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​AUSTRALIA MARKETS(2017-09-20)

AIMS
2017-09-20 10:47

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AGL Energy Ltd (AGL): 
AGL Energy faces "a huge daily challenge" just to keep its "geriatric" Liddell coal-fired power station running and will need to spend up to $150 million just to "keep our noses above water" until 2022, according to a senior executive. “It’s exceptionally challenging," AGL Macquarie general manager Kate Coates said at the 46-year-old Liddell operation in the NSW Hunter Valley. The plant is limping along as she speaks, with one of four turbines down for its three-yearly maintenance, another out of action due to an unexpected "complex" failure, and the other two are running well below capacity to minimise the chance of them also breaking down. Under intense pressure from the federal government to keep Liddell running past its slated 2022 closure date, AGL is holding firm to its stance that the investment required would be better spent on new capacity more appropriate for the lower carbon, more flexible power supply system needed for the future. 

Australia Post; Amazon: 
Australia Post has joined air express parcel delivery companies in opposing a fresh push by internet giant Amazon to overhaul the way GST would be collected on low-value internet purchases. While the government’s new laws will require online marketplaces to collect the GST at the time of sale for imports worth less than $1000, US retail giant Amazon is instead arguing for a “modernised transporter model” that would instead see logistics companies collect the tax on parcels they deliver. Amazon insists the government would collect more money in GST. But in a new submission, Australia Post says the model proposed by Amazon would lead to higher costs, including extra staff, and these costs would be “untenable”. Instead, Australia Post says, the government’s model can be rolled out “without creating undue burden for small businesses or consumers in Australia through additional handling charges”. The submission signals further escalation of the stoush over who should collect the GST on low-value imported goods.

Evolution Mining Ltd (EVN): 
Egyptian billionaire Naguib Sawiris has sold down some of his holding in Australia’s second-biggest gold producer Evolution Mining. Sawiris, who made his fortune through telecommunications, has sold just over 20 million Evolution shares worth almost $50 million on-market and representing around 1.5 per cent of the company. His company La Mancha Group continues to own a 26.9 per cent stake in Evolution and remains the company’s single biggest shareholder. Sawiris became Evolution’s biggest holder back in 2015, when he sold Evolution his Frog’s Leg gold mine near Kalgoorlie. Since then the stock has climbed from around $1.23 a share to a recent high of $2.66.

Incitec Pivot Ltd (IPL): 
Incitec Pivot shares are climbing today, up 1.1 per cent, and adding to a gain of 2.5 per cent made on Monday. The fertiliser maker advanced along with its US peers, which climbed after a recovery in prices for some key crop nutrients.Last Friday, spot prices for urea at the US Gulf rose to the highest in six months, according to data from Green Markets, while prices for diammonium phosphate climbed to the highest since March. The gains mark a turnaround for the fertiliser market, which has been mired in a slump as production capacity rises across the industry. Green Markets reported that Yara International decided to stop taking orders for nitrogen-based products in Europe, and India issued a surprise tender to buy urea that will close on Sept. 25. 

New Hope Corporation Ltd (NHC): 
Mining company New Hope swung to an annual profit on the back of stronger sales and sharply improved coal prices. New Hope on Tuesday reported a net profit of 140.6 million Australian dollars (US$111.9 million) for the year through July, rebounding from a year-earlier loss of A$53.7 million. Revenue for the year climbed by 59pc to A$844.0 million from A$531.5 million. The miner said it planned to pay a final dividend of 6 cents a share, a jump on the 2 cents paid last year, for a full-year payout of 10 cents. In late August, New Hope recorded an 18pc rise in raw coal production for the year to 14.7 million metric tons and a 23pc jump in total coal sold to 8.5 million tons as it benefited from the acquisition of a 40pc stake in the Bengalla joint venture in New South Wales state. It also lifted barrels of oil sold over the year by 61pc on the back of acquisitions in the last two years. 

Rio Tinto Ltd (RIO): 
The incoming finance chief at Rio Tinto needs to make sure that the company doesn’t make the same mistakes twice, analysts say.The mining giant (RIO) has announced its current CFO, Christopher Lynch, will retire by the end of September 2018, having served in his role since April 2013.Rio Tinto has started the search for a successor and will make an appointment soon, it said in a statement. Like its peers, Rio Tinto came under significant strain when commodity prices started falling in 2014 and 2015, after a year-long boom. Now, with prices once more on an upward trajectory, miners need to be careful not to overspend again. The company generated significant returns from asset sales this year, including $US2.69 billion from the sale of the Coal & Allied thermal coal assets announced in the first half of 2017.Rio Tinto in August reported sales revenue of $US19.3 billion for the first half of 2017, $US3.8 billion higher than during the first six months of 2016, mainly due to higher average commodity prices. Free cash flow rose from $US2.03 billion in the first half of 2016 to $US4.64 billion in the first six months of 2017. Net debt fell by $US2 billion to $US7.6 billion.

Syrah Resources Ltd (SYR): 
Syrah Resources is raising $110 million in equity through joint lead managers UBS and Credit Suisse. The raise is by way of an entitlement offer and a placement.The equity will be used to help fund its Balama Graphite project and other costs. Shares are being raised at $3.38 each, which equates to a 11.1 per cent discount to their last traded price. 

Tabcorp Holdings Limited (TAH): 
A court will rule tomorrow on whether Tabcorp can go ahead with its $12bn merger with rival gambling giant Tatts, almost a year after the transaction was first proposed. Despite fierce objections from corporate bookies including James Packer’s CrownBet, the deal was approved by the Competition Tribunal in June. However, both the Australian Competition and Consumer Commission and CrownBet asked the Full Federal Court to review the decision. The ACCC’s appeal is based on chairman Rod Sims’ belief three points of law, which it relies internally on to make its own authorization decisions, need to be clarified following the Competition Tribunal’s ruling. Last month, Mr Sims said the ACCC accepted it needed to do more to convince courts and tribunals of its point of view — including gather more evidence, potentially blowing out merger timelines. 

Ten Network Holding Ltd (TEN): 
The creditors of Network Ten have voted in favour of US studio giant CBS, which lobbed a new and higher bid on Monday night. The CBS deal gained more than 50 per cent of the debt value and total votes at a creditor's meeting on Tuesday, indicating that Ten staff voted overwhelmingly for CBS. The deal is yet to be approved by a court. The move comes after rival bidders Bruce Gordon and Lachlan Murdoch threw in a new bid for Ten last Friday, lifting their offer to unsecured creditors to $55 million, up from $35 million.

TPG Telecom Limited (TPM): 
TPG Telecom has slashed its final dividend and warned of pressure from the rollout of Australia’s national broadband network even as it reported a 9 per cent rise in annual profit. Fixed-line residential broadband margins will be squeezed across the industry as the federal government’s network continues to roll out, the telecommunications firm said. It added that while it was in favour of increasing dividends over time, it decided to hold on to a greater proportion of profits to help fund the company’s planned development of mobile networks in Singapore and Australia. Strong progress had been made on both networks, with the operation in Singapore set to hit a milestone with its first nationwide outdoor service coverage before the end of 2018, TPG said. TPG said it planned to pay a final dividend of 2 cents a share, a cut of 73 per cent on last year, for a full-year payout of 10 cents.

Woolworths Ltd (WOW): 
The competition regulator has issued a list of 226 Woolworths fuel sites which overlap with BP sites and will need to be analyzed to determine the impact on competition before BP is allowed to proceed with its $1.8 billion acquisition of Woolworths' fuel business. The overlapping sites account for almost half the 531 existing sites and 14 development sites BP proposes to buy from Woolworths in a deal that will make the British-based energy giant the largest fuel retailer and wholesaler in Australia. The deal is under a cloud because the Australian Competition and Consumer Commission fears it may lessen competition in fuel and convenience retailing and lead to higher pump prices by removing a strong competitor. 
(Source: AIMS)
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