Aurizon Holdings Ltd (AZJ):
Aurizon is still assessing a plan to buy Queensland's Wiggins Island Coal Export Terminal despite the sale of a key mine by one of the port's owners. Aurizon hoped to join forces with Macquarie, with Aurizon acquiring the terminal and Macquarie buying the port's biggest contracted customers, including the Curragh mine. The miners and Aurizon would then work together to reduce the fees paid by WICET's owners to access the port to try to increase export volumes.
Australia and New Zealand Banking Group (ANZ):
ANZ has chosen to walk away from a potential $600 million deal with one of China’s largest multinational corporations, after New Zealand’s foreign investment regulator raised concerns about the giant’s shadowy structure. New Zealand’s Overseas Investment Office in late December said it would block ANZ’s attempt to sell its vehicle financing arm UDC Finance to China’s HNA Group, after the conglomerate — which has substantial investments in Australia — failed to give clear information about its ownership and control interests. Although HNA Group had the option of appealing the NZ regulator’s decision, ANZ (ANZ) has now used a clause in its sale agreement, stipulating a contracted time frame for the deal to be completed, to walk away from the sale. The decision gives ANZ an opportunity to find a different buyer for the business. The bank has struck deals to sell 16 business divisions over the past two years, including the recent $3.8bn sale of its life insurance, pensions and investments businesses.
BHP Billiton Limited (BHP):
BHP is asking Vale SA to pay about $US1 billion ($1.3 billion) for its 50 per cent stake in the Samarco iron ore joint venture The valuation includes the provision that BHP would continue to assume its share of the remaining liabilities associated with a deadly dam spill in 2015. Melbournebased BHP is also asking to receive royalties for the life of the mine. Negotiations are still ongoing, according to the people. Samarco was once the world's second-largest iron ore pellet operation, but authorities stripped the firm of its licenses after the dam rupture. Samarco last month advanced its case for regaining permits when it was awarded a preliminary license necessary to begin preparations for reopening the mine in a limited capacity.
BLACKHAM RESOURCES LIMITED (BLK):
Troubled gold miner Blackham Resources has taken another step towards its recapitalisation with its main contractor MACA providing a $14.3 million loan to help it out of its short-term cash crunch. The MACA loan will enable Blackham to pay its financier Orion for a $14.8 million debt repayment which was due at the end of last year. The company plans to repay the remainder of its Orion facilities and normalise working capital using internally generated cash flows by the end of 2018, targeting a net-cash position by the end of the calendar year, whilst continuing exploration aimed at lengthening and improving the free-milling mine plan. Blackham’s 6.5Moz Matilda-Wiluna operations were bleeding cash last year because of high strip ratios, a lack of access to high-grade ore resulting in high operating costs but the company says the project is now “transitioning to stable production and strong operational cashflow.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank of Australia (CBA) will consider selling its majority stake in an Indonesian insurance venture, with any deal likely valuing the insurer at up to $250 million. Australia’s biggest lender is in talks with some investment banks and is expected to hire a financial adviser soon to help it decide on its 80 percent stake in PT Commonwealth Life. The review of the stake forms part of CBA’s move to exit non-core areas and a sale could value Commonwealth Life at about $200 million to $250 million. The stake sale, if completed, will be another instance of Asian banks exiting the insurance sector to free up capital and focus on their core banking businesses amid tougher regulatory capital buffer requirements.
JB Hi-Fi Limited (JBH):
An aggressive defence against online behemoth Amazon appears to have paid off for JB Hi-Fi, with analysts at Morgan Stanley upgrading the consumer electronics retailer after it enjoyed a better-than-expected Christmas trading period. Shares in JB Hi-Fi jumped more than 6 per cent to $28.49, an 11-month high, in early trade on Thursday, before falling back slightly to close up 4.44 per cent. From its November low to yesterday’s high point shares in the consumer electronics retailer surged 30 per cent, as Amazon’s much-hyped entry to the local market failed to live up to expectations. Morgan Stanley analysts yesterday upgraded the retailer to overweight from equal-weight, with a price target of $32 on “stronger-than-expected near-term trading performance and greater confidence in longer-term margins”. JB Hi-Fi should be able to navigate Amazon’s entry into Australia well, the analysts said, due to its market-leading positioning and attractive store economics.
Michael Hill International Ltd (MHJ): Jewellery retailer Michael Hill continues to review its struggling US operations after a sharp drop in sales there, as Australian stores turned in a flat performance. The weak Australian and US sales figures offset solid growth in New Zealand and Canada. In a half-year trading update, Michael Hill said US sales to December 31 tumbled 10 per cent. The chain (MHJ) said it was closely monitoring its US business given the “poor” performance. Meanwhile sales in Michael Hill’s 172 Australian stores remained flat over the period. Overall group revenue grew 4.7 per cent to $341.5 million compared to the same period last year, boosted by the company’s New Zealand and Canada operations as well as growth in sales in its Emma & Roe brand. Michael Hill same store sales rose only 0.7 per cent, in Australian dollar terms.
Newcrest Mining Limited (NCM):
Shipping has resumed at Australia's top iron ore export hub after Tropical Cyclone Joyce but investors will be keen for an update on the impact of heavy rains over mines when the nation's big iron ore producers release quarterly production reports this week. The cyclone did not reach the category three strength predicted by the Bureau of Meteorology and has since been downgraded to an ex-cyclone as it moves south towards Perth. But the system has dumped large amounts of rain over the Kimberley and Pilbara regions, close to some of Australia's biggest iron ore mining hubs. More than 60 millimetres fell at Telfer. Port Hedland was closed for about 43 hours between Thursday evening and Saturday afternoon. The outage is not expected to have a major impact on the miners' shipping rates, with Port Hedland typically exporting between 1.3 million and 2 million tonnes of cargo per day, most of which is iron ore...
Orica Ltd (ORI):
Orica appears to have snatched more business from rival explosives manufacturer Incitec Pivot, after Gina Rinehart's Roy Hill indicated it would not renew Incitec's contract to supply explosives when it expires next month. Roy Hill's decision comes barely one month after BHP confirmed it would not renew Incitec's contract to supply ammonium nitrate prill to BHP's Western Australian iron ore division when the contract expires in November 2019. Loss of the BHP contract will deliver a combined $35 million hit to Incitec's net profits over the 2020 and 2021 financial years, and Incitec said this week the loss of the Roy Hill contract would deliver a further $81 million hit to net profits after tax over the next five years. The biggest impact from the loss of the Roy Hill contract will come in 2020. There has been no confirmation of which company has replaced Incitec as the supplier of explosives to Roy Hill nor BHP, but it is believed to be Orica, which has recently started production from its new Burrup ammonium nitrate plant close to BHP and Roy Hill's operations in the Pilbara region of Western Australia. Orica declined to comment on Friday when asked if it had won the Roy Hill contract, but its shares were 20¢ higher at $19.05 in morning trade on Friday. Conversely, Incitec shares were almost 5 per cent lower in early trading, with the stock 19¢ lower at $3.67.
Origin Energy Ltd (ORG):
UNSW has signed a 15-year agreement with solar company Maoneng Australia and energy company Origin for a solar corporate power purchase agreement (PPA). A three-year retail firming contract – to provide additional power if solar energy generation is low – was also signed with Origin. UNSW president and vice chancellor Ian Jacobs said the agreement was part of the university’s goal to become energy carbon neutral by 2020. “Over the past six months, UNSW has collaborated with our contract partners Maoneng and Origin, to develop a Solar PPA model that leads the way in renewable energy procurement and reflects our commitment to global impact outlined in our 2025 strategy,” he said.
Rio Tinto Limited (RIO):
Rio Tinto Group has dropped out of the bidding for a stake in SQM, one of the world's top lithium producers, as it pursues other ways to capitalise on the electric-car boom. Rio decided not to proceed with an offer for Nutrien's 32 percent stake in Santiago-based SQM after studying information in a data room.
Telstra Corporation Ltd (TLS):
Telstra has launched a new technology in Australia that enables millions of devices to send small volumes of data at low power, allowing businesses to become connected to the Internet of Things (IoT). The technology, called narrowband, can be used to connect any number of devices to the internet, from irrigation systems for commercial farming all the way to home pool filters. Telstra already has Cat M1 technology spanning 3 million square kilometres, which it introduced in 2017. This is also an IoT technology but is more suited to personal health monitors, and monitoring vehicle performance, with much faster speeds. Narrowband was expected to be popular in the transport and logistics, mining, manufacturing and agricultural industries due to the volume of the data that could be handled, Telstra chief operations officer Robyn Denholm said. Telstra shares are up 0.5 per cent on Friday.
Transurban Group (TCL):
Transurban has expressed frustration at Australia's refusal to adopt US-style hot lanes. Transurban is also preparing for a busy year in Australia in 2018 with the sale of NSW's WestConnex motorway expected to absorb much of management's time over the next six months. Transurban is evaluating initial information on the sale provided by the government and is expected to submit an indicative bid at the end of next month as part of a consortium.
Virgin Australia Holdings Ltd (VAH):
After years of speculation and minority shareholder angst, Virgin Australia last year confirmed what many had long taken for granted: privatisation was on the cards. With less than 9 per cent of its shares traded freely on the stockmarket, the carrier is firmly in the control of its five largest investors, and in November chair Elizabeth Bryan said the board was acting in the best interests of all shareholders by exploring privatisation. Etihad Airways owns 21 per cent of Virgin, along with Singapore Airlines (20 per cent), Chinese conglomerates Nanshan (19.9 per cent) and HNA Group (19.8 per cent), and Richard Branson's Virgin Group (10 per cent). Going private would free Virgin from the burden of quarterly reporting, and the accompanying scrutiny, as it tries to fly out of a bumpy transformation period. But some say its public company structure has kept the competing interests of Virgin's rival airline owners in check. Virgin shares were down 1.9 per cent on Friday.
Vocus Group Ltd (VOC):
Vocus Group has divided the enterprise and wholesale divisions of its Australian business into separate operating segments, in a bid to restore shareholder value. Australia's fourth-largest telco says its structure will now comprise four reportable segments: Enterprise and Government; Wholesale and International; Consumer; and New Zealand, allowing senior executives to have a more narrowed focus on opportunities within these divisions. The announcement comes after Vocus chairman Vaughan Bowen in October apologised to shareholders for the company's $1.46 billion full-year loss and said the best way forward was to execute the company's plan to restore shareholder value.
Wagners Holding Company Ltd (WGN):
Newly-listed building materials group Wagners is constructing a $30 million airport for fly-in, fly-out workers on Adani's Carmichael coal mine. We have been in discussion with Adani for a long time about work out on the Carmichael project and those discussions are ongoing. The company confirmed last week it was in confidential contract negotiations with the Indian group. If it eventuates we will build the airport for them, we have been through a competitive tender. The airport, which is being paid for by Queensland's Rockhampton and Townsville councils, has been controversial, with the councils' role in the airport tender process under review by the Queensland government.
Woolworths Group Ltd (WOW):
Woolworths has appointed one of its most senior executives, Steve Donohue, to run its $8 billion liquor business. Mr Donohue, who is currently director of buying and merchandising for Woolworths Supermarkets, will take the helm of the Endeavour Drinks division in April. Endeavour Drinks is Australia's largest liquor retailer and owns Dan Murphy's, BWS, Cellarmasters, Langton's and Pinnacle Drinks. It is Woolworths' second largest division with annual sales of $8 billion and earnings before interest and tax of $502 million.
(Source: AIMS)
Aurizon is still assessing a plan to buy Queensland's Wiggins Island Coal Export Terminal despite the sale of a key mine by one of the port's owners. Aurizon hoped to join forces with Macquarie, with Aurizon acquiring the terminal and Macquarie buying the port's biggest contracted customers, including the Curragh mine. The miners and Aurizon would then work together to reduce the fees paid by WICET's owners to access the port to try to increase export volumes.
Australia and New Zealand Banking Group (ANZ):
ANZ has chosen to walk away from a potential $600 million deal with one of China’s largest multinational corporations, after New Zealand’s foreign investment regulator raised concerns about the giant’s shadowy structure. New Zealand’s Overseas Investment Office in late December said it would block ANZ’s attempt to sell its vehicle financing arm UDC Finance to China’s HNA Group, after the conglomerate — which has substantial investments in Australia — failed to give clear information about its ownership and control interests. Although HNA Group had the option of appealing the NZ regulator’s decision, ANZ (ANZ) has now used a clause in its sale agreement, stipulating a contracted time frame for the deal to be completed, to walk away from the sale. The decision gives ANZ an opportunity to find a different buyer for the business. The bank has struck deals to sell 16 business divisions over the past two years, including the recent $3.8bn sale of its life insurance, pensions and investments businesses.
BHP Billiton Limited (BHP):
BHP is asking Vale SA to pay about $US1 billion ($1.3 billion) for its 50 per cent stake in the Samarco iron ore joint venture The valuation includes the provision that BHP would continue to assume its share of the remaining liabilities associated with a deadly dam spill in 2015. Melbournebased BHP is also asking to receive royalties for the life of the mine. Negotiations are still ongoing, according to the people. Samarco was once the world's second-largest iron ore pellet operation, but authorities stripped the firm of its licenses after the dam rupture. Samarco last month advanced its case for regaining permits when it was awarded a preliminary license necessary to begin preparations for reopening the mine in a limited capacity.
BLACKHAM RESOURCES LIMITED (BLK):
Troubled gold miner Blackham Resources has taken another step towards its recapitalisation with its main contractor MACA providing a $14.3 million loan to help it out of its short-term cash crunch. The MACA loan will enable Blackham to pay its financier Orion for a $14.8 million debt repayment which was due at the end of last year. The company plans to repay the remainder of its Orion facilities and normalise working capital using internally generated cash flows by the end of 2018, targeting a net-cash position by the end of the calendar year, whilst continuing exploration aimed at lengthening and improving the free-milling mine plan. Blackham’s 6.5Moz Matilda-Wiluna operations were bleeding cash last year because of high strip ratios, a lack of access to high-grade ore resulting in high operating costs but the company says the project is now “transitioning to stable production and strong operational cashflow.
Commonwealth Bank of Australia (CBA):
Commonwealth Bank of Australia (CBA) will consider selling its majority stake in an Indonesian insurance venture, with any deal likely valuing the insurer at up to $250 million. Australia’s biggest lender is in talks with some investment banks and is expected to hire a financial adviser soon to help it decide on its 80 percent stake in PT Commonwealth Life. The review of the stake forms part of CBA’s move to exit non-core areas and a sale could value Commonwealth Life at about $200 million to $250 million. The stake sale, if completed, will be another instance of Asian banks exiting the insurance sector to free up capital and focus on their core banking businesses amid tougher regulatory capital buffer requirements.
JB Hi-Fi Limited (JBH):
An aggressive defence against online behemoth Amazon appears to have paid off for JB Hi-Fi, with analysts at Morgan Stanley upgrading the consumer electronics retailer after it enjoyed a better-than-expected Christmas trading period. Shares in JB Hi-Fi jumped more than 6 per cent to $28.49, an 11-month high, in early trade on Thursday, before falling back slightly to close up 4.44 per cent. From its November low to yesterday’s high point shares in the consumer electronics retailer surged 30 per cent, as Amazon’s much-hyped entry to the local market failed to live up to expectations. Morgan Stanley analysts yesterday upgraded the retailer to overweight from equal-weight, with a price target of $32 on “stronger-than-expected near-term trading performance and greater confidence in longer-term margins”. JB Hi-Fi should be able to navigate Amazon’s entry into Australia well, the analysts said, due to its market-leading positioning and attractive store economics.
Michael Hill International Ltd (MHJ): Jewellery retailer Michael Hill continues to review its struggling US operations after a sharp drop in sales there, as Australian stores turned in a flat performance. The weak Australian and US sales figures offset solid growth in New Zealand and Canada. In a half-year trading update, Michael Hill said US sales to December 31 tumbled 10 per cent. The chain (MHJ) said it was closely monitoring its US business given the “poor” performance. Meanwhile sales in Michael Hill’s 172 Australian stores remained flat over the period. Overall group revenue grew 4.7 per cent to $341.5 million compared to the same period last year, boosted by the company’s New Zealand and Canada operations as well as growth in sales in its Emma & Roe brand. Michael Hill same store sales rose only 0.7 per cent, in Australian dollar terms.
Newcrest Mining Limited (NCM):
Shipping has resumed at Australia's top iron ore export hub after Tropical Cyclone Joyce but investors will be keen for an update on the impact of heavy rains over mines when the nation's big iron ore producers release quarterly production reports this week. The cyclone did not reach the category three strength predicted by the Bureau of Meteorology and has since been downgraded to an ex-cyclone as it moves south towards Perth. But the system has dumped large amounts of rain over the Kimberley and Pilbara regions, close to some of Australia's biggest iron ore mining hubs. More than 60 millimetres fell at Telfer. Port Hedland was closed for about 43 hours between Thursday evening and Saturday afternoon. The outage is not expected to have a major impact on the miners' shipping rates, with Port Hedland typically exporting between 1.3 million and 2 million tonnes of cargo per day, most of which is iron ore...
Orica Ltd (ORI):
Orica appears to have snatched more business from rival explosives manufacturer Incitec Pivot, after Gina Rinehart's Roy Hill indicated it would not renew Incitec's contract to supply explosives when it expires next month. Roy Hill's decision comes barely one month after BHP confirmed it would not renew Incitec's contract to supply ammonium nitrate prill to BHP's Western Australian iron ore division when the contract expires in November 2019. Loss of the BHP contract will deliver a combined $35 million hit to Incitec's net profits over the 2020 and 2021 financial years, and Incitec said this week the loss of the Roy Hill contract would deliver a further $81 million hit to net profits after tax over the next five years. The biggest impact from the loss of the Roy Hill contract will come in 2020. There has been no confirmation of which company has replaced Incitec as the supplier of explosives to Roy Hill nor BHP, but it is believed to be Orica, which has recently started production from its new Burrup ammonium nitrate plant close to BHP and Roy Hill's operations in the Pilbara region of Western Australia. Orica declined to comment on Friday when asked if it had won the Roy Hill contract, but its shares were 20¢ higher at $19.05 in morning trade on Friday. Conversely, Incitec shares were almost 5 per cent lower in early trading, with the stock 19¢ lower at $3.67.
Origin Energy Ltd (ORG):
UNSW has signed a 15-year agreement with solar company Maoneng Australia and energy company Origin for a solar corporate power purchase agreement (PPA). A three-year retail firming contract – to provide additional power if solar energy generation is low – was also signed with Origin. UNSW president and vice chancellor Ian Jacobs said the agreement was part of the university’s goal to become energy carbon neutral by 2020. “Over the past six months, UNSW has collaborated with our contract partners Maoneng and Origin, to develop a Solar PPA model that leads the way in renewable energy procurement and reflects our commitment to global impact outlined in our 2025 strategy,” he said.
Rio Tinto Limited (RIO):
Rio Tinto Group has dropped out of the bidding for a stake in SQM, one of the world's top lithium producers, as it pursues other ways to capitalise on the electric-car boom. Rio decided not to proceed with an offer for Nutrien's 32 percent stake in Santiago-based SQM after studying information in a data room.
Telstra Corporation Ltd (TLS):
Telstra has launched a new technology in Australia that enables millions of devices to send small volumes of data at low power, allowing businesses to become connected to the Internet of Things (IoT). The technology, called narrowband, can be used to connect any number of devices to the internet, from irrigation systems for commercial farming all the way to home pool filters. Telstra already has Cat M1 technology spanning 3 million square kilometres, which it introduced in 2017. This is also an IoT technology but is more suited to personal health monitors, and monitoring vehicle performance, with much faster speeds. Narrowband was expected to be popular in the transport and logistics, mining, manufacturing and agricultural industries due to the volume of the data that could be handled, Telstra chief operations officer Robyn Denholm said. Telstra shares are up 0.5 per cent on Friday.
Transurban Group (TCL):
Transurban has expressed frustration at Australia's refusal to adopt US-style hot lanes. Transurban is also preparing for a busy year in Australia in 2018 with the sale of NSW's WestConnex motorway expected to absorb much of management's time over the next six months. Transurban is evaluating initial information on the sale provided by the government and is expected to submit an indicative bid at the end of next month as part of a consortium.
Virgin Australia Holdings Ltd (VAH):
After years of speculation and minority shareholder angst, Virgin Australia last year confirmed what many had long taken for granted: privatisation was on the cards. With less than 9 per cent of its shares traded freely on the stockmarket, the carrier is firmly in the control of its five largest investors, and in November chair Elizabeth Bryan said the board was acting in the best interests of all shareholders by exploring privatisation. Etihad Airways owns 21 per cent of Virgin, along with Singapore Airlines (20 per cent), Chinese conglomerates Nanshan (19.9 per cent) and HNA Group (19.8 per cent), and Richard Branson's Virgin Group (10 per cent). Going private would free Virgin from the burden of quarterly reporting, and the accompanying scrutiny, as it tries to fly out of a bumpy transformation period. But some say its public company structure has kept the competing interests of Virgin's rival airline owners in check. Virgin shares were down 1.9 per cent on Friday.
Vocus Group Ltd (VOC):
Vocus Group has divided the enterprise and wholesale divisions of its Australian business into separate operating segments, in a bid to restore shareholder value. Australia's fourth-largest telco says its structure will now comprise four reportable segments: Enterprise and Government; Wholesale and International; Consumer; and New Zealand, allowing senior executives to have a more narrowed focus on opportunities within these divisions. The announcement comes after Vocus chairman Vaughan Bowen in October apologised to shareholders for the company's $1.46 billion full-year loss and said the best way forward was to execute the company's plan to restore shareholder value.
Wagners Holding Company Ltd (WGN):
Newly-listed building materials group Wagners is constructing a $30 million airport for fly-in, fly-out workers on Adani's Carmichael coal mine. We have been in discussion with Adani for a long time about work out on the Carmichael project and those discussions are ongoing. The company confirmed last week it was in confidential contract negotiations with the Indian group. If it eventuates we will build the airport for them, we have been through a competitive tender. The airport, which is being paid for by Queensland's Rockhampton and Townsville councils, has been controversial, with the councils' role in the airport tender process under review by the Queensland government.
Woolworths Group Ltd (WOW):
Woolworths has appointed one of its most senior executives, Steve Donohue, to run its $8 billion liquor business. Mr Donohue, who is currently director of buying and merchandising for Woolworths Supermarkets, will take the helm of the Endeavour Drinks division in April. Endeavour Drinks is Australia's largest liquor retailer and owns Dan Murphy's, BWS, Cellarmasters, Langton's and Pinnacle Drinks. It is Woolworths' second largest division with annual sales of $8 billion and earnings before interest and tax of $502 million.
(Source: AIMS)
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