NAB Earnings Drage Sydney Index

Darlington Musarurwa
19 Feb, 2010
New York City

Fortescue Metals profit falls 94% in the first half. National Australia Bank first quarter earnings increase 20%. Billabong International first half profit decreases 15% on lower sales in North America and weak currency translations.

[R]3:00 AM New York, 7:00 PM Sydney- Fortescue Metals profit falls 94% in the first half. National Australia Bank first quarter earnings increase 20%. Billabong International first half profit decreases 15% on lower sales in North America and weak currency translations.[/R]

The Australia stock index fell 0.4% after a spate of negative corporate earnings spooked investors.

National Australia Bank declined after it released first quarter profit of A$1.1 billion, below Westpac’s comparative earnings of A$1.6 billion and market expectations.

Commodities and resource stocks declined after gold fell 0.1% to $1,119 per ounce and crude oil prices slipped 1.3% to $78 per barrel.

In Sydney trading ASX 200 Index fell 0.4% or 19.66 to 4,635.

Of the ASX 200 index stocks, 70 rose, 117 fell, and 13 were unchanged. Biota Holdings led gainers in the index shares with a rise of 6.8% followed by Ansell Ltd. advancing 4.7%.

Fortescue Metals Profit Falls 94% in H1

Fortescue Metals Group net in the first half ended December dropped 94% to A$43 million from a restated profit of A$760 million a year earlier.

Profit was dragged by a negative adjustment of A$55 million on the revaluation of the Leucadia loan note. Revenue rose 17% to A$1.2 billion in the first half from restated revenue of A$1.01 billion a year ago.

EBITDA decreased to A$426 million in the period from A$479 million in the comparable year ago period.

The iron ore miner plans to expand output to annualized rate of 92 million tons a year by April 2013, lower from the earlier guidance of an annualized rate of 95 million tons a year from February 2012.

According to executive director Graeme Rowley, Fortescue''s mine, port and rail operations are currently running at an annualised rate of 42 million tons a year and it targets to reach a rate of 55 million tons by the end of 2010.

National Australia Bank Profit Rises 20%

National Australia Bank reported today that unaudited cash earnings for the first quarter rose 20% to A$1.1 billion on the earnings contribution of A$33 million from recent acquisitions.

The charge for bad and doubtful debts in December quarter fell to A$202 million from A$739 million in the September quarter.

NAB said that while business credit continues to show signs of improvement, the potential impact on customers of the strong Australian dollar and rising interest rates is uncertain.

Revenue in Personal Banking division fell because of continuing pressure on net interest income from higher wholesale funding costs and intense competition for deposits.

NAB is still pursuing the acquisition of AXA Asia Pacific and is close to completing its due diligence.

Billabong H1 Profit Declines 15%

Billabong International first half profit decreased 15% to A$69.7 million from A$82.4 million a year ago on a strong Australian dollar and weak sales in its North American markets and Australasia.

The group had forecasted profit to rise to $74.7 million.

Revenues from continued operations fell to A$723.6 million from A$811 million in the comparable year ago period.

Billabong maintained that full year net profit to rise 5% in constant currency terms, excluding last year’s impairment charge, or 10% including the charge.

ASX Movers

Boart Longyear Limited led the decliners in the S&P ASX 200 index with a loss of 7.2% followed by losses in Panoramic Resources Limited of 6.1%, in Mirabela Nickel Ltd of 5.6%, in Lynas Corporation Limited 4.7% and in Ardent Leisure Group 4.4%.

Biota Holdings Limited led gainers in the S&P ASX 200 index with a rise of 6.8% followed by gains in Ansell Limited 4.7%, in iSOFT Group Limited of 4.6% and in PanAust Limited of 4.2%.

Other Movers

Ardent Leisure Group dropped 4.4% to A$1.49 after the trust that invests in Australian leisure and entertainment properties was downgraded to “hold” from “buy” at Deutsche Bank AG.

Billabong International Limited decreased 1.6% to A$10.47 after the surf wear retailer said first-half revenues fell 11% to A$723.6 million from A$811.0 million a year ago. Net profit for the first-half fell 15% to A$69.7 million or 27.6 cents per diluted share compared to net profit of A$82.4 million or 37.8 cents per share a year ago.

Centennial Coal Company Limited rose 0.7% to A$3.82 after the miner said first-half revenues fell 13% to A$381.9 million from A$439.2 million a year ago. Net profit for the first-half fell 27% to A$31.1 million or 8.0 cents per diluted share compared to net profit of A$42.7 million or 11.4 cents per share a year ago.

Fortescue Metals Group Ltd fell 1.4% to A$4.89 after the producer of iron ore said first-half revenues rose 17.8% to $1.19 billion from $1.01 billion a year ago. Net profit for the first-half fell 94% to $43 million or 94 cents per diluted share compared to net profit of $760 million or 26.94 cents per share a year ago.

Foster’s Group Limited fell 2.6% to A$5.50 after the beer and winemaker was downgraded to “underweight” from “neutral” at JPMorgan.

Lihir Gold Limited dropped 2.5% to A$2.72 after the gold mining company was downgraded to “sector perform” from “outperform” at RBC Capital.