Australian Stocks Up; James Hardie Loss

Darlington Musarurwa
23 Nov, 2009
New York City

Stocks in Australia gained after commodities prices and gold edged higher. James Hardie Industries swung to a quarterly loss but projected higher than expected annual profit. Qantas plans to spend A$4.4 billion on new aircraft.

[R]3:00 AM New York, 7:00 PM Sydney – Stocks in Australia gained after commodities prices and gold edged higher. James Hardie Industries swung to a quarterly loss but projected higher than expected annual profit. Qantas plans to spend A$4.4 billion on new aircraft.[/R]

Australian stocks rose on rising commodity prices as gold prices rose 0.6% to $1,148 per ounce.

In Sydney trading ASX 200 Index rose 0.7% or 31.2 to 4,717.00.

Of the ASX 200 index stocks, 127 gained, 55 dropped, and 18 were unchanged. Lynas Corp. led gainers in the index shares with a rise of 10.1% followed by Avoca Resources climbing 9.1%.

Qantas to Spend A$4.4 billion on New Aircraft

Qantas Airways Ltd said today at an investor presentation that the airline will spend A$1.7 billion in fiscal 2010 financial year and A$2.7 billion in fiscal 2011.

Qantas will buy 43 planes, including eight Airbus SAS A380s.

The global travel slowdown has hurt the air travel industry and the Australia based airline is going through restructuring to save A$1.5 billion in costs within three years.

New Zealand Consumer Confidence Falls in November

ANZ-Roy Morgan Consumer Confidence index dropped 4.4 points to 121.5 in November.

However, the rate remains above 100, which indicates expansion.

According to the report, outlook over the next five years, declined 11.3 points, but a net 46% expect to be better off over the coming five years.

Expectations about economic conditions over the coming 12 months fell 3 points, while perceptions whether now is a good time to buy a major household item also fell by the same margin.

“While the economy may have emerged from recession and house prices are up over 9% from their January lows, more people are still feeling worse off financially compared to a year ago,” said the report.

James Hardie Records Q2 Loss

James Hardie reported that including asbestos, ASIC expenses and tax adjustments, net operating profit fell to a loss of $97.5 million from a profit of $154.9 million.

Profits were dragged by unfavorable asbestos adjustments of $62.7 million for the quarter and $182.5 million for in the first half on the rising dollar.

Total sales in the second quarter dropped 11% to $304.2 million as volumes in the U.S. and Europe Fibre Cement declined 17% and Asia pacific Fibre Cement net sales plunged 5%.

The company projects that profit in the year ending March 2010 will be between $77 million and $115 million.

Gainers & Losers

Lynas Corp. led gainers in the ASX 200 index shares with a rise of 10.1% followed by increases in Avoca Resources of 9.1%, in Aquarius Platinum of 7.8%, in Platinum Australia of 7.3%, and James Hardie-CDI of 6.4%.

Other resources stocks increased as gold prices soared 0.6% to $1,148 per ounce. Iluka Resoruces advanced 5% to A$3.57, Macarthur Coal edged up 4.2% to A$9.60 and Murchison Metals rose 3.6% to A$1.73.

Sundance Resources led decliners in the ASX 200 index shares with a decline of 6.3% followed by losses in Sims Metal Management of 4.1%, in Macquarie Office of 3.3%, in Carnarvon Petrol of 2.7%, and Paperlinx Ltd. of 2.7%.

Other Movers

Aquarius Platinum Limited the mine development increased 7.8% to A$6.58 and Avoca Resources Limited the gold miner rose 9.1% to A$2.15. Platinum Australia Limited rose 7.2% to A$1.03.

Carnarvon Petroleum Limited slipped 2.7% to A$0.54.

James Hardie Industries N.V added 6.3% to A$7.87 after the building materials producer said second quarter sales fell 11% to $304.2 million from $341.9 million a year ago. Net loss for the quarter was $19.6 million or $0.05 per diluted share compared to net profit of $153.5 million or $0.35 per share a year ago.

Lynas Corporation Limited the explorer and developer of rare earths deposits and exploration for other mineral resources surged 10.0% to A$0.60.

Macquarie Office Trust dropped 3.3% to A$0.29.

National Australia Bank Limited decreased 1.0% to A$28.40.

PaperlinX Limited fell 2.7% to A$0.54.

Sims Metal Management Limited fell 4.1% to A$21.29 has acquired the remaining ownership interest of its joint venture Port Albany Ventures LLC.

Sundance Resources Limited declined 6.2% to A$0.15 after the iron ore explorer said that subscription proceeds of A$47 million have been received in relation to the first tranche of placement shares for its private placement of A$85 million announced on November 6, 2009.