Alumina Earnings Fell, Coal Mines Resumes

123jump.com Staff
31 Jan, 2008
New York City

Australian stocks gained as market turnover improved and sentiment recovered in Asia. Alumina 2007 earnings in 2007 fell 14.6%. Woolworth and Foodstuff were ordered by court to not make an offer for Warehouse Group before March. MFS asserted that Stell sale talks are on target. Rio Tinto announced full production shcedule at two of its coal mines and also expanded its smelting capacity in Canada. Origin Energy second quarter gas and oil sales increased to $126 million.

[R]3:00AM New York, 7:00PM Sydney - ASX 200 index rose 0.6% after late rally by major stocks.[/R]

ASX 200 index gained 0.6% or 31.6 to close at 5,650.30.

The Preliminary market turnover was 1.84 billion shares worth $6.73 billion, with 515 shares moving up, 723 moving down and 308 unchanged.

The most traded stock was Great Gold Mines with 261.09 million shares worth $11.43 million changing hands with shares rising 2.6%.

ALUMINA Earnings

Leading aluminum producer, ALUMINA today announced a 14.6% fall in its annual earnings. The company said its net profit for 2007 was $436.40 million, down from $511.10 million the previous year.

Underlying net profit, which reflects the impact of certain accounting items, was $405.60 million, down from $569.40 million. The company attributed the fall in profits to higher operation costs incurred by Alcoa World Alumina and Chemicals in which it has a 40 % stake and the impact of a stronger Australian dollar.

In its future forecast Alumina said its subsidiary''s costs were likely to increase by about US$24 a ton, due to currency impacts, higher average energy and caustic prices and increased bauxite shipping costs.

Alcoa World Alumina and Chemicals'' 2008 aluminum production and sales are forecast to increase by half a million ton to 14.8 million ton, with the Pinjarra refinery in Western Australia operating at full capacity. Alumina fell 4.7%.




Takeover for Warehouse Group

Woolworths Ltd. and Foodstuffs NZ Ltd''s bid for Warehouse Group Ltd. of New Zealand, would have to wait until March after the Commerce Commission gained approval to appeal a court ruling that had allowed a takeover by either company.

High Court gave both Woolworths and Foodstuffs until the end of business tomorrow to file a pledge saying that no acquisition will take place before March.

Each of the two companies own 10% of Warehouse. The initial bid started more than six months ago when Woolworths purchased shares in Warehouse.

Warehouse''s shares jumped 23% in November when the court ruled that a takeover by either suitor didn''t pose a risk to competition. Warehouse rose 1.8% in New Zealand while Woolworths fell 2.8%.

MFS Update

Troubled financial services firm MFS Ltd today disclosed that talks over the sale of its Stella tourism business were progressing well. MFS has been restructuring following the collapse of a $1.3 billion ($1.15 billion) deal to sell its funds management business.

Shares in MFS have been suspended indefinitely as it struggles to recapitalize and repay short-term debt. Its shares fell by 70% on January 18 after the fund raising announcement. CVC Asia Pacific and Pacific Equity Partners Banking are believed to be frontrunners in the talks for the acquisition of Stella.

Stella operates travel agencies including HarveyWorld Travel in Australia and Global Travel in the UK and runs luxury resorts including Peppers and the Saville hotel group.

MFS has $220 million in short-term debt maturing by the end of March, out of a total group debt of $1.687 billion. The firm sold Domain Aged Care Group to raise cash.It said it estimated the profit on the sale to be about $43.5 million, and completion of the sale would see loans worth about $50 million repaid by Domain Aged Care to associated entities of MFS.

Production Resumptions

Rio Tinto Group today announced the resumption of full production at two of its coalmines in Australia''s Queensland State, which had been hit by floods.

The company said a third would reach full capacity within a week after being halted by floods. The company told reporters by e-mail that production reached normal levels at the Hail Creek and Blair Athol coalmines late last week.

The company said it expects Kestrel, the worst affected, to resume production soon. BHP Billiton Mitsubishi Alliance, Macarthur Coal Ltd, Ensham Resources Pty and Wesfarmers Ltd have all declared force majeure on coal shipments from mines in central Queensland.

Rio Tinto Coal Australia Chief Operating Officer Darren Yeates said their other mine Hail Creek experienced only small stoppages through the rains.

Coppermoly IPO

Copper and gold explorer Coppermoly Ltd made its debut on the Australian stock exchange today at a 24% discount to its offer price following its $8 million float.

The company issued 34 million shares at 25 cents each. It explores for copper, gold and molybdenum in Papua New Guinea (PNG) and has two exploration tenements, Simuku and Nakru, on the island of New Britain in PNG.

Its shares began trading at 14 cents today and fell as low as 12 cents in intraday trade before closing at 13 cents. The company said it had completed two drill holes intended to extend the known molybdenum mineralization at its Simuku project.

Centro Group Speculations

Southeast Asia''s biggest developer, CapitaLand Ltd today denied reports that it has an interest in buying Centro Properties Group''s assets. The company was reported to be keen on buying Centro Australia Wholesale Fund valued at $2 billion ($1.8 billion).
The company which owns properties in Australia through its Australand Property Group unit said it will be ``selective'''' on new developments in that market because of growing competition.

Centro Properties Group, owner of more than 700 U.S. malls, has lost more than $4 billion of its market value since December 17 when it disclosed that it was struggling to refinance debt.

Speculation over new bid by BHP for Rio pushed Rio Tinto Ltd shares up 7.6% today.

Rio Tinto Expands Smelting Capacity

Rio Tinto Alcan today announced a 101.5 million ($90 million) investment in the modernization of its Lochaber aluminum production plant in Scotland.



The modernization project, which involves the installation of new hydroelectric turbo-generators to power the smelter, is scheduled to begin next year and should be completed by 2012.

Once approved, the modernisation of Rio Tinto Alcan''s Kitimat smelter would increase Rio Tinto''s annual global primary aluminium production capacity by more than three per cent. This will make Kitimat located in British Columbia not only one of Rio Tinto''s largest wholly-owned smelters, but also one of the three largest in North America. Kitimat''s aluminium production capacity would increase by 125,000 tonnes using clean and renewable hydroelectric power from the Rio Tinto Alcan-owned Kemano power station.

Jacynthe Cote said 36% of the company''s smelter energy needs were met by self-generated hydroelectricity. The existing hydro generators at the Lochaber aluminum plant have been in use since their installation in 1929.

Aluminum production at Lochaber was expected to increase from 43,000 tons per year to 50,000 tons per year as a result of increased power generation.

Earnings News

Australia''s second-biggest power and gas retailer, Origin Energy Ltd today announced that its second-quarter oil and gas sales rose to $125.9 million ($112 million).

In a statement to the stock exchange, the company said its volumes were little changed at the equivalent of 23.4 petajoules in the three months ended December 31.

Minor Accommodation Services Company, Mac Services today announced that it had achieved profits above its forecast prospectus due to the boom in the resources industry.

The company reported a 65.5% increase in net profit to $9.03 million for the six months ended December 2007. It also announced a 3.5 cents a share interim dividend payable on April 14.

Company secretary Stephen Law said MAC was on track to beat its initial public offer forecast of a full-year profit of $16.2 million.

Law said the company expected to have 4,000 more rooms on its books by June 30 installed in the Bowen Basin and at Kambalda on the eastern goldfields of Western Australia.

The company also has taken up an offer to lease 20 hectares at Karratha in northern Western Australia, adding 1,400 rooms. The first stage of that development is for 500 rooms valued at $25 million. It listed in April 2007.

Australian Dollar

At the close the dollar was trading at US$0.8877/83, down marginally from yesterday''s close of US$0.8880/84. During trade the dollar traded between a low of US$0.8872 and a high of US$0.8894.

Gainers and Losers

Of the ASX 200 index shares, Emeco Holdings led the gainers with a rise of 12% followed by increases in Rio Tinto Limited of 7.6%, in Babcock & Brown of 5.2%, in Minara Resources of 4.9%, and in Austar United of 4.6%.

Of the ASX 200 index stocks, AED Oil Limited led the decliners with a fall of 8.9% followed by losses in Axa Asia Pacific of 6.3%, in Babcock & Brown of 6%, in Billabong Intl of 5.1% and in Babcock & Brown of 4.9%.