Surprise Jump in Australian Capex, Qantas Reports Record $2.8 B Loss

Marcus Jacob
28 Aug, 2014
New York City

Stocks in Sydney declined and capital expenditure in the June quarter rose 1.1% but fell 4% from a year ago. The better than expected total capex masked the difficulty faced by the economy in transitioning from the mining led boom.

[R]5:00 PM Sydney, Australia – Stocks in Sydney declined and capital expenditure in the June quarter rose 1.1% but fell 4% from a year ago. The better than expected total capex masked the difficulty faced by the economy in transitioning from the mining led boom.[/R]

Stocks in Sydney traded lower despite better-than-expected capital expenditure data for June quarter and Qantas reported larger than expected loss.

Capital Spending in June quarter rose 1.1% to $37.6 billion from the previous quarter but declined 4% from a year ago, Australian Bureau of Statistics reported today.

Economists were looking for capex to decline 0.9% on a quarterly basis.

Investment in equipment, plant and machinery declined 0.9% on a quarterly basis and fell 10.1% from a year ago quarter to $12.4 billion.

Australian dollar closed at 93.55 U.S. cents and on the stock market turnover climbed to 1.04 billion shares worth $5.19 billion.

ASX 200 index slumped 26.80 or 0.5% to 5,624.40 and the broader All Ordinaries dropped 27.60 to 5,621.30.

Stocks in Review

Billabong International Limited declined 3.6% to 54 cents after the surf, skate, snow and sports apparel retailer said revenue in the year ending in June jumped 1.6% to $1.12 billion from $1.11 billion a year ago period.

Net loss in the year narrowed to $233.7 million compared to $859.5 million and diluted loss per share dropped to 24.9 cents from $1.05 a year earlier.

Nine Entertainment Co Holdings Limited slumped 3.3% to $2.03 after the media and entertainment company reported revenue in the year ending in June soared 22% to $1.55 billion from $1.27 billion a year ago period.

Profit in the year tumbled 95.5% to $57.8 million compared to $1.29 billion and diluted earnings per share declined to 7 cents from $3.76 a year earlier.

Qantas Airways Limited climbed 6.9% to $1.38 after the airline company stated total revenue in the year ending in June $15.4 billion from $15.9 billion a year ago period.

Net in the year swung to a loss of $2.84 billion compared to profit of $2 million and diluted loss per share swung to $1.29 from 0.04 cents of earnings per share a year earlier.

Most of the losses stemmed from the accounting write off of assets in international division after the company expansion failed to list revenues and passenger booking in face of rising competition from Middle East carriers.

International division reported a loss of $497 million compared to a loss of $246 million.

Revenues declined in domestic, international and Jetstar Group divisions and only the freight division reported a slight increase.

The airline reported record loss and said it plans to eliminate 5,000 positions by the end of fiscal 2015.

Ramsay Health Care Limited gained 1.4% to $52.06 after the private hospitals operator reported revenue in the year ending in June climbed 17.5% to $4.93 billion from $4.18 billion a year ago period.

Net profit in the year surged 15.5% to $310 million compared to $266.4 million and diluted earnings per share jumped to $1.43 from $1.24 a year earlier.