Australia Capex Rises, Lend Lease Net Drops 27%

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

Australian stock indexes rose fractionally after capital expenditure advanced more-than-forecasted in the three months to December. Energy stocks also increased as crude oil prices increased to $42 a barrel. Lend Lease operating profit in the six months ended December dropped 27%.

[R]3:00AM New York, 7:00PM Sydney - Capital expenditure in Australia increased 6% in the three months to December.[/R]

Australian stock indexes rose fractionally after capital expenditure advanced more-than-forecasted in the three months to December.

Energy stocks also increased as crude oil prices increased to $42 a barrel.

Market Sentiment

In Sydney trading ASX 200 index rose 0.5% or 18 to 3,345.50.

Of the ASX 200 index stocks, 108 rose, 75 declined, and 17 were unchanged. Emeco Holdings led advancers in the index shares with a rise of 21.7% followed by ING Office rising 15.2%.

Capital Expenditure Rises 6% in December Quarter

Australian Bureau of Statistics reported today that total new capital expenditure rose 6% to A$24.9 billion in seasonally adjusted terms in the three months to December from the previous quarter.

Capital expenditure also increased 17.8% from a year ago.

Investment in buildings and structures advanced 11.5% in the December quarter from the previous three months and rose 24.2% to A$11.9 billion from a year ago, while investment in equipment, plant and machinery gained 1% to A$31.1 billion in the fourth quarter from a quarter earlier in seasonally adjusted terms.

The statistics bureau estimates capital expenditure to increase 14.3% to A$98.1 billion in the 2009 and increase 0.6% to A$79.9 billion in 2010.

Lend Lease Operating Profit Drops 27% to A$185.4 million

Lend Lease reported today that its operating profit in the six months ended December 31 dropped 27% to A$185.4 million from the same period a year earlier.

The statutory loss in the period was A$596.4 million on goodwill impairments of A$252.9 million as economic and market conditions worsened.

Lend Lease declared an interim dividend of 25 Australian cents per share, representing a payout ratio of 61% of net operating profit after tax for the half year.

The company maintained its forecast for net operating profit after tax for fiscal 2009 between A$380 million and A$400 million, which is 10% to 15% lower than in the period a year ago.

Separately, Lend Lease announced a management restructure through which managing director Greg Clarke will step down today. Chief executive officer Steve McCann will take over as managing director and become a member of the Lend Lease board.

In addition, the company announced that following on from the A$302.5 million institutional placement it has “decided not to proceed with the share purchase plan due to the current market value of its securities remaining below the A$6.05 institutional placement price and a deterioration in equity market conditions.”

Gainers & Losers

Emeco Holdings led advancers in the ASX 200 index shares with a rise of 21.7% followed by gains in ING Office of 15.2%, in PanAust Ltd. of 13.3%, in Toll Holdings of 13.3% and OZ Minerals of 13.1%.

Energy stocks gained as crude oil prices jumped 6% to $42.50 per barrel. Beach Petroleum climbed 7.7% and Oil Search advanced 5.7%.

Hastings Diversified Utilities Fund led decliners in the ASX 200 index shares with a decline of 15.3% followed by losses in Fortescue Metals of 9.5%, in AWB Ltd. of 9%, in Macquarie Office of 8.3%, and Macarthur Coal of 8.2%.