Incitec Pivot Ltd (IPL):
Incitec Pivot’s Gibson Island fertiliser plant at Brisbane, set to become loss-making when old gas contracts expire this year, has been given a glimmer of hope after Incitec partner Central Petroleum won ground in Queensland’s latest release of gas ground specifically to be developed for domestic markets. Queensland Resources Minister Anthony Lynham announced today at the Australian Domestic Gas Outlook conference in Sydney that Central (CTP) and Armour Energy (AJQ) had been awarded ground. Gibson Island, which employs 500 people and, Incitec (IPL) says, another 1,500 indirectly, will close at the end of the year if it cannot secure gas priced well below current rates.
Macquarie Group Ltd (MQG):
The share price of Macquarie Group's US-listed infrastructure fund crashed 41 per cent on a single trading day last week, leaving investors fuming about the handling of the shock profit guidance downgrade. The highly indebted Macquarie Infrastructure Corp (MIC) slashed its future dividend and revealed it had lost oil trading customers at its bulk liquid storage facility in the US state of Louisiana. To stave off the threat of losing its investment-grade credit rating, MIC's $US1.44 December quarter dividend was slashed to a forecast $US1 for each quarter in 2018. The bad news was delivered by new MIC chief executive Christopher Frost last Thursday, just two months after predecessor James Hooke departed to return to Sydney to run toll road group Macquarie Atlas Roads.
Orica Ltd (ORI):
Shares in explosives manufacturer Orica have slumped to a near three-month low amid revelations of premature cracking at a brand new ammonium nitrate facility in Western Australia, unplanned maintenance and plans to record close to $300 million of impairments and provisions on other parts of the business. The slew of bad news announced today will ensure first half earnings before interest and tax are lower than the $281 million recorded for the first half of 2017. The issues at Burrup were arguably the most concerning issue raised, given Orica and Norwegian partner Yara have spent $800 million on the plant over the past five years in the hope of supplying explosives to the iron ore miners in the Pilbara region. Originally planned to be built by 2015, Burrup was declared commercially complete in September 2017, and was expected to operate at 30 to 40 per cent of capacity in 2018. But Orica indicated the plant would not be operational until later in 2018 while Yara investigated the cracking. "The joint venture operating partner, Yara, is addressing issues related to the construction quality of heat exchangers which have shown some premature cracking," said Orica in a statement. Shares in Orica are 4 per cent lower on Thursday at $17.91; the lowest since early December.
Southern Cross Media Group Ltd (SXL):
Southern Cross Media’s biggest shareholder Allan Gray Australia has increased its stake in in the media company to 15.5 per cent, after chief executive Grant Blackley signalled that he was ready to do a deal. One of Australia’s biggest investors in traditional media companies, Allan Gray has boosted its shareholding in SCA twice in the past four months in what appears to be a vote of confidence in Mr Blackley’s focus on improving the company’s balance sheet ahead of an expected round of industry consolidation. The radio and television broadcaster’s chief executive last week said he was eyeing the out-of-home sector and that M & A action, yet to appear following last year’s sweeping changes to media ownership laws, was expected within the next six months, with key players “getting their houses in order”. He made the comments after posting a $38.2m half-year profit, down 21 per cent from the prior corresponding period. In late February, Allan Gray’s stake increased from 13.87 per cent to 15.5 per cent, exceeding the 14.87 per cent it held two years ago.
Tabcorp Holdings Limited (TAH):
Tatts Group, which is now owned by wagering giant Tabcorp, spent almost $5 million on a campaign to try to shut down online lottery competitor Lottoland. Tatts Group’s half-year financial accounts, released today, revealed that a 16.6 per cent decline in its statutory net profit after tax to $102.3m was impacted by merger costs and corporate items, which included the Lottoland campaign. Tatts (TTS) outlined an expense of $4.9m on a “synthetic lottery public campaign”, which it said highlighted the harm that type of product had on Australian communities. Lottoland, which allows punters to bet online on the outcome of overseas lottery and keno draws, has been strongly opposed by competing domestic businesses. It has faced campaigns from Tatts Group, the Australian Lottery and Newsagents Association, the Australian Hotels Association and ClubsNSW. The Australian Lottery and Newsagents Association campaigned strongly, backed by Tatts Group, against the online betting company last year and scored a win when Lottoland was banned from accepting bets on Australian lotteries.
Yancoal Australia Ltd (YAL):
Yancoal chief executive Reinhold Schmidt says his company's $4.5 billion net debt will not prohibit further spending if the right opportunity comes along, given the significant cashflow being generated by the company since it acquired Rio Tinto's Hunter Valley coal assets. Speaking after reporting Yancoal's first full-year profit since 2012, Mr Schmidt said Yancoal's 47.3 per cent gearing ratio was no barrier to the company's growth ambitions, and he said he did not have a particular debt reduction target in mind. "You can do the calculations and see that we will generate substantial cashflow in order to repay debts, or for something else," he said on Thursday. "We look at everything on the market all of the time, from small to big. If you don't look at everything you don't know what opportunities you are actually missing, however we have got a very, very disciplined asset review approach.
(Source: AIMS)
Incitec Pivot’s Gibson Island fertiliser plant at Brisbane, set to become loss-making when old gas contracts expire this year, has been given a glimmer of hope after Incitec partner Central Petroleum won ground in Queensland’s latest release of gas ground specifically to be developed for domestic markets. Queensland Resources Minister Anthony Lynham announced today at the Australian Domestic Gas Outlook conference in Sydney that Central (CTP) and Armour Energy (AJQ) had been awarded ground. Gibson Island, which employs 500 people and, Incitec (IPL) says, another 1,500 indirectly, will close at the end of the year if it cannot secure gas priced well below current rates.
Macquarie Group Ltd (MQG):
The share price of Macquarie Group's US-listed infrastructure fund crashed 41 per cent on a single trading day last week, leaving investors fuming about the handling of the shock profit guidance downgrade. The highly indebted Macquarie Infrastructure Corp (MIC) slashed its future dividend and revealed it had lost oil trading customers at its bulk liquid storage facility in the US state of Louisiana. To stave off the threat of losing its investment-grade credit rating, MIC's $US1.44 December quarter dividend was slashed to a forecast $US1 for each quarter in 2018. The bad news was delivered by new MIC chief executive Christopher Frost last Thursday, just two months after predecessor James Hooke departed to return to Sydney to run toll road group Macquarie Atlas Roads.
Orica Ltd (ORI):
Shares in explosives manufacturer Orica have slumped to a near three-month low amid revelations of premature cracking at a brand new ammonium nitrate facility in Western Australia, unplanned maintenance and plans to record close to $300 million of impairments and provisions on other parts of the business. The slew of bad news announced today will ensure first half earnings before interest and tax are lower than the $281 million recorded for the first half of 2017. The issues at Burrup were arguably the most concerning issue raised, given Orica and Norwegian partner Yara have spent $800 million on the plant over the past five years in the hope of supplying explosives to the iron ore miners in the Pilbara region. Originally planned to be built by 2015, Burrup was declared commercially complete in September 2017, and was expected to operate at 30 to 40 per cent of capacity in 2018. But Orica indicated the plant would not be operational until later in 2018 while Yara investigated the cracking. "The joint venture operating partner, Yara, is addressing issues related to the construction quality of heat exchangers which have shown some premature cracking," said Orica in a statement. Shares in Orica are 4 per cent lower on Thursday at $17.91; the lowest since early December.
Southern Cross Media Group Ltd (SXL):
Southern Cross Media’s biggest shareholder Allan Gray Australia has increased its stake in in the media company to 15.5 per cent, after chief executive Grant Blackley signalled that he was ready to do a deal. One of Australia’s biggest investors in traditional media companies, Allan Gray has boosted its shareholding in SCA twice in the past four months in what appears to be a vote of confidence in Mr Blackley’s focus on improving the company’s balance sheet ahead of an expected round of industry consolidation. The radio and television broadcaster’s chief executive last week said he was eyeing the out-of-home sector and that M & A action, yet to appear following last year’s sweeping changes to media ownership laws, was expected within the next six months, with key players “getting their houses in order”. He made the comments after posting a $38.2m half-year profit, down 21 per cent from the prior corresponding period. In late February, Allan Gray’s stake increased from 13.87 per cent to 15.5 per cent, exceeding the 14.87 per cent it held two years ago.
Tabcorp Holdings Limited (TAH):
Tatts Group, which is now owned by wagering giant Tabcorp, spent almost $5 million on a campaign to try to shut down online lottery competitor Lottoland. Tatts Group’s half-year financial accounts, released today, revealed that a 16.6 per cent decline in its statutory net profit after tax to $102.3m was impacted by merger costs and corporate items, which included the Lottoland campaign. Tatts (TTS) outlined an expense of $4.9m on a “synthetic lottery public campaign”, which it said highlighted the harm that type of product had on Australian communities. Lottoland, which allows punters to bet online on the outcome of overseas lottery and keno draws, has been strongly opposed by competing domestic businesses. It has faced campaigns from Tatts Group, the Australian Lottery and Newsagents Association, the Australian Hotels Association and ClubsNSW. The Australian Lottery and Newsagents Association campaigned strongly, backed by Tatts Group, against the online betting company last year and scored a win when Lottoland was banned from accepting bets on Australian lotteries.
Yancoal Australia Ltd (YAL):
Yancoal chief executive Reinhold Schmidt says his company's $4.5 billion net debt will not prohibit further spending if the right opportunity comes along, given the significant cashflow being generated by the company since it acquired Rio Tinto's Hunter Valley coal assets. Speaking after reporting Yancoal's first full-year profit since 2012, Mr Schmidt said Yancoal's 47.3 per cent gearing ratio was no barrier to the company's growth ambitions, and he said he did not have a particular debt reduction target in mind. "You can do the calculations and see that we will generate substantial cashflow in order to repay debts, or for something else," he said on Thursday. "We look at everything on the market all of the time, from small to big. If you don't look at everything you don't know what opportunities you are actually missing, however we have got a very, very disciplined asset review approach.
(Source: AIMS)
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