Rio Tinto Profit Estimate Cut 40%

123jump.com Staff
16 Jan, 2009
New York City

Australian stocks failed to rebound after a sharp fall on weak employment data a day ago. Rio Tinto profit estimate was cut by 40% on lower prices and production volume. Woodside Natural Gas suspended off-shore LNG terminal project in Los Angeles.

[R]3:00AM New York, 7:00PM Sydney - Rio Tinto''s profit estimate for 2009 slashed by 40%. Woodside Natural Gas suspends OceanWay project.[/R]

In Sydney trading ASX 200 index gained 0.6% or 21.46 to 3,550.90.

Of the ASX 200 index stocks, 113 gained, 69 dropped, and 18 were unchanged. HFA Holdings led gainers in the index shares with a rise of 8.7% followed by Babcock & Brown increasing 8.2%.

Rio Tinto Profit Estimate Cut by 40%

JP Morgan Chase yesterday slashed its 2009 profit estimate for Rio Tinto by 40% on falling metal prices and plummeting production.

Underlying earnings for the miner are estimated to drop to $4.3 billion in the year ending December 31, 2009 from the earlier projection of $7.2 billion.

Rio will report its full-year 2008 results on February 12 and analysts are estimating profit of at least $5.7 billion.

Woodside Natural Gas Suspends OceanWay Project

Woodside Natural Gas reported today that it will suspend work on its proposed natural gas project for the Los Angeles region on an intensification of the global economic recession.

The planned OceanWay project design included an offshore ship and buoy system to supply natural gas by ship far removed from population centers and shipping lanes.

The project was being publicly reviewed in a comprehensive environmental and safety review process that started when Woodside Natural Gas applied to the US Coast Guard for a Deepwater Port license and to the City of Los Angeles for a pipeline franchise in 2006.

Woodside Natural Gas President Steve Larson said, “We still believe in the long term value of liquefied natural gas as a new source of clean, reliable, and secure energy for Los Angeles.”

Gainers & Losers

HFA Holdings led gainers in the ASX 200 index shares with a rise of 8.7% followed by increases in Babcock & Brown of 8.2%, in Linc Energy of 8%, in Pacific Brands of 7.4%, and Mirvac Group of 6.7%.

Energy stocks rose as crude oil prices gained $0.14 to $35.50 per barrel.

Lynas Corp. led decliners in the ASX 200 index shares with a fall of 11.9% followed by losses in Centro Retail Group of 11.8%, in Transpacific Industries of 8.7%, in Abacus Property of 8.5%, and Emeco Holdings of 8.3%.

Commodity prices fell as gold prices shed $1.50 to $807.3 per ounce. Gindalbie Metals fell 5.2%, Karoon Gas Australia lost 5% and Minara Resources declined 4.5%.

Company News

Centro Retail Group Completes Refinancing and Debt Stabilisation Agreement

Centro Retail Group reported today that it has completed a long-term refinancing agreement with its financiers.

According to the revised terms of the agreement, the A$4.95 billion senior debt owed to the Australian lending group and the U.S. private placement note holders will continue but on amended terms comprising A$3.9 billion of term debt loans and A$1.05 billion of Hybrid Securities.

The term loans will mature on December 15, 2011.

Also Centro stapled securities equivalent to 14.8% of existing issued securities have been issued to the Australian lenders and US private placement note holders on a pro rata basis as follows in part payment of accrued lender fees and expenses.

However, the Australian lending group and U.S. private placement note holders have agreed not to sell the new securities until 15 December 2011.

Centro CEO Glenn Rufrano said, “The three year debt stabilisation agreement achieves our objective of securing the long term viability of the Group, and will have the effect of maximising cash flow through the re-structuring of our debt arrangements and minimising asset sale requirements.”