Australian Wages Rise; Pacific Brands Drop

123jump.com Staff
25 Feb, 2009
New York City

Australian wages unexpectedly rose 1.2% in the fourth quarter from the previous quarter and rose more than 4% from a year ago period. Stocks declined on weak earnings from Pacific Brands and Seven Network. Pacific Brand also announced plans to cut 1,850 jobs in the next eighteen months.

[R]3:00AM New York, 7:00PM Sydney - Australian wage growth unexpectedly rises 1.2% in the fourth quarter. Pacific Brands to shed 1,850 jobs.[/R]

Australian stock indexes dropped 0.1% dragged by weak earnings from Pacific Brands which announced today that it will cut 1,850 jobs, including 1,200 in manufacturing.

Energy stocks trimmed losses as crude oil prices rose to $40 per barrel on optimism the U.S. economy will rebound in 2010.

In Sydney trading ASX 200 index fell 0.1% or 4.1 to 3,327.50.

Of the ASX 200 index stocks, 90 rose, 98 declined, and 12 were unchanged. Seek Ltd. led advancers in the index shares with a rise of 19% followed by Roc Oil increasing 12.1% as crude oil prices increased 4% to $40 per barrel.

Australian Wage Growth Rises 1.2%

Australian Bureau of Statistics reported today that the wage price index indicate that the total hourly rates of pay excluding bonuses rose 1.2% in the three months to December from the previous quarter and advanced 4.3% from a year ago.

In the private sector, the index gained 1.2% from a quarter earlier and 4.3% from the same period a year ago, while wages in public sector rose 1.4% in the three months to December from the September quarter.

The wage index increases at industries ranged from 0.7% in education to 1.9% in utilities sector.

However, original indexes through the year to December 2008 at the industry level ranged from 2.8% for accommodation, cafes and restaurants to 6.1% for mining.

Pacific Brands to Shed 1,850 Jobs

Pacific Brands reported today in the interim results that the company will shed 1,850 jobs in Australia over an 18-month period, including 1,200 in manufacturing as part of a restructuring.

The company announced that net profit after tax before amortization and significant items rose 0.1% to A$57.6 million in the period as sales dropped 2.9% to A$1 billion.

Pacific Brands chief executive officer Sue Morphet said the company has agreed with its lenders for an extension of its scheduled debt maturity to August 2010, and has also written down the carrying value of assets by a total value of A$206.4 million.

As part of the 2010 restructuring program, the company will close the majority of Australian clothing manufacturing operations, discontinue small labels and brands and divest non-core businesses to save A$150 million a year by 2011.

Gainers & Losers

Seek Ltd. led advancers in the ASX 200 index shares with a rise of 19% followed by increases in Roc Oil of 12.1%, in Macquarie Countrywide of 10%, in Mirvac Group of 9.8%, and WorleyParsons of 9.6%.

Roc Oil and other energy stocks rose as crude oil prices advanced 4% to $40 per barrel. Riversdale Mining 6.9% and Panoramic Resources edged up 6%.

Pacific Brands led decliners in the ASX 200 index shares with decline of 37.1% followed by losses in Tishman Speyer of 37.1%, in Goodman Fielder of 18.6%, in Goodman Group of 18.3%, and Flight Centre of 15.9%.

Seven Network Profit Declines 84%

Seven Network reported today that its first half profit in the 26 weeks period ended December 27 fell 84% to A$20 million from A$126.3 million from a year ago after writing down the value of its stake in Seven Media Group by A$793.9 million to zero and the value of its 22.3% stake in West Australian Newspapers Holdings.

The company also wrote down A$120.2 million on other investments.