Australian Indexes Track Lower Iron Ore Prices, Woolworths Net Rises to $2.5 B

Marcus Jacob
29 Aug, 2014
New York City

Australian market indexes gained after a month of volatile performance and a decline in the week. Iron ore prices declined 8.7% in August and resource stocks fell 5% in the month. Virgin Australia joined Qantas in announcing a large annual loss.

[R]5:00 PM Sydney, Australia – Australian market indexes gained after a month of volatile performance and a decline in the week. Iron ore prices declined 8.7% in August and resource stocks fell 5% in the month. Virgin Australia joined Qantas in announcing a large annual loss.[/R]

Australian investors stayed on side line despite most companies reporting better than expected earnings and declaring higher dividend.

As the earnings season wind down, investors began reviewing the overall performance by industries and sectors and mining and energy sector struggled to win investor’s favour.

BHP Billiton and Rio Tinto declined more than 5% despite reporting record profits.

Iron ore prices declined 8.7% in August after another decline on Friday extended losses and closed at $87.30 a ton.

Australian dollar closed at 93.57 U.S. cents and on the stock market turnover rose to 963 million shares worth $6.98 billion.

Australian stocks closed flat on Friday, edged down in the week and gained in August.

ASX 200 index edged up 1.50 to 5,625.90 and the broader All Ordinaries index rose 3.30 to 5,624.60.

For the week, ASX 200 fell 0.4% and gained 0.6% in August.

Stocks in Review

Harvey Norman Holdings Limited surged 7.9% to $3.55 after the consumer products retailer reported revenue in the year ending in June soared 14.4% to $1.51 billion from $1.32 billion a year ago period.

Net income in the year surged 46.8% to $212.2 million compared to $144.5 million and diluted earnings per share jumped to 19.91 cents from 13.38 cents a year earlier.

Paladin Energy Ltd climbed 4.9% to 42.5 cents after the uranium explorer said revenue in the year ending in June declined 19.9% to US$329.5 million from US$411.5 million a year ago period.

Net loss in the year narrowed to US$338.4 million compared to US$420.9 million and diluted loss per share dropped to 34.4 cents from 49.1 cents a year earlier.

Woolworths Limited declined 2.1% to $36.16 after the food and liquor retailer reported revenue in the year ending in June jumped 3.9% to $60.95 billion from $58.67 million a year ago period.

Net profit in the year climbed 8.4% to $2.45 billion compared to $2.26 billion and diluted earnings per share increased to $1.96 from $1.81 a year earlier.

The grocery retailer said online sales in the year surged 50% to $1.2 billion and Food and Liquor sales jumped 4.7% to $41.2 billion compared to last year.

The supermarket chain forecasted net profit in fiscal 2015 to increase in the range of 4% to 7%.

Virgin Australia Holdings Ltd jumped 2.5% to 41.5 cents after the airline stated revenue in the year ending in June climbed 7.2% to $4.31 billion from $4.02 billion a year ago period.

Net loss in the year widened to $355.6 million compared to $98.1 million and diluted loss per share increased to 11.4 cents from 4.1 cents a year earlier.

Underlying loss in the period was $211 million and the domestic airline also sold its 35% stake in frequent flyer segment to a private equity firm.