Australian Stocks Dive; Virgin Loss Narrows, Orica Writes Down $1.6 B

Marcus Jacob
07 Aug, 2015
New York City

ASX 200 index fell sharply and bank stocks led the decliners for the second day in a row. Virgin Australia reported net loss on widening loss in its international operations. Explosive maker Orica Ltd plans to write down $1.65 billion as mining industry downturn cuts demand.

[R]5:30 PM Sydney, Australia – ASX 200 index fell sharply and bank stocks led the decliners for the second day in a row. Virgin Australia reported net loss on widening loss in its international operations. Explosive maker Orica Ltd plans to write down $1.65 billion as mining industry downturn cuts demand.[/R]

Australian market indexes opened sharply lower following market drops in New York and extended weekly losses.

The seasonally adjusted home loans in June climbed 4.4% to 52,672 compared to 6.1% decline in May, the Australian Bureau of Statistics said.

The department added the value of home loans jumped 5.5% to $18.56 billion after 5.3% decrease in the previous month.

Australian dollar closed at 73.70 U.S. cents and in stock trading turnover gained to 710 million shares worth $5.9 billion.

At close, the ASX 200 Index declined 135.30 or 2.4% to 5,474.80 and the broader All Ordinaries Index slumped 127.80 to 5,472.30.

For the week, the ASX 200 plunged 3.7%.

In commodities trading, gold added US$2 to US$1,089 an ounce and Brent crude edged down 0.05 cents to close at US$49.54 a barrel.

Australian Stock Movers

Hills Ltd gained 0.9% to 53 cents after the electronic security systems provider forecasted net profit after-tax for the year of about $11 million and will take an impairment charge of $94 million.

Orica Ltd tumbled 16.9% to $15.64 after the blasting products provider lowered annual earnings outlook by 10% to 15% from the previous estimate of $490 million on the non-cash impairment charge in the range of $1.35 to $1.65 billion.

The mine explosive products maker completed buy back of 2.63 million shares worth about $53.5 million.

Payce Consolidated Limited closed unchanged at $8.50 after the residential and commercial property developer exchanged contracts to acquire 8.7 hectare industrial site in Wharf Road, in the western Sydney for about $144.5 million with a lease-back for up to 5-years.

Virgin Australia Holdings Ltd slipped 1.1% to 43.5 cents after the discount airline reported revenues in the first-half ending in June climbed 10.2% to $4.75 billion form $4.31 billion in a year ago period.

Net loss in the year narrowed to $93.8 million compared to $353.8 million and diluted earnings per share slumped to 43.5 cents from 237 cents in a year ago period.

The airline said domestic-revenue-passengers in the year slipped 1.3% to 17,128,596 from 17,349,453 and load factor fell 1.3 percentage point to 75.6% compared to 76.9% in a year ago period.