Sydney: BHP Sales Decline; CBA Earnings Rise

Darlington Musarurwa
10 Feb, 2010
New York City

BHP sales first sales declined 17.5% but the net surged to $6.1 billion from a year ago period. Australia

[R]3:00 AM New York, 7:00 PM Sydney – BHP sales first sales declined 17.5% but the net surged to $6.1 billion from a year ago period. Australia’s consumer confidence drops 2.6% in February and housing finance declines 2.8% to A$21.9 billion in December. Commonwealth Bank of Australia estimated fewer bad loans and growing demand for loans.[/R]

Australia stocks rose fractionally leveraged by profits by BHP Billiton and Commonwealth Bank of Australia.

BHP profits in the first six months of fiscal year rose more than forecasted. The previous year period booked a write-down on the failed Ravensthorpe nickel project.

Commonwealth Bank of Australia also reported that profits in the six months to December 31 were ahead of market expectations.

However, gains were trimmed by a private report showing consumer confidence surprisingly plummeted in February from a month earlier, while a government report showed that housing finance declined in December.

In Sydney trading ASX 200 Index rose 0.2% or 8.3 to 4,513.40.

Of the ASX 200 index stocks, 132 gained, 58 fell, and 10 were unchanged. Karoon Gas Australia led gainers in the index shares with a rise of 12.1% followed by SMS Management & Technology increasing 8.9%.

The Australian dollar fell 0.4% to 87.52 U.S. cents.

Australia’s Consumer Confidence Falls 2.6% in Feb

Westpac–Melbourne Institute Consumer Sentiment Index dropped by 2.6% to 117 in February from 120.1 the previous month.

The index is however 2.9% above the December reading; 3.2% above the reading six months ago and 15.2% above the long term average.

Westapac’s chief economist Bill Evans notes that the survey indicated that 93% of the consumers expect interest rates to risen over the next 12 months and 60% expect an increase of more than 1%.

Consumers are unnerved by falling U.S. stocks, rising sovereign risk concerns in Europe and China’s moves to slow economic growth.

Australia’s Share Price Index has fallen by around 8%, while the Australian dollar has decreased 6.5%.

According to the report, responses to “Family finances compared to a year ago” fell by 5.4% and the next twelve month outlook for finances deteriorated by 4.6%.

Expectations for “Economic conditions over the next 12 months” declined by 0.8% and the five year outlook for economic conditions improved by 1.6%.

Reserve Bank of Australia is expected to increase its interest rate on March 2.

Australia’s Housing Finance Dropped 2.8% in Dec

Australia’s Bureau of Statistics reported today that the total value of dwelling finance commitments, excluding alterations and additions, declined 2.8% to A$21.9 billion in December from the previous month.

Owner occupied housing finance declined 4.7% to A$15.5 billion and investment housing-fixed loans rose 1.9% to A$6.3 billion in the period.

The ABS also noted that the number of dwelling commitments for owner occupied housing fell 5.5% to 55,632 units, while construction of dwelling decreased 6.4% to 6,909 units.

However, the purchase of new dwellings advanced 3% to 2,521 units and the purchase of established dwellings tumbled 5.7% to 46,202 units.

BHP Net Jumps to $6.1 billion

BHP reported today that its net profit in the first half of 2009-2010 rose to $6.1 billion from $2.6 billion in the same period a year ago when it wrote-down the failed Ravensthorpe nickel project.

Analysts were looking for a net profit of $5.1 billion.

The miner’s revenue in the half-year fell 17.5% to $24.6 billion from $29.8 billion in a year ago.

The company issued an interim dividend of 42 cents a share compared with the 41cents dividend in the first half last year.

BHP said the stimulus intervention by governments have not addressed “structural issues” such as weak labor markets and excess production capacity in developed economies.

BHP chief executive Marius Kloppers today said: “We do not expect China to stop lending. However, reduced credit liquidity in key segments of the commodity market may have a flow-on impact on prices.”

CBA Profit Rises 13% to A$2.9 billion

Commonwealth Bank of Australia reported today that net income in the six months to December 31 jumped 13% to A$2.9 billion from a year ago.

Impairment costs fell 29% to A$1.38 billion in the review period

Chief executive officer Ralph Norris said he expected bad loans in the portfolio have peaked and they are expected to decline in the current year.

ASX Movers

Lynas Corporation Limited led the decliners in the S&P ASX 200 index with a loss of 5.7% followed by losses in Fleetwood Corporation Limited of 4.4%, in Virgin Blue Holdings Limited of 3.5%, in Dominion Mining Limited 3.3% and in Whitehaven Coal Limited 3.2%.

Karoon Gas Australia Ltd led gainers in the S&P ASX 200 index with a rise of 12.1% followed by gains in SMS Management & Technology Limited 8.9%, in St Barbara Limited of 8.7% and in Sundance Resources Limited of 8.3%.

Other Movers

BHP Billiton plc rose 0.08% to A$39.88 after the diversified natural resources company said first-half revenues fell 17.5% to $24.6 billion from $29.8 billion a year ago. Net profit for the first-half rose 134.6% to $6.1 billion or 109.8 cents per diluted share compared to net profit of $2.6 billion or 47.0 cents per share a year ago.

Boral Limited climbed 4.3% to A$5.72 after the seller of building materials said first-half revenues fell 10.2% to A$2.33 billion from A$2.59 billion a year ago. Net profit for the first-half fell 9% to A$68 million or 11.4 cents per diluted share compared to net profit of A$75 million or12.8 cents per share a year ago.

Commonwealth Bank of Australia declined 1.7% to A$51.83 after it reported net income in the six month period to December increased 13% to A$2.91 billion. Impairment expenses dropped 29% to A$1.38 billion from a year ago period.

Karoon Gas Australia Ltd surged 12.1% to A$6.39.

OZ Minerals Limited advanced 3.0% to A$1.01 after the mining company has flagged a full-year profit of between A$20 million and A$30 million for total continuing operations.

Rio Tinto Limited the mining company added 1.4% to A$67.94.