ANZ Declares Record Profit; Pacific Brands Loss Widens

Marcus Jacob
17 Feb, 2012
New York City

Australian stocks closed lower for the third week in a row. In trading today, banks gained after ANZ reported cash profit of $1.48 billion and net profit and the bank refused to lower mortgage rates. Pacific Brands reported higher loss.

[R]8:00 PM Sydney – Australian stocks closed lower for the third week in a row. In trading today, banks gained after ANZ reported cash profit of $1.48 billion and net profit and the bank refused to lower mortgage rates. Pacific Brands reported higher loss.[/R]

Australian stocks closed higher but declined for the third week in a row as international worries and rising dollar offered cross currents in the market trading.

Investors focused on the weak earnings from Pacific Brands, in-line earnings from Treasury Wine Estates and near record profit from ANZ. Banks face more consumer backlash as management refused to cut executive bonuses and pass on higher funding costs to consumers.

The ASX 200 index closed higher 14 to 4,195.9 and All Ordinaries index added 16.1 to 4,273.3.

In trading, volume declined to 1.87 billion shares worth $4.2 billion from 2.02 billion shares worth $5 billion on Thursday. Of the shares traded, 565 increased, 422 decreased and 389 were unchanged.

The Australian dollar edged higher to close at $1.0736.

Stock Movers

BHP Billiton Ltd fell 10 cents to $35.20 and Rio Tinto Ltd declined 71 cents to $66.57. Fortescue Metals Group declined 2 cents to $5.29.

Lynas Corporation Limited closed unchanged at $1.22 and Iluka Resources increased 32 cents to $16.60. Newcrest Mining fell 17 cents to $33.77.

Oil Search Limited increased 8 cents to $6.47, Santos Limited rose 1 cent at $13.56 and Woodside Petroleum increased 8 cents to $34.93.

Commonwealth Bank of Australia decreased 17 cents to $49.85, Westpac fell 7 cents and NAB increased 9 cents to $22.72.

ANZ increased 35 cent to $21.55 after the bank reported December quarter profit increased 5.7% to $1.48 billion on $55 million lower debt provisions for bad debts. Australian deposits rose 3.6% and mortgage sales increased 2.4%.

Chief Executive Mike Smith suggested additional interest rate hikes. Banks have focused on preserving margins and not cutting executive bonuses but pass on any increase in wholesale rates to consumers.

Goodman Fielder soared 4.5 cents to 52.5 cents a day after the baker reported first half profit declined 77% from a year ago period.

David Jones Limited increased 8 cent to $2.46 and Harvey Norman Holdings added 3 cents to $2.01. Woolworths increased 8 cents to $24.86.

Pacific Brands increased 1 cent to 67 cents after chief executive Sue Morphet said general operating environment “a very difficult and challenging one” and she blamed the “unprecedented spike” in cotton prices even though they are less than 5% of total retail price.

Sales in the first half declined to $684.7 million from $852.07 million a year ago period.

The company reported first half loss of $362.4 million compared to net loss of $165.9 million in the prior year period. Excluding one-time charges, net profit in the period declined 38.4% to $35.7 million.

The company also confirmed that it received several takeover inquiries after the January bid from KKR that valued the company at $600 million.

Treasury Wine Estates increased 5% to $3.70 after it reported first half profit that met expectations.

Qantas Airways Ltd fell 2 cents to $1.63, Virgin Australia closed unchanged at 35.5 cents and Flight Centre decreased 38 cents to $20.07.

QR National closed down 3 cents to $3.68.