “development strategy in Turkey will revolve around the establishment of a network of close to 100 branches and build an asset and a profit base that would allow the Turkish subsidiary to rank second to Lebanon within the Group,” it said.

Lebanese banks have been hit by a slowdown in domestic economic growth, turmoil in neighbouring Syria and broader uncertainty in the Middle East after uprisings swept the region.

Audi Bank said the growth of its customer deposits grew by 8.1 percent in 2012, the equivalent of $2 billion, moving from $24.8 billion at end-December 2011 to $26.8 billion at end-December 2012.

Copyright Reuters, 2013

Huawei sees 33% jump in profit

21 January 2013 Last updated at 06:43 GMT Huawei office in China Huawei is one of the world’s biggest manufacturers of telecom network equipment China’s Huawei has forecast a 33% jump in profits, boosted by strong performance in Europe and Japan.

The telecoms equipment maker said it expects to have made a net profit of 15.4bn yuan ($2.5bn; £1.5bn) in 2012.

This is in sharp contrast to rival ZTE, which warned on Sunday that it may make a loss of up to 2.9bn yuan in 2012.

Both firms have been trying to expand, but have come under increased scrutiny in markets such as the US over alleged ties to the Chinese government.

Hauwei and ZTE deny the allegations.

Huawei said its final and audited results for 2012 will be released in April.

Smartphone boost?

The firm, which is one of the world’s biggest makers of telecommunications equipment, has also been trying to tap into the fast-growing smartphone market.

Huawei said it made “huge breakthroughs in selling smartphones in Japan, North America, Europe, and other high-end markets” in 2012.

It said it plans to launch new models in the second half of 2013 to build on its growth in the sector.

“Smartphone penetration is still way too low and there is a lot of room for growth,” said Cathy Meng, Huawei’s chief financial officer who is also the daughter of company founder Ren Zhengfei.

Ms Meng added that the firm will also focus on cloud computing, which she said would be “a huge sector in the next five years”.

Huawei said that it expects its revenue to grow between 10 and 12% in 2013.

ANZ hoaxer facing jail despite no profit motive

Updated January 10, 2013 14:39:17

The activist who caused a $314 million temporary plunge in Whitehaven Coal’s share price could face 10 years in jail, despite having no intention of personally profiting from his fake press release.

Jonathan Moylan sparked a 9 per cent fall in Whitehaven’s share price by issuing a fake press release purporting to be from ANZ and claiming the bank had pulled a $1.2 billion loan from the company because of environmental concerns over its Maules Creek development.

The losses were quickly reversed later that day when ANZ and Whitehaven issued statements saying the release was a hoax.

Whitehaven Coal’s chairman, former deputy prime minister Mark Vaile, says the company has been contacted by many concerned shareholders who lost money by selling shares based on the fake release.

“We see it as our responsibility on behalf of our shareholders, many of whom may have suffered some material loss because of this exercise on Monday, to pursue a number of different avenues and of course the primary focus should be the regulator, that is ASIC, in looking at what they can do as far as the corporations law is concerned,” he told the ABC’s 7.30 program.

The Australian Securities and Investments Commission has revealed it is taking the matter very seriously.

In an interview with 7.30, ASIC’s acting chairman Greg Tanzer said the country depended on the integrity of the stock exchange.

ASIC will not go into the details of its investigation, but says if there are potential criminal charges it will move swiftly.

“[Share market integrity is] really important to the Australian economy,” he explained.

“There are thousands of Australian public companies that rely on the market to provide an efficient source of funds and they employ, directly or indirectly, millions of Australians. And on top of that there’s many, many Australian superannuation funds that invest the retirement savings of millions of Australians.”

In an interview this morning with ABC Radio’s The World Today program, Mr Tanzer added that motivation is not relevant to whether ASIC will pursue someone for misleading financial markets.

“I don’t think the identity, or the nature of the person, or their motivations are especially a matter that ASIC needs to concentrate on,” he told ABC Radio’s The World Today program.

“Our focus is on market integrity, and preserving market integrity, and we’re concerned about threats to market integrity wherever they arise.”

Professor Michael Adams, the Dean of Law at the University of Western Sydney, says Mr Moylan is likely to be prosecuted under the Corporations Act, which typically covers white collar criminals rather than environmental activists.

“It looks like the main one ASIC is looking at is called s1041E of the Corporations Act, which is one that deals with false and misleading statements made in respect of securities,” he told Radio National Breakfast.

Under that provision, Mr Moylan faces a maximum penalty of up to $765,000 and 10 years in jail.

In a piece of misfortune for the activist, the maximum fine for making false statements with respect to financial products was increased more than 20-fold in 2010 by the Federal Government, as part of an attempt to increase deterrence for what can be highly lucrative crimes.

The fine is now 4,500 penalty units and, in a further piece of bad luck for Mr Moylan, the value of a penalty unit was raised from $110 to $170, effective from December 28 last year.

To keep the jail terms in line with the financial penalties, the maximum prison sentence for the offence was doubled in 2010.

In increasing the maximum penalties, the Federal Government’s focus was on ensuring the gain from engaging in market misconduct did not outweigh the potential penalties.

“The increased penalty provisions send a clear message to those who seek to profit from these types of market offences that behaviour that undermines the proper functioning of our financial markets will not be tolerated,” said the then-financial services and corporate law minister Chris Bowen in January 2010.

However, Professor Adams says, while s1041E is mainly directed at financial market participants who put out false information for their own or others’ financial gain, there does not need to be an attempt to profit to be successfully prosecuted under the provision.

“In a lot of previous cases where there’s been this sort of fraud and false information to the market it has been for personal gain,” he observed.

“Certainly its a distinction, but the actual provision in question doesn’t require that, there is clearly an intention – from the public information that he has stated it was a very deliberate act – it was not intended to have a personal financial consequence, but it certainly has had a major financial consequence in the stock market.”

Despite facing up to a decade in jail, Mr Moylan says he does not regret his actions.

“Change doesn’t happen without people taking risks,” he told 7.30.

“The consequences to me could be very serious but nowhere near as serious as the impact that this mine is going to have on our water and our farmlands.”

However, the Frontline Action on Coal activist has apologised to shareholders who lost money because of the hoax.

“I certainly didn’t intend any harm to shareholders in Whitehaven and, for the record, I do apologise,” he said.

“But I won’t apologise for exposing ANZ’s dirty investments in Whitehaven Coal.”

The Shareholder’s Association says the media needs to accept its share of the blame for the market selling caused by the fake press release.

The association’s Stephen Mayne says this incident was not a failure on the behalf of regulators or the ASX.

“As a journalist myself I actually think that the journalists and the media need to have a bit more of a look at this,” he argued.

“All the selling didn’t happen because of the press release, it happened because the journalists didn’t check the press release, didn’t check with ANZ, didn’t check that there wasn’t an ASX announcement and that then triggered the panic selling, albeit very briefly.”

ASIC’s Greg Tanzer acknowledges that many investors do rely on media outlets for a large part of their information.

“A number of people may well have been motivated by the fact that the story was on the news wires and taking some comfort from the fact that, it being on the news wires, it’s likely to have been true,” he said.

“Closer market watchers, I suspect, would be aware that the ASX website is the basic fount of information for these types of things, but I think a number of investors would expect that the news wires are a reasonably reliable source of information.”

Topics: business-economics-and-finance, coal, regulation, stockmarket, boggabri-2382, australia, nsw

First posted January 10, 2013 10:46:05

Saudi Telecom Q4 profit falls 79pc on one-off charges

mobile-phone 400JEDDAH: Saudi Telecom Co (STC), the Gulf’s No.1 telecom operator, reported a 79-percent fall in fourth-quarter profit on Monday, missing market expectations, after it took one-time charges related to affiliates in South Africa and India.

STC, which is majority government-owned, made a net profit of 468 million riyals ($124.8 million) in the three months to Dec. 31, down from a 2.28 billion riyals in the prior-year period.

Analysts polled by Reuters on average forecast STC – the largest Gulf telecom operator by market value, with operations across the Muslim world from Indonesia to Turkey – would make a quarterly profit of 2.4 billion riyals.

The former monopoly attributed the fall in net profit to charges on adjusting the fair value on its investment in South Africa’s Cell C and Aircel in India – leading to a one-off non-cash charge of 641 million riyals – and changes in Indian telecom regulations which resulted in a charge of 544 million riyals, related to Aircel.  Quarterly operating income fell 32.5 percent to 1.9 billion riyals.

Revenue from services for the fourth quarter fell 1.7 percent to 15 billion compared with 15.2 billion for the corresponding quarter last year.  Full-year profit for 2012 was 7.4 billion riyals, down from 7.7 billion riyals in 2011.

Soaring demand for broadband has lifted earnings in recent quarters, with STC offering bundle packages to woo customers back from rival operators Etihad Etisalat (Mobily) – an affiliate of UAE operator Etisalat, and Zain Saudi – part-owned by Kuwaiti group Zain.

STC said in a separate statement that it would issue a 0.5 riyal per share dividend for the fourth quarter.

Shares in STC closed at 44 riyals on Sunday.

Copyright Reuters, 2013

Morgan Stanley swings to profit

 In 2012, Morgan Stanley cut 4,500 jobs, or 7%, of its workforce US bank Morgan Stanley has said it swung back to profit in the fourth quarter of 2012, a turnaround it described as a “pivot point”.


It reported a net profit of $481m (£302m) in the last three months of the year, compared to a loss of $275m in the same period a year earlier. Revenue jumped 37% to $7.5bn.


The bank, which has been shedding staff, earned more in fees for financial services.


Shares jumped 5.5% in early trading.


The profit included a net tax benefit of about $155m.


Rival US banks Goldman Sachs and JP Morgan Chase both reported sharp rises in profits on the back of strong performances by their investment banking arms earlier this week. Citigroup also said its profits rose despite $2.32bn in one-off charges.


But Bank of America reported a decline in quarterly profits after it took another financial hit on bad mortgage debt.

‘Meaningful progress’

Over the year, it cut nearly 4,500 jobs, or 7% of its workforce. It plans to cut another 1,300 jobs, with cuts focused on the investment bank and senior-ranking employees.


“After a year of significant challenges, Morgan Stanley has reached a pivot point,” said James Gorman, the bank’s chairman and chief executive.


“We demonstrated meaningful progress in our wealth management joint venture, reaching the highest pre-tax margin since the inception of the joint venture.”


The Wall Street Journal reported this week that the bank plans to change how bonuses are paid to higher-paid bankers.


Bonuses, which are usually awarded in the first couple months of the year, will be paid in four instalments spread over almost three years, instead of one lump sum, the Journal reported.


Compensation was $1.5bn compared with $1.6bn in the same period of a year before, it added.

From Remploy to profit sharing

When Ability Tec moved into the new factory, this office was the only one they could afford to heat In 2012, 32 Remploy factories closed, making thousands of workers with disabilities redundant.


But one factory in Bolton, had a last minute salvation.


The operation has been revived as a social enterprise, dedicated to employing a 75% disabled workforce with all profits going back into the business or its staff.


The first Remploy factories opened in the 1940s, employing people with disabilities. But with the announcement of cuts from government subsidies in March, the future is now bleak for most of its operations.


“I had to make a bit of a stealthy visit, I think I was [pretending to be] a tax inspector.” Oli Randell recalls laughing.


Mr Randell, a 35 year old entrepreneur, was actually there to see if there was a way to save the business.

Continue reading the main story Guy Parckar Head of policy, Leonard Cheshire Disability

Disabled people are far less likely to be employed than non-disabled people.


Despite a slight improvement in recent years, Government statistics show that only around 46% of disabled people are employed compared to 76% of non-disabled people. When in work, disabled people earn less on average too.


In a Leonard Cheshire Disability survey of more than 1,000 disabled people, about half of respondents reported that they had experienced discrimination at work.


We also carried out an experiment by sending out two near-identical CVs to job adverts – the only significant difference was that on one a disability was declared. The result was that the candidate who said they had disability was invited to half the number of job interviews.


Self employment is often a viable option for disabled people and more and more are setting up their own businesses. The high calibre of applicants for initiatives like the Stelios Award for Disabled Entrepreneurs, which our charity runs with Sir Stelios Haji-Ioannou, highlights the huge amount of untapped talent out there.

“The factory was still operating at the time,” he told the BBC, and he did not want to raise the hopes of the workforce, who had been told they would lose their jobs.


Mr Randell’s business has expertise in HR, marketing and finance. It aims to help small companies take the next step, in order to grow at a manageable pace, by offering them part time experienced board members.


Mr Randell was invited by Greater Manchester Chamber of Commerce to visit Remploy’s Bolton factory last summer.


“Every single person looked me in the eye; every single person reacted to me and said ‘hi’.


“You don’t see that all the time when you go in factories,” he said. “There was a lot of warmth there and there was a lot of noise and energy and spark.”


As the factory, along with 35 others throughout the country, faced closure, the chief economist for the Greater Manchester Chamber of Commerce, Dr Brian Sloan, wanted to know if Mr Randell and his colleagues could find funding to start a social enterprise.


Dr Sloan thought that if the overheads could be reduced, the £1.5m turnover business – assembling components onto circuit boards – could have a future.


He told the BBC: “There was sound business behind [this] Remploy factory.


“But they were a public sector organisation trying to run as a business.”

Circuit board Ability Tec assembles components onto circuit boards

The initial period for proposals to save Remploy Bolton had closed, and staff had been made redundant. But Mr Randell and his team did ultimately put in a proposal. This was so late in the proceedings that skips were already on site.

The Eleventh Hour Fortunately for the factory and its workforce, the skips were recalled and the social enterprise, known as Ability Tec, was given the green light.


Former Remploy factory manager Carl Lawton, was the first to be employed, as the director of operations.


Fifty year old Mr Lawton worked for Remploy for 18 years. Before joining Remploy he was frustrated in his career; he had been working as a factory inspector for thirteen years.


At Remploy Mr Lawton’s skills were finally developed. He gradually climbed the career ladder from shop floor operator to team leader to production manager. He spent the last five years at Remploy as factory manager.


Describing the day he was told the factory would close brings Mr Lawton close to tears. He does not talk of his “staff” or “employees”, but rather his people, his family.


When Mr Lawton and his new colleagues took the keys to the 1,600 square feet (148 square metre) former Remploy factory, they worked out of one office, rather than heat any of the larger rooms.

With some orders left from the Remploy outfit, Ability Tec started a scaled down production line in December, employing three former Remploy staff.


As of today, they are still a small enterprise of seven, but have ambitions to grow.


As a social enterprise, the business owns the assets; it is the employees who own the business, for as long as they are employed by it.


The enterprise hopes eventually to achieve profit sharing. But first the team has a plan to become sustainable – buying new machinery and allowing the business to grow.


The enterprise plans to employ 30 people within the next three years.

Able to work

Another element of the social enterprise is to employ people with disabilities.


Once established, Mr Randell and the team would like to tap into the knowledge and experience of the former Remploy staff and become a training centre for other companies looking to employ a workforce that is disabled.


The team chose the name Ability Tec to highlight staff’s abilities, rather than their disabilities.

Staff work a small assembly line Former Remploy staff Teresa Howarth and Joe Gannon back on the assembly line

Teresa Howarth is dyslexic and was concerned about finding work after being made redundant by Remploy.


She told the BBC: “When the Remploy factory closed the future looked bleak really; you hear so many stories that there are no jobs out there.


“It was quite depressing.”


Mr Randell has a physical disability, but has never worked with a disabled workforce. Mr Lawton, the enterprise’s operations director, is able to offer his 18 years of expertise in this area.


“With Remploy, we trained and developed our people,” he said.


“We also knew the abilities and disabilities and how to manage that. That’s the strength we’ve got to go forward.”


In exchange Mr Lawton is learning from Mr Randell’s financial experience in the commercial sector, and how to win new contracts.

More than a factory

Mr Randell recognises what a great manufacturing unit the former Remploy factory was, but knows business expertise was lacking, making it difficult to find new work and to keep the business moving forward.


It was not only a lack of expertise and high overheads that hindered the business.


Often, Mr Lawton and his fellow management team would spend a great deal of time helping members of staff with learning difficulties with important life skills, such as understanding their household bills.


It was, he says, a family. But as a business, offering this type of individual support – however much it was needed, ultimately was not sustainable.


But there are elements of this family atmosphere that Ability Tec are keen to revive.


On Mr Randell’s first visit to the factory, he stopped to read a notice board filled with thank you letters from local school children who had done work experience in the factory.


“They were really heart felt,” he recalled.


“[They really appreciated] the opportunity to come and work in a factory and create something and see the results of their endeavours at the end of the day.”


The staff have already noticed the difference of working for a social enterprise.


One of Remploy’s former workers, Joe Gannon who is deaf, has returned to the factory and is now employed by Ability Tec.


He commented: “The fact it’s a social enterprise [means] we’re working for ourselves.


“It gives you more encouragement.”

Saudi’s Almarai Q4 net profit up 29pc, beating forecasts

JEDDAH: Saudi Arabian dairy and food producer Almarai Co posted a 29.2 percent rise in its fourth-quarter net profit, beating analyst forecasts, the firm said in a bourse statement on Saturday.


Almarai made a net profit of 369 million riyals ($98.4 million) in the three months ending Decmeber 31, compared with 285.5 million riyals in the same period a year earlier.


Six analysts polled by Reuters had forecast, on average, that the company would make 320 million riyals.

Copyright Reuters, 2013

China Minsheng Bank says 2012 net profit up 34.5pc

iQScoc34BEIJING: China Minsheng Bank’s net profit rose 34.5 percent last year to 37.56 billion yuan ($6.04 billion), the lender said in a preliminary earning report filed to the Shanghai stock exchange on Saturday.


 


For a statement on the results of China Minsheng Banking Corp Ltd , the country’s seventh-largest listed bank.


 


Copyright Reuters, 2013

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Related news:Saudi Sabic 4Q net profit up 11pc but miss forecasts – 19.01.13China central bank announces more frequent open market ops – 18.01.13Bank of Ayudhya Q4 net profit surges, meets forecasts – 18.01.13Oman’s Bank Muscat Q4 net profit rises 15.1pc – 17.01.13Net profit of India’s largest IT firm TCS up 23pc – 14.01.13More from this category:Egypt foreign reserves rise after Qatar deposit – 19.01.13Egypt foreign reserves rise after Qatar deposit – 19.01.13SBI gives nod for $558mn capital infusion by govt – 19.01.13US banking earnings paint a mixed picture – 19.01.13IMF to conduct stress tests on Italy banks – 19.01.13More from author:Rain does not dampen Africa Cup beat – 19.01.13Romanian killed in Algeria hostage crisis: PM – 19.01.13Africa Cup of Nations kicks off in Soweto – 19.01.13French designer Andree Putman dies aged 87: family – 19.01.13Lebanese protest French delay in release of leftist militant – 19.01.13 



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Fiscal Review 2012

  Economic Indicators Market at Close Annual2011/12 Foreign Debt$65.562bn Per Cap Income$1,372 GDP Growth3.7% Average CPI10.08% MonthlyNovember Trade Balance$-1.711 bln Exports$1.896 bln Imports$3.607 bln WeeklyJanuary 17, 2013 Reserves$13.782 bln  Top Traded Advancers Decliners NO_IFRAMES   BUSINESS RECORDER:Pakistan NewsWorld NewsBusiness & Finance NewsMarket NewsSports Newse-PaperAAJ TV:Latest NewsWorld NewsNational NewsExclusive NewsBusiness NewsKHISTOCKS:Market today liveTop 25 LiveBRIndex RulesKSE30 MovementPLAY TV:Entertainment NewsProgramsVJsVideosHomePakistanWorldBusiness & FinanceMarketsMarket DataSportsEntertainmentsCopyright Business Recorder. All rights reserved.

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Saudi Sabic 4Q net profit up 11pc but miss forecasts

RIYADH: Saudi Basic Industries Corp (SABIC), the world’s biggest petrochemicals group by market value, posted an 11.3 percent rise in fourth quarter net profits on Saturday, but missed analysts’ forecasts.


SABIC said it enjoyed stronger sales and higher prices in the fourth quarter than it had in the year-earlier period, but its full-year profit fell despite a rise in overall sales.


Its full-year performance, with net income of 24.7 billion riyals ($6.59 billion), represented a fall of 15.5 percent from 2011, when the company enjoyed successive quarters of record performance.


The chemicals, metals and fertilisers conglomerate earned net income of 5.83 billion riyals ($1.55 billion) in the three months ending Dec 31, compared to its profit of 5.24 billion riyals a year ago, it said in a bourse statement.


The fourth-quarter results marked a 7.6 percent fall from its third quarter net earnings.


Five analysts polled by Reuters had forecast, on average, that Saudi Arabia’s largest listed company would earn 6.39 billion riyals.


Sabic, 70 percent state-owned, cited a “higher cost of sales and lower sales prices for certain products, despite higher sales and production volumes and reduction in financial charges” for its fall in 2012 net income.

Copyright Reuters, 2013

Saudi’s Mobily Q4 net profit up 11pc

JEDDAH: Etihad Etisalat (Mobily), Saudi Arabia’s No.2 telecom operator, beat forecasts with an 11-percent rise in quarterly net profit on Saturday.


 


Mobily, an affiliate of the United Arab Emirates’ Etisalat , posted fourth-quarter net profit of 1.878 billion riyals ($500.8 million), up from 1.697 billion riyals in the prior-year period, it said in a bourse statement.


Copyright Reuters, 2013

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More from this category: Hutchinson Whampoa wins $130mn contract to upgrade Omani port – 19.01.13 Saudi’s Almarai Q4 net profit up 29pc, beating forecasts – 19.01.13 Saudi Sabic 4Q net profit up 11pc but miss forecasts – 19.01.13 Boeing suspends 787 deliveries – 19.01.13 Apple, Google chiefs face grilling on ‘no-poaching’ – 19.01.13More from author: Six including four women abducted – 19.01.13 Spot rates of cotton – 19.01.13 Lahore Motorway opens as fog reduces – 19.01.13 Czech Matura enjoys first World Cup win – 19.01.13 Progress made in UN nuclear talks: Iran – 19.01.13 



  NY Closing World Indices The Rupee ArrowEuro1.3321ArrowSterling1.5870ArrowSwiss Franc0.9342ArrowYen90.1000ArrowGold1684.600ArrowCotton78.550ArrowOil95.250 #comments .toolbar img {width:16px; height:16px;}




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Fiscal Review 2012

  Economic Indicators Market at Close Annual2011/12 Foreign Debt$65.562bn Per Cap Income$1,372 GDP Growth3.7% Average CPI10.08% MonthlyNovember Trade Balance$-1.711 bln Exports$1.896 bln Imports$3.607 bln WeeklyJanuary 17, 2013 Reserves$13.782 bln  Top Traded Advancers Decliners NO_IFRAMES   BUSINESS RECORDER: Pakistan NewsWorld NewsBusiness & Finance NewsMarket NewsSports Newse-PaperAAJ TV:Latest NewsWorld NewsNational NewsExclusive NewsBusiness NewsKHISTOCKS:Market today liveTop 25 LiveBRIndex RulesKSE30 MovementPLAY TV:Entertainment NewsProgramsVJsVideosHomePakistanWorldBusiness & FinanceMarketsMarket DataSportsEntertainmentsCopyright Business Recorder. All rights reserved.

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Oman’s Bank Muscat Q4 net profit rises 15.1pc

DUBAI: Bank Muscat, Oman’s largest lender, posted a 15.1 percent increase in fourth-quarter net profit on Thursday, Reuters calculations show, in line with the average estimate of analysts.


The bank made a quarterly net profit of 35 million rials ($90.9 million) in the three months to Dec. 31 compared with 30.4 million rials in the prior-year period, Reuters calculated from previous financial statements.


Six analysts polled by Reuters had on average estimated a fourth-quarter profit of 35 million rials.


Full-year net profits for the bank stood at 139.2 million rials, a 18.5 percent improvement on the 117.5 million rials it reported for 2011, a statement to the Omani bourse said.


The results were boosted by a 13.5 percent increase in non-interest income, which rose to 93.2 million rials, and a 8.6 percent gain in net interest income, which advanced to 230.4 million rials.


Impairments for the final three-month period of 2012 stood at 17 million rials, Reuters calculated, taking them to 57.9 million rials for the full year. This was up 11.1 and 3.2 percent respectively on the corresponding period of 2011.


Loans and advances rose to 5.6 billion rials at the end of 2012, up 16.2 percent from 4.82 billion rials at the same point in 2011.


Deposits increased 10.9 percent in 2012, the bank said, rising to 5.38 billion rials from 4.85 billion rials at the end of 2011.


Earlier this week, Bank Muscat said it had received a licence from the country’s central bank to commence Islamic banking operations under its Meethaq Islamic Banking brand.


Bank Muscat shares rose 0.7 percent in early Muscat trade.

Copyright Reuters, 2013

Markets ease as investors eye profit reports

Posted January 09, 2013 09:05:37

Investors on Wall Street sold down stocks ahead of what is expected to be a sluggish fourth quarter company earnings season in the US.

Financial research firm Bloomberg is estimating overall fourth quarter profit growth of just 2.9 per cent.

By the close of trade the Dow Jones Industrial Average has lost 0.4 per cent or 55 points to 13,329.

The broader S&P 500 Index retreated for a second day by 0.3 per cent, or 5 points, to 1,457.

The technology focused Nasdaq Composite index lost 0.2 per cent to 3,092.

In company news, shares in Yum Brands, the owner of the Taco Bell and KFC chains, slid 4.2 per cent on a bigger than expected fall in fourth quarter sales in China after a government investigation into one of its former suppliers hit demand.

European shares initially rose after a gauge of economic confidence grew by more than forecast but stocks turned negative by the close of trade.

Official figures released show the unemployment rate across the eurozone hit a all-time high of 11.8 per cent in November.

More than 18.8 million people are now unemployed across the 17 nation bloc.

Spain recorded the highest unemployment rate of 26.6 per cent.

The Stoxx Europe 600 Index declined 0.1 per cent, with trading volume 45 per cent higher than the three-month average.

In London the FTSE 100 index shed 0.2 per cent to 6,054.

Shares in the UK’s second-largest department-store chain Debenhams sank 7.7 per cent after it cut its goal for annual profit-margin growth and stepped up discounting.

At 7:55am (AEDT) the Australian March SPI futures contract was pointing to a gain of 5 points, or 0.1 per cent, on the local market.

In currency trade, the yen advanced against the US dollar after touching a two-and-a-half-year low last week.

That is despite Japan’s Finance Minister Taro Aso saying the government will use reserves to buy euro-denominated sovereign debt to weaken the yen.

The Australian dollar rose against the greenback when compared to yesterday’s local close.

It was buying 104.96 US cents, and was also worth 80.22 euro cents, 65.35 British pence, 91.53 Japanese yen and $NZ1.256.

Spot gold prices advanced to $US1,662.30 an ounce.

The price of West Texas intermediate crude was $US92.96 a barrel.

Topics: futures, markets, stockmarket, business-economics-and-finance, currency, united-states, united-kingdom, european-union, australia

Alcoa profit a positive start to reporting season

Posted January 09, 2013 10:31:00

Aluminium production giant Alcoa has kicked off US earnings reporting season by hitting its profit target.

Alcoa made $230 million in the fourth quarter by cost cutting to help offset a drop in aluminium prices.

That compares to a loss of $182 million in the same period a year earlier.

Sales topped $5.6 billion, beating analysts expectations.

Alcoa says it expects global aluminium demand to rise by 7 per cent in 2013, up from 6 per cent in 2012.

Chief financial officer Charles McLane says the result came against the backdrop of tepid global growth.

“You know its been a challenging environment and we have a relentless focus from all of our employees, days working, capital reduction and disciplined capital spend that allows us to reach these targets,” he said.

Topics: business-economics-and-finance, manufacturing, company-news, united-states

Businesses focus on cost cutting to boost profit

Posted January 08, 2013 09:19:05

New research predicts businesses will try to stay profitable by cutting back on spending rather than expanding their operations in the first quarter of this year.

The survey by credit information and debt collecting firm Dun and Bradstreet shows businesses are expecting sales and inventory levels to be sharply lower than in the previous quarter.

At the same time those surveyed expect profits to rise due to cost cutting.

Dun and Bradstreet spokeswoman Danielle Woods says businesses are becoming smarter with the way they use their cash.

“There’s certainly a sense out there that cost management really needs to come to the fore,” she said.

“Things like getting accounts in the door and making sure that they get those invoices out and then they chase those debtors, because a bill is not a bill until its actually finally been paid and that money is through the door.”

The focus on cost cutting means it is likely to be a difficult start to the year for job seekers.

Danielle Woods says that approach to boosting profits is likely to mean limited job openings.

“There’s certainly a flat trend in terms of employment,” she added.

“What we’re seeing for the March quarter is only 7 per cent of firms are actually expecting to take on more staff than they had at the same time last year.”

Topics: business-economics-and-finance, economic-trends, australia

Macmahon tips $2 million construction profit sale

Updated December 24, 2012 13:36:35

Perth-based mining contractor Macmahon expects to make just $2 million from the sale of its construction business.

Macmahon says it is selling its construction assets to Leighton Contractors for $20 million but only expects to make $14 million transferring employee liabilities.

It also anticipates it will incur restructuring and redundancy costs of about $12 million, reducing its total profit to $2 million.

Macmahon says its decision to sell out of construction is part of a new strategy to become a dedicated mining services contractor.

Under the deal, most of its construction projects will be transferred to Leighton, apart from four which are nearing completion.

The company says some people will lose their jobs but has not put a figure on it yet.

Topics: mining-industry, perth-6000

First posted December 24, 2012 13:32:11

US markets rise on positive profit report

Posted January 10, 2013 09:01:11

A positive start to the US corporate earnings season helped Wall Street reverse two days of losses, as investors bet on a third straight year of profit growth.

Alcoa shares edged up after the company kicked off earnings season after the closing bell yesterday with a $230 million fourth quarter profit, which was in line with analysts’ expectations.

Financial firm Bloomberg is predicting profit growth of 2.9 per cent in the fourth quarter, extending a three-year expansion, but marking the second slowest quarterly growth since 2009.

By the close the Dow Jones Industrial Average added 62 points, or 0.5 per cent, to 13,391.

Boeing shares recovered 3.5 per cent after having slumped for the previous two sessions following a fire on board one of its new 787 Dreamliners.

The S&P 500 index was led higher by industrial and healthcare shares.

By the close, the broad index added 0.3 per cent to 1,461.

The technology focused Nasdaq composite index gained 0.5 per cent to 3,106.

There are reports the sixth-largest bank in the US, Morgan Stanley, is planning to cut about 1,600 jobs from its investment bank and support staff in coming weeks.

Across the Atlantic, more traders entered the market with stronger than average volumes after a reassuring start to the US earnings season lifted demand for riskier assets.

The Stoxx Europe 600 Index closed at its highest level in more than 22 months as telecommunications companies and banks led gains.

London’s FTSE 100 index hit its highest level since May 2008 and closed up 45 points to 6,099.

Germany’s DAX added 25 points to 7,720.

At 8:20am (AEDT) the Australian SPI futures contract was pointing to a gain of 10 points, or 0.2 per cent, when the session begins.

The Japanese yen weakened against the greenback on speculation the Bank of Japan will increase stimulus measures.

The Australian dollar was supported by a stronger iron ore price overnight. It was buying 105.07 US cents, 80.46 euro cents and 65.60 British pence.

The spot gold price was at $US1,657.23 ounce.

World oil prices were flat ahead of a European Central Bank meeting.

West Texas intermediate crude was worth $US92.92 a barrel.

Topics: business-economics-and-finance, markets, currency, stockmarket, futures, united-states, united-kingdom, european-union, australia

Saudi Hollandi Q4 net profit up 35.6 percent

Saudi Hollandi BankJEDDAH: Saudi Hollandi Bank , Saudi Arabia’s fourth-largest listed bank, said on Saturday its fourth quarter net profit rose 35.6 percent compared to the same period last year.


 


The lender said in a statement posted on the Saudi bourse’s website it made 313.4 million riyals ($83.6 million) in the last three months of 2012 compared to 231.2 million in the last quarter of 2011.


 


Copyright Reuters, 2013

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Related news: Qatar National Bank Q4 net profit flat; meets forecasts – 13.01.13 Israel’s Bank Leumi quarterly net profit jumps – 29.11.12 Consumer goods firm Henkel posts boosted Q3 net profit – 16.11.12 Zurich Insurance Q3 net profit misses poll – 15.11.12 SingTel says second-quarter net profit down 1.6pc – 14.11.12More from this category: Qatar National Bank Q4 net profit flat; meets forecasts – 13.01.13 Egypt central bank offers $75mn at 9th currency auction – 13.01.13 Credit Suisse to cut bonus pool by 20pc – 13.01.13 Costa Rica considers introducing capital controls – 12.01.13 Brazil rates to remain on hold for second straight time: POLL – 11.01.13More from author: India Dec inflation seen up slightly; rate cut still expected – 14.01.13 Aussie & NZ dollars retreat on advancing euro, but firm vs yen – 14.01.13 India reaps reward of bumper wheat crops as world exports shrink – 14.01.13 FX fear factor returns to haunt Indonesian investors – 14.01.13 IMF deal will help Egypt’s ailing economy – 14.01.13 



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Fiscal Review 2012

  Economic Indicators Market at Close Annual2011/12 Foreign Debt$65.562bn Per Cap Income$1,372 GDP Growth3.7% Average CPI10.08% MonthlyNovember Trade Balance$-1.711 bln Exports$1.896 bln Imports$3.607 bln WeeklyJanuary 07, 2012 Reserves$13.808 bln  Top Traded Advancers Decliners NO_IFRAMES   BUSINESS RECORDER: Pakistan NewsWorld NewsBusiness & Finance NewsMarket NewsSports Newse-PaperAAJ TV:Latest NewsWorld NewsNational NewsExclusive NewsBusiness NewsKHISTOCKS:Market today liveTop 25 LiveBRIndex RulesKSE30 MovementPLAY TV:Entertainment NewsProgramsVJsVideosHomePakistanWorldBusiness & FinanceMarketsMarket DataSportsEntertainmentsCopyright Business Recorder. All rights reserved.

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Qatar National Bank Q4 net profit flat; meets forecasts

qatar-flagDOHA: Qatar National Bank (QNB), the acquisitive Gulf Arab lender, on Sunday posted fourth-quarter net profits which were essentially flat compared with the previous year, meeting analysts’ forecasts.


The Gulf state’s largest lender, which agreed to buy a majority stake in the Egyptian arm of Societe Generale in December, posted a net profit of 2.1 billion riyals ($577 million) for the fourth-quarter, according to Reuters calculations, compared with the same amount a year earlier.


Reuters calculated the net profit from previous financial statements. Full-year net profit was 8.3 billion riyals, up 11.1 percent from a year ago, the company said in a statement Sunday.


Analysts on average forecast a net profit of 2.1 billion riyals in a Reuters poll.


The bank set a cash dividend at 60 percent of nominal earnings per share value, equivalent to 6 riyals per share, the statement said.


QNB, whose results are generally seen as an indicator for the sector’s performance in the country, said total assets grew 21.5 percent to 367 billion riyals in 2012, the highest ever achieved, as a result of a 28.9 percent increase in loans and advances.


Deposits grew 34.9 percent to 270 billion riyals, with the loans-to-deposits ratio reaching 92.6 percent at the end of 2012, the statement said. The ratio of non-performing loans to total loans was 1.3 percent.


QNB, which has snapped up several banking stakes as part of a regional expansion strategy, said in December it was now looking at a majority stake in a top 10 Turkish bank as a means to add value.


The bank, which already has stakes in lenders in countries such as Indonesia, Jordan and Tunisia, wants its international business to contribute around 40 percent of profit and 45 percent of total assets by 2017, Chief Financial Officer Ramzi Mari said in December, up from around 17 percent and 30 percent prior to the NSGB transaction.


The lender, which is 50-percent owned by sovereign wealth fund Qatar Investment Authority and has a market value of around $26 billion, raised its stake in Abu Dhabi-based Commercial Bank International to 39.9 percent from 16.5 percent last year.


It also boosted its stake in Iraq’s Mansour Bank to 51 percent and bought a 49 percent stake in Libya’s Bank of Commerce and Development in April.


In November QNB launched a $1 billion bond, its second debt markets foray of 2012.


QNB shares closed down 1.7 percent on Sunday before the results were announced.

Copyright Reuters, 2013
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Mulberry confirms profit squeeze

6 December 2012 Last updated at 09:07 GMT Mulberry handbag Mulberry says its full-year profits would still meet existing market expectations Mulberry has confirmed that the cost of improving the quality of its luxury goods has squeezed its profits.

The firm, famous for its leather bags, also revealed that wholesale sales had fallen 4% in the half year to September while retail sales growth slowed.

Profits for the six-month period came in at £10m, down 36% from a year ago.

Mulberry warned in October that profits would fall short of expectations due to weak international demand, including a drop in wholesale orders from Asia.

‘Challenging environment’

The British company, some of whose handbags cost £4,500 each, repeated that its wholesale business was facing “a more challenging external environment in Asia, resulting in cautious ordering by franchise partners”.

However, chief executive Bruno Guillon said that he expected wholesale sales to rebound in the New Year.

Retail sales growth meanwhile was 7% on a like-for-like basis – excluding the effect of changes in floorspace – compared with the 26% growth rate seen in 2011.

However, the firm said this growth rate had picked up in October and November, reaching 11%.

On top of the slowdown in sales, Mulberry also revealed a squeeze in its profit margins, due to the cost of employing higher quality materials and manufacturing techniques for its goods.

“The UK retail business and key wholesale accounts have continued to perform well in the context of a challenging economic environment,” said Mr Guillon.

“During the period, we have rationalised certain wholesale accounts and refocused the outlet business, which has impacted financial performance in the short term. However we firmly believe that this is in the long-term interests of transforming Mulberry into a global luxury brand.”

The company said that it expected its full-year profits to be in line with market expectations.

Shares in Mulberry have been on the slide since May, and fell by a quarter following its profits warning in October.

Its share price has since recovered, and rose a further 0.4% in Thursday morning trading following the half-year results release, but still remains more than 50% down from its peak in May.

Wimbledon reports record profit

Tennis star Andy Murray The LTA said Andy Murray’s success had encouraged British players’ efforts The Lawn Tennis Association (LTA) says this summer’s Wimbledon Championships saw profits jump by 7% to record levels.


The LTA said the tournament’s profits for this year were £37.8m.


The organisation invests the surplus back into British tennis.


It spent £12.3m in the past year investing in developing British tennis players and more than £17m on encouraging people to take up the sport.


The LTA said the number of active tennis players was growing.


It pointed to a survey by Sport England which said adult participants rose by 11% from last year’s levels to 417,700.


There was a similar rise in numbers among the under-16 group to 58,400.


The LTA said Andy Murray’s best year to date – including his Olympic gold medal and winning his first Grand Slam at the US Open – played a major part in strengthening the sport at its grass roots.


It noted that the year had been unique with the Olympic and Paralympic Games Tennis events added to the normal programme of the Wimbledon Championships, the Aegon Championships and the Barclays ATP World Tour Finals.

Deutsche Bank warns of profit hit from restructuring

Deutsche-FRANKFURT: Deutsche Bank, Germany’s biggest lender, warned on Thursday that its fourth-quarter earnings will take a big hit from restructuring costs.


The reporting period from October to December was “so far characterised by a continued difficult macroeconomic environment with low volatility and by the usual seasonal slowdown,” Deutsche Bank said in a statement.


“Despite this environment, we have achieved solid operational results in October and November across all our core businesses,” it said.


“However, our fourth-quarter results will include a number of one-off items,” it cautioned, citing its cost-cutting programme and the cost of integrating its Postbank unit, as well as negative impacts from portfolio adjustments and writedowns.


“Our year-end closing activities including impairment reviews and the review of provisioning levels, are still ongoing.


“However, we currently expect these specific items to have a significant negative impact on earnings in the fourth quarter,” Deutsche Bank wrote.


The bank said it had also completed its plans to place 122 billion euros ($160 billion) worth of non-core assets into a separate “non-core operations unit or NCOU,” which became operational in November.


Deutsche Bank also reiterated its goal to achieve a so-called Core Tier 1 ratio — a gauge of its financial strength — of “at least 8.0 percent by the end of the first quarter of 2013.”


The profit warning hit Deutsche Bank shares, which were the biggest losers on the Frankfurt stock exchange, showing a loss of 2.74 percent in a stable to slightly softer market.

Copyright AFP (Agence France-Presse), 2012**

Scotiabank profit rises 31pc on wholesale banking

TORONTO: Bank of Nova Scotia capped off the fourth-quarter earnings season for Canadian banks with a slightly stronger than expected 31 percent profit gain on Friday, as strong wholesale banking income made up for more sluggish international growth.


Following the trend of most of its peers this quarter, profit gains were driven by trading and investment banking income, while domestic loan growth was steady despite worries that a cooling housing market will dry up demand.


The bank, Canada’s third-largest, earned C$1.52 billion ($1.54 billion), or C$1.18 a share in the fiscal fourth quarter ended Oct. 31. That compared with a year-before profit of C$1.16 billion, or 97 Canadian cents a share.


Excluding a charge for amortization of intangibles, the bank earned C$1.21, coming in slightly ahead of analysts’ expectations of a profit of C$1.18 a share.


The bank’s shares ended the session down 3 Canadian cents at C$55.53 on the Toronto Stock Exchange.


Toronto-based Scotiabank boasts operations in more than 50 countries, with the heaviest weighting in Latin America and a growing presence in Asia.


Scotiabank’s international consumer banking segment posted a 22 percent gain in profit to C$453 million, helped by the acquisition in January of Colombia’s Banco Colpatria.


Compared with the third quarter, however, international profit rose only 2.5 percent and net interest income retreated. The result was also little changed from the second quarter, raising concerns about growth in the bank’s most high-profile segment, said Barclays Capital analyst John Aiken.


“Ultimately, the investment thesis for Bank of Nova Scotia at 30,000 feet is growth in its international segment, and this has not happened for two quarters in a row,” he said.


The bank acknowledged in a statement that economic momentum in major emerging markets is moderating, but said those markets should remain the major drivers of global growth through next year and beyond.


ACQUISITIONS


Scotiabank has made dozens of small transactions in the wake of the 2008 financial crisis, the bulk of them international and valued at less than C$1 billion.


Speaking on a conference call, company officials said they plan to make more “tuck-in” acquisitions for the global wealth management division.


However, they could were unable to offer any hints as to when their much-delayed acquisition of a 20 percent stake in China’s Bank of Guangzhou would be finalized.


Scotiabank had initially expected to close the C$719 million deal last year, but the process has dragged on as the bank deals with multiple layers of government approval.


Brian Porter, who was head of the bank’s international banking division before taking over as president last month, noted the municipal government of Guangzhou recently changed, but said he believed the company was in good stead with the local regulator.


“These things take time in China and I can’t forecast whether it’s going to be Q2 or Q4, but we’re making headway,” he said.


 MARKETS STRONG


Profit at the bank’s global banking and markets division, its wholesale banking unit formerly known as Scotia Capital, jumped 63 percent to C$396 million as trading and investment banking improved from a relatively weak result in the fourth quarter of 2011.


The Canadian banking segment earned C$481 million, up 15 percent, driven by an 8 percent rise in residential mortgages, and largely bucking the trend of narrower loan margins that pinched results at Scotiabank’s rivals.


The bank scored a coup in August when it won a bidding war for the Canadian online banking arm of Dutch lender ING Groep , adding C$40 billion in assets and C$30 billion in deposits in a segment where significant market-share gains are hard to come by.

Copyright Reuters, 2012

RBC profit rises 22 percent on strong trading

TORONTO: Royal Bank of Canada’s quarterly profit rose 22 percent on a sharp jump in fixed income trading revenue and steady loan growth, suggesting the long-awaited slowdown in Canadian consumer lending has yet to materialize.


RBC, Canada’s largest bank and the first Canadian lender to report year-end results, said on Thursday it earned C$1.9 billion, or C$1.25 a share, in the fourth quarter ended Oct. 31.


That compared with a year-earlier profit of C$1.6 billion, or C$1.02 a share.


Excluding certain items, the bank earned C$1.27 a share, just ahead of analysts’ average estimate of C$1.26, according to Thomson Reuters I/B/E/S.


“It was a solid quarter, but I think we’re characterizing it as unspectacular,” said John Aiken, an analyst at Barclays Capital Markets, noting that credit quality weakened in the quarter, with loan loss provisions rising 31 percent to C$362 million.


Capital markets income more than tripled to C$410 million, benefiting from fixed-income trading results that compared with an abnormally weak quarter a year earlier. Among Canadian banks, RBC has the largest capital markets-related business.


Personal and commercial banking income rose 9 percent to C$1.0 billion, as a 7 percent rise in loan volumes more than offset higher expenses.


The loan growth came despite concerns that lending might slow because of a cooling housing market and record-high Canadian consumer debt levels.


SLOWDOWN IN 2013?


Expectations for a sharp slowdown in mortgage and consumer lending growth have risen over the past year as Canadians have dealt with record debt levels and as government moves to tighten mortgage standards have started to cool the red-hot housing market.


RBC’s results confirm that a slowdown in lending will likely be a 2013 story, said Peter Routledge, an analyst at National Bank Financial.


“We’re still waiting for it. If we do have a real slowdown in the housing market, it’ll come later than anyone expected,” he said.


Speaking on a conference call, RBC Chief Executive Gordon Nixon acknowledged the strong loan growth will be difficult to duplicate going forward.


“While we anticipate that the strong growth in consumer lending that we experienced this year will moderate, we continue to have good momentum in the higher-margin commercial business,” he said.


While loan growth was steady, the interest margins on the loans narrowed to 2.82 percent from 2.97 percent in the third quarter, as expiring loans were renewed at rock-bottom interest rates.


Wealth management income rose 16 percent to C$207 million, while the bank’s insurance segment saw income slip 3 percent to C$194 million.


For the year, the bank earned a record C$7.5 billion, up 17 percent from 2011.


RBC’s results kick off what is expected to be a strong quarterly reporting period for Canadian banks, with year-over-year profit gains of around 15 percent expected, due largely to stronger capital markets-related revenue.


Bank of Montreal, Canada’s No. 4 bank, will report next Tuesday, followed two days later by Toronto-Dominion Bank and Canadian Imperial Bank of Commerce, the country’s No. 2 and No. 5 banks, respectively.


Shares of RBC, which last month agreed to buy the Canadian auto finance arm of Ally Financial in a $4.1 billion deal, closed at C$58.35 on Wednesday.


Aiken said he doubted the results would have much of an impact on the bank’s stock valuation.

Copyright Reuters, 2012

Airbus CEO upbeat on EADS revamp, profit growth

LONDON: The head of Europe’s Airbus said on Monday he was “relaxed” about an imminent shake-up of shareholdings in Franco-German-led parent company EADS and expressed confidence the planemaker would have “free hands” to pursue its growth.


Fabrice Bregier told Reuters Airbus had sold almost 200 planes in November, leaving it just four short of a target of 650 for the year. After cancellations, net orders stood at 585 and deliveries at 516 in January-November.


Amid concerns expressed by some analysts about a squeeze on profits and a spike in spending in the middle of the decade, Bregier insisted Boeing’s European rival had the potential to increase its profits on a yearly basis for the next four to five years.


He also said his priority was to maintain narrowbody production at a record 42 planes a month during a transition period between two models of A320 aircraft in mid-decade.


He was speaking as European nations fine-tuned a deal to alter the corporate structure of Europe’s largest aeropace group, brnging in Germany as a direct shareholder of EADS for the first time while reducing industrial proxy shareholdings.

Copyright Reuters, 2012