Australian Index Declines 1.5%; Suncorp Plunges

Darlington Musarurwa
24 Feb, 2010
New York City

Australian benchmark index declined on weak commodities prices. The Australian dollar gained 0.2%. Total construction work hours increased 2.6% in the three months to December. Suncorp-Metway dropped 6.4% after it trimmed its dividend. Woodside 2009 profit increased 2.1%.

[R]3:00 AM New York, 7:00 PM Sydney – Australian benchmark index declined on weak commodities prices. The Australian dollar gained 0.2%. Total construction work hours increased 2.6% in the three months to December. Suncorp-Metway dropped after it trimmed dividend. Woodside 2009 profit increased 2.1%.[/R]

The benchmark stock index fell 1.5% in Australia as commodity stocks decreased after U.S. consumer confidence dropped in February.

Gold prices declined 0.9% to $1,103 per ounce and crude oil prices dropped 1.8% to $78.9 per barrel.

Sentiment was also dampened by a government report showing wage growth eased in December.

In Sydney trading ASX 200 Index decreased 1.5% or 69.8 to 4,648.50.

Of the ASX 200 index stocks, 63 gained, 119 fell, and 18 were unchanged. Karoon Gas Australia increased 8.5% and Transpacific Industries gained 7.1%

The Australian dollar advanced 0.2% to 89.27 U.S. cents.

Wage Growth Eases in Dec

Australian Bureau of Statistics reported today that the country’s Wage Price Index, which measures the total hourly rates of pay excluding bonuses, increased 0.6% in the December quarter from the previous three months.

The index also climbed 3% from the comparable year ago period.

According to the ABS, indexes in all indexes at the industry level ranges from 0.2% for accommodation and food services; rental, hiring and real estate services; and professional, scientific and technical services to 1.2% for electricity, gas, water and waste services.

Total Construction Work Rises

Separately, the bureau of statistics said the seasonally adjusted estimate for total construction work done rose 2.6% to A$40 billion in the three months to December from the previous quarter.

However, total construction work advanced 3.9% from the same period a year earlier.

The estimate of building work done advanced 6.1% to A$19.3 billion in the December quarter from the previous quarter, while residential building fell 2.9% to A$10.3 billion and non-residential building rose 18.6% to A$9 billion in the same period.

In addition, engineering work done fell 0.5% to A$20.7 billion in the December quarter.

Woodside 2009 Profit Gains 2.1%

Woodside Petroleum reported today that the company’s full-year profit ended December rose 2.1% to A$1.8 billion. Underlying net profit after tax soared 4% to A$1.9 billion.

Annual sales dropped to A$4.4 billion from A$6 billion a year earlier on lower commodity prices.

Lower commodity prices shaved A$1.9 billion off revenues, while the revaluation of US denominated debt resulted in a gain of A$886 million.

Petroleum production fell 0.5% to 8.9 million barrels oil equivalent (MMboe) from 81.3 MMboe in 2008.

Woodside estimated 2010 production between 70 and 75 MMboe after divestment of its interest in the Otway Gas Project.

The company declared a dividend of 55 cents per share, resulting in a full year dividend of 110 cents per share.

Suncorp 2009 Profit Soars 41%

Suncorp said today first half profit gained 41% to A$364 million from a year ago.

First half dividend was slashed 20 cents to 15 cents.

The company, which split its business into non-core bank and core bank last year, noted net profit for general division increased 89% to A$347 million, while banking profit was A$4 million.

Core bank division, which primarily encompasses residential lending and personal banking, recorded a A$224 million pre-tax profit, while the non-core bank made a A$211million loss.

ASX Movers

Ausenco Limited led the decliners in the S&P ASX 200 index with a loss of 8.7% followed by losses in Suncorp-Metway Ltd of 6.4%, in Paladin Energy Ltd of 5.8%, in Gunns Limited 5.3% and in Dominion Mining Limited 4.5%.

Karoon Gas Australia Ltd led gainers in the S&P ASX 200 index with a rise of 8.4% followed by gains in Transpacific Industries Group Ltd 7.1%, in St Barbara Limited of 6.8% and in Medusa Mining Limited of 5.1%.

Other Movers

Asciano Group the port and rail operator rose 4.5% to A$1.85.

Ausenco Limited declined 8.7% to A$3.95 after the engineering company declares final dividend.

BHP Billiton plc decreased 2.9% to A$40.88 after the mining company announced that Don Argus will retire as Chairman and a Non Executive Director on March 30. As previously announced, Non Executive Director, Jac Nasser, will succeed as Chairman of BHP Billiton.

Rio Tinto Limited dropped 3.2% to A$70.40.

Suncorp-Metway Ltd declined 6.4% to A$8.62 after the lender and insurer announced the interim dividend decreased to A$0.15 per share representing a dividend payout ratio of 52.0% compared to 77.9% in the prior period and a convertible preference dividend of A$1.3037 per share, which are payable on March 14.

Woodside Petroleum Ltd fell 2.4% to A$43.32 after the oil and gas producer reported slightly better than estimated profit.