The Border Watch : January 27th 2014
Business Ian McLeod ex-Coles boss off to Bi-Lo Sydney: The man credited with masterminding the turnaround of Coles is off to the US to head up retail giant Bi-Lo. Ian McLeod has resigned from his senior executive role at Coles’ parent company Wesfarmers and will take up his new position in the US in March. McLeod helped drive the turnaround of British chain Asda before being brought in by Wesfarmers after it took control of thenstruggling Coles. The turnaround was impressive – Coles’ same store sales growth has outstripped Woolworths’ for 20 consecutive quarters and the retailer has more than doubled its pre-tax earnings. AAP ResMed lifts its profit 4pc MeLBOURne: New product launches have helped sleepdisorder specialist ResMed lift its half-year net profit by more than 4 per cent. ResMed develops, manufactures and distributes medical equipment for treating, diagnosing, and managing sleep-disordered breathing, chronic obstructive pulmonary disease and other chronic diseases. ResMed said net profit for the six months to December 31 rose to $US174.44 million (more than $217 million), up 4.1 per cent. “We drove top-line revenue growth in the first half of this fiscal year by launching a strong, innovative portfolio of products and solutions,” ResMed chief executive Mick Farrell said. Mine shuts, 600 Arrium jobs lost MeLBOURne: Nearly 600 South Australian jobs will be axed as the plunging iron ore price prompted Arrium to halt a mining project. The loss-making Southern Iron mining operations south of Coober Pedy will be mothballed, resulting in 200 full-time Arrium workers and about 380 contractors losing their jobs. Arrium, formerly known as OneSteel, is Australia’s fourth-largest iron ore producer, and its mining operations have been under immense pressure since the iron ore spot price fell below $US80 a tonne late last year. The spot price in China was $US66.79 a tonne on Friday, compared with Arrium’s last reported production costs of $US73 a tonne. Arrium is keeping its lower-cost Middleback Ranges iron ore project going, but annual production will fall from 12.5 million tonnes to 9 million tonnes. “This is a positive announcement albeit difficult, impacting employees and contractors,” chief executive Andrew Roberts said. South Australian resources and energy minister Tom Koutsantonis said he had expressed his disappointment to Arrium Mining chief executive Greg Waters. The State Development department is to provide help to affected workers. The decision indicates Arrium does not have confidence iron ore prices, which have more than halved in the past year, will recover soon. While action was expected, an 18.4 per cent rise in Arrium’s share price on Thursday sparked speculation something more definite may have been known before Friday’s announcement. “The iron ore price was down 1 per cent and Atlas and BC Iron were two of the worst percentage performers (on Thursday),” optionsXpress market analyst Ben Le Brun said. “To have shares move completely in reverse of that certainly has question marks around it.” Arrium’s shares fell nearly 9 per cent to 20.5c on Friday, close to the record lows reached in September during its $754 million capital raising. AAP Oil price to put brakes on inflation Sydney: The next reading of inflation is expected to be one of the lowest in three years, after the price of oil more than halved in the past six months. The consumer price index, the key measure of inflation, is forecast to have risen by 0.2 per cent in the December quarter, according to a survey of economists. That would deliver an annual inflation rate of 1.8 per cent, which would be the first time inflation has been below the Reserve Bank’s target bank of between 2 and 3 per cent since mid-2012. It would also be the third-lowest reading after 1.2 per cent in the June quarter of 2012, and 1.6 per cent in the March quarter of that year. Oil prices have plummeted to five-year lows, mainly because of increased supply, and that has pushed petrol prices under $1 a litre in some areas, from about $1.30 in early December. HSBC chief economist AAP Paul Bloxham didn’t expect the RBA to cut the cash rate in response to a weak inflation result, which will be published on Wednesday, mainly because it was almost entirely dragged down by petrol prices. “Headline CPI inflation is expected to be low; Pumped up: Increased supply has seen petrol prices drop to five-year lows. however, as always, the RBA is expected to focus on the underlying measures to gauge the pulse of inflation,” he said. “We now expect the RBA to be on hold for 2015, with rates rising in 2016.” The median forecast for underlying inflation, which excludes volatile price movements such as the petrol price plunge, is 0.5 per cent for the December quarter, and Picture: AAP 2.2 per cent over the year to December. AMP chief economist Shane Oliver said a weak underlying figure would make the an interest rate cut possible. Santos flags writedowns Feeling rejected PeRTH: Energy company Santos has foreshadowed potential writedowns after a steep slump in oil prices. Santos confirmed it met its production guidance last year with 54.1 million barrels of oil equivalent (mmboe) while the average oil price during the quarter fell 20 per cent to $92 a barrel. The oil and gas company said its preliminary guidance on costs, royalties and spending was subject to finalisation of its accounts, which includes an impairment review in relation to lower oil prices. “As such, the actual results for the year ended December 31, 2014, may differ from the guidance 8 - The Border Watch, Tuesday, January 27, 2015 given in this update,” Santos said in its fourth-quarter report. Santos lifted sales revenue and production in the December quarter thanks to the start-up of its Papua New Guinea liquefied natural gas project, which cushioned the impact of falling oil prices. AAP Sydney: The Reject Shop’s half-year profit has fallen 25 per cent as improved sales in the Christmas period failed to offset weak trading in July and August. The retailer’s sales in the six months to December were down 3.3 per cent, excluding the impact of new stores and store closures. Sales were down 1.7 per cent from a year earlier and dropped 5.4 per cent in the September quarter. The Reject Shop expected to post a net profit of between $12.7 million and $13 million for the six months to December 31, which would be down from $16.9 million in the first half of 2013-14. AAP AAP in Brief Dollar below US80c, but worse expected Sydney: The Australian dollar could fall as low as US75c in the next few months, after plunging below US80c for the first time in five-and-a-half years. The local currency fell to US79.95c about 8.30am on Friday after the european Central Bank announced the launch of its stimulus program. It was the first time the dollar had fallen below US80c since July 2009. The currency managed to rebound within minutes and hovered above US80c for most of the day, but dipped again late to a low of US79.64c and was buying US79.90c at Friday’s close. Kathmandu tracks down new CEO WeLLInGTOn: Outdoor clothing retailer Kathmandu has appointed as its new chief executive Xavier Simonet, who will relocate from London to Melbourne to take up the role. Mr Simonet, an Australian citizen, is chief executive of London-based Radley, which has a product range covering women’s handbags, luggage and accessories, with global retail operations. He replaces former chief executive Peter Halkett, who left in november after eight years leading the retailer, saying he intended to take a year off before seeking new challenges. DreamWorks cuts jobs, movie plans neW yORK: dreamWorks Animation says it is reducing the number of films it produces each year from three to two and cutting 500 jobs. The company – known for animated movies such as Shrek and Kung Fu Panda – said it was seeking to reduce costs and improve profitability. dreamWorks said it would focus on six movies over the next three years – one original film and one sequel per year. The job cuts represent 18 per cent of its workforce. Perked-up Starbucks sees earnings soar SeATTLe: Starbucks Corp’s fiscal first-quarter earnings have soared 82 per cent it attracted more customers who snapped up expanded offerings of food and drinks over the holidays. The coffee chain has been introducing new and revamped baked goods, sandwiches and salads and wants to become more of a destination for grabbing a quick lunch. In the evenings, it plans to offer beer and wine in a quarter of its US stores over the next five years. Starbucks said it earned $1.22 billion in the quarter to december 28.
January 23rd 2015
January 28th 2015