Australian Stocks Down; AWB Surges 9%

Darlington Musarurwa
15 Feb, 2010
New York City

Australian stocks followed the declines in commodities prices. BHP Billiton indicates higher prices for iron ore. BlueScope Steel realizes A$28 million loss in H1. Bendigo and Adelaide Bank profit doubles to A$104 million. AWB Ltd surges on a conditional class action lawsuit settlement.

[R]3:00 AM New York, 7:00 PM Sydney – Australian stocks followed the declines in commodities prices. BHP Billiton indicates higher prices for iron ore. BlueScope Steel realizes A$28 million loss in H1. Bendigo and Adelaide Bank profit doubles to A$104 million.[/R]

Australian stocks fell 0.4% led by commodity stocks as gold prices decreased 0.4% to $1,090 per ounce.

AWB Ltd surged after it agreed to a conditional settlement of a class action from the Iraq kickbacks scandal for A$39.5 million.

In Sydney trading ASX 200 Index declined 0.2% or 16.6 to 4,545.80.

Of the ASX 200 index stocks, 61 rose, 121 fell, and 18 were unchanged. AWB Ltd. led gainers in the index shares with a rise of 9.1% after settling a class action suit against it for A$39.5 million.

The Australian dollar increased 0.2% to 80.02 yen after Japan reported economic expansion in the quarter to December of 4.6% annualized rate. The dollar traded at 88.77 U.S. cents.

Personal Finance Commitments Rise 0.2% in Dec

Australian Bureau of Statistics reported today that the total value of owner occupied housing commitments, excluding alterations and additions, fell 4.7% to A$15.5 billion in December from the previous month.

Personal finance commitments increased 0.2% to A$7 billion from November, as revolving credit commitments advanced 2.2% and fixed lending commitments fell 2.1%.

The ABS noted that the value of total commercial finance commitments was flat at A$26.7 billion from a month earlier, with revolving credit commitments increasing 3.8% and fixed lending commitments dropping 1.3%.

Lease finance commitments soared 8.7% to A$409 million.

BlueScope Steel Records A$28 million Loss

BlueScope Steel said today that it realized a net loss after tax of A$28 million for the first half for year 2010.

The company “expects a small profit for the full year”, after rebounding to A$33 million profit in the December quarter.

Domestic demand soared 51% in the first half compared to the previous six month. Non-residential construction sales remained soft.

Export demand, particularly for customers in Asia improved in the review period.

In Asia, profitability improved to A$50 million EBIT in the first half.

BlueScope managing director and chief executive officer Paul O’Malley said, “We currently see supply and demand in balance in China, however we can expect some volatility. The key to future overall Chinese growth will be to achieve higher domestic consumer demand.”

Bendigo and Adelaide Bank Profit Jumps to A$134.2 million

Bendigo and Adelaide Bank announced today that its profit after tax before significant items rose 23.2% to A$134.2 million in the six months ended December 31 from a year ago.

Net income rose to A$104.1 million from A$50.6 million in the same period a year earlier, while net interest income advanced 25% to A$408 million.

Net interest margin rebounded to 2.09%.

According to the lender, real growth of non-performing loans was minimal, with gross impaired loans as a percentage of total assets rising 0.01% to 0.50%.

ASX Movers

Energy World Corporation Limited led the decliners in the S&P ASX 200 index with a loss of 6.9% followed by losses in Macarthur Coal Limited of 5.0%, in Crane Group Limited of 4.9%, in West Australian Newspapers Holdings Limited 4.4% and in Healthscope Limited 4.3%.

AWB Limited led gainers in the S&P ASX 200 index with a rise of 9.0% followed by gains in Hills Industries Limited 3.4%, in Bendigo and Adelaide Bank Limited of 3.0% and in CSL Limited of 2.8%.

Other Movers

AWB Limited surged 9.0% to A$1.08 after the country agreed to a conditional settlement for a class action suit subject to Federal Court approval.

Former shareholders and retired farmers filed the class action against AWB in April 2007 claiming over $100 million in losses following the 2006 Cole inquiry, which investigated the company’s payment of more than A$290 million to Saddam Hussein regime between 1999 and 2003.

BHP Biliton Ltd decreased 0.7% to A$40.55 after its chief executive Marius Kloppers said in an interview on ABC, “benchmark price index today is almost double the last year’s benchmark.” He was referring to the potential price increase for iron ore to Chinese mills that may range between 33% and 40%.

Bendigo and Adelaide Bank Limited added 3.0% to A$10.20 after the bank said first-half net interest income rose 25% to A$408 million from A$326.1 million a year ago. Net profit for the first-half rose 105.7% to A$104.1 million or 27.7 cents per diluted share compared to net profit of A$50.6 million or 16.2 cents per share a year ago.

BlueScope Steel Limited decreased 3.1% to A$2.48 after the steelmaker said first-half revenues fell 33% to A$4.1 billion from A$6.16 billion a year ago. Net loss for the first-half was A$28.0 million or 1.6 cents per diluted share compared to net profit of A$407 million or 43.5 cents per share a year ago.

Healthscope Limited dropped 4.3% to A$4.43 after the health care provider said first-half revenues rose 9.4% to A$905 million from A$827.2 million a year ago. Net profit for the first-half rose 17.4% to A$45.1 million or 16.4 cents per diluted share compared to net profit of A$38.4 million or 15.6 cents per share a year ago.

West Australian Newspapers Holdings Limited dropped 4.4% to A$7.17 after the publisher said first-half revenues fell 9.7% to A$205.1 million from A$227.3 million a year ago. Net profit for the first-half fell 15.4% to A$49.5 million compared to net profit of A$58.5 million a year ago.