Sydney: Newcrest, Leighton Net Up

Darlington Musarurwa
12 Feb, 2010
New York City

Australian stocks barely closed higher after weakness in the commodities prices in the late trading. Newcrest Mining first half net increased 14% from a year ago on 9% higher price of gold. Leighton Holdings first half profit soared 160%.

[R]3:00 AM New York, 7:00 PM Sydney – Australian stocks barely closed higher after weakness in the commodities prices in the late trading. Newcrest Mining first half net increased 14% from a year ago on 9% higher price of gold. Leighton Holdings first half profit soared 160%.[/R]

Australian market averages barely closed higher after it lost its early momentum. Commodities were mixed after China increased bank reserve requirements.

Commodity stocks were mixed as gold prices rose 1.7% to $1,095 per ounce and crude oil prices decreased 0.3% to $75 per barrel.

In Sydney trading ASX 200 Index increased 0.2% or 7.8 to 4,562.10.

Of the ASX 200 index stocks, 107 advanced, 79 declined, and 14 were unchanged. Atlas Iron led gainers in the index shares with a rise of 8.9% followed by Emeco Holdings soaring 8.2%.

The Australian dollar fell 0.01% to 89.00 U.S. cents.

Ramelius Resources to Accept Avoca Bid

Ramelius Resources Ltd reported today that its board has decided to accept Avoca Resources offer for its 37.5% holding in Dioro Exploration.

Ramelius noted that it opted to accept the offer because of the “risks associated with a minority holding in Dioro; including the significant risk that it may not receive cash flows from Dioro’s assets and the high probability that Dioro’s share price will fall after the close of the Avoca offer.”

According to the company, the A$22.3 million in sale proceeds will be deployed in investments in which the company can exercise control.

After settlement, Ramelius expects to hold A$46 million in cash and 11.16 million Avoca
shares.

Newcrest Mining Profit Rises 14%

Newcrest Mining Ltd said first half profit to December 31 increased 14% to A$176 million from A$154 million in the same period a year ago.

Underlying profit increased 10% to A$267 million from A$242 million a year ago and sales revenues declined 8% to A$1.2 billion from A$1.3 billion. Production increased 15% and cost of sales declined 18%.

In the period, Newcrest received average price of A$1,170 an ounce of gold, 9% higher than a year ago.

The gold miner controls 260,000 metric tons of reserves at its O’Callaghans tunsgsten site which has attracted investment interests from North America, Japan and China.

The company is expected to finalize A$2 billion expansion at its Cadia Valley operation.

Leighton Profit Soars 160% to A$289

Leighton Holdings reported that the country’s profit after tax in the six months to December 31 edged up 160% to A$289 million from A$111 million a year earlier.

Profits increased despite the negative impact of a rising Australian dollar.

Chief executive officer Wal King said profits were driven by positive contributions from infrastructure construction in Australia, contract mining in Australia and Indonesia and construction in Hong Kong.

Total revenue fell 1% to A$9 billion from A$9.1 billion a year ago due to currency movements.

Revenues were generated from infrastructure A$5.2 billion, resources A$2.6 billion and property A$1.2 billion.

King projects that full year profit in excess of A$600 million and revenue of around A$19 billion.

ASX Movers

Gunns Limited Limited led the decliners in the S&P ASX 200 index with a loss of 6.0% followed by losses in Macquarie Office Trust of 5.0%, in iSOFT Group Limited of 4.6%, in GWA International Limited 4.3% and in James Hardie Industries N.V 3.5%.

Atlas Iron Limited led gainers in the S&P ASX 200 index with a rise of 8.8% followed by gains in Emeco Holdings Limited 8.2%, in Australian Agricultural Company Limited of 8.0% and in Ten Network Holdings Limited of 5.5%.

Other Movers

Arrow Energy Limited advanced 3.1% to A$3.65 and the energy explorer will fully acquire the Fisherman Landing coal seam gas export project from partner Liquefied Natural Gas Ltd for an upfront payment of A$51 million.

Macquarie Group Limited fell 0.8% to A$47.35 after the Charter Hall Group announced that it has agreed to acquire the majority of Macquarie Group Limited’s core real estate management platform.

Origin Energy Limited the operation of energy businesses rose 0.9% to A$16.40.

Rio Tinto Limited increased 3.1% to A$71.94 after the iron-ore producer said a day ago reported better than expected earnings.

Santos Limited the oil and gas explorer advanced 0.7% to A$13.35.