egolinews.com

Downer EDI Limited (DOW) said that its mining division had secured another $170 million in contracts in the current financial year, taking the new and renewed mining contracts to over $670 million for the current financial year. The company’s mining division currently stood around $2.7 billion.

The latest company wins included a 33-month contract with BHP Billiton to quarry and crush 1.6 million bank cubic metres of fresh basalt, Downer managing director and CEO Geoff Knox said.

“This new contract follows on from Mining’s previous contract with BHP Billiton Iron Ore at its Redmont site and we are pleased to continue our working relationship,” Mr Knox said.

Downer said it had signed a second contract with Fortescue Metals blasting services to Cloudbreak and Christmas Creek mines.

At 1055 AEDT, Downer shares were up 5c to $2.65.

Qantas Airways Limited (QAN) reported a 6.7% jump in passengers for the month of October to 3.679 million passengers, against the corresponding month last year. The airline reported revenue per kilometre was up by 3.2%, while Available Seat Kilometres fell 1.1%, resulting in revenue seat factor – a key measure of profitability for the airline – increased 3.4% to 83.3%.

Over the financial year to October 2009, group passenger numbers were up 6.2%.

Qantas reported domestic yield, excluding foreign exchange for the financial year to October was down 10.2%, while international yields, again excluding foreign exchange, was 24.2% lower than the corresponding period last year.

Qantas said it had hedged 85% of its expected fuel requirement in 2009/10 at a worst-case crude oil price of US$88 per barrel including option premium.

”At current rates, Qantas has 78% participation in falling oil prices for the remainder of the year,” the company said.

At 1039 AEDT Qantas shares were up 6c to $2.66.

Australian Agricultural Company Limited (AAC) said its 2010 and 2011 debt maturity obligations have been successfully refinanced. The beef cattle company said the new facilities, totaling $330 million, comprise two debt lines. AAco said the first line is a term loan of $270 million, which is a fully drawn facility with a three-year term, while the second line is a $60 million revolving facility, subject to annual review. The company said they replace two tranches of debt for $58 million and $250 million.

Allied Brands Limited (ABQ) forecasts a 20% – 33% jump in full year profit to between $6.6 million and $7.2 million for 2009/10. The franchisor and retailer attributed the forecast rise in profit to the international expansion of its Cookie Man brand and the growth of the Villa and Hut network, and the growth in sales of Baskin Robbins. Allied Brands said sales for the Awesome Group were up 23% for the first quarter, while the company’s newly created Franchise Services division was performing above expectations.

Lend Lease Corporation (LLC) announced a 13% increase in its offer to acquire all of the remaining shares in Lend Lease Primelife (LLP) it does not already own. Lend Lease said the price offered would be increased from 31c per security to 35c per share before adding the price is final would not be increased any further. In the statement released this morning it said the independent directors of Primelife unanimously recommend that Primelife shareholders vote in favour of the schemes in the absence of a superior proposal. The directors of Primelife have advised shareholders that they believe Primelife needs to raise at least $300 million to meet its refinancing requirements in the next 12 months and achieve its target gearing.

Cardno Limited (CDD) expects to report a net profit after tax for the half year ending December 2009 of between $14 million and $16 million. The company said the forecast was in line with the second half of FY09 and down on the previous corresponding period profit of $18.3 million. Cardno said the expected fall compared to a year earlier reflected the continued difficult market conditions resulting from the global downturn. The company expects a stronger second half performance based both on organic growth and recent project wins. In regards to recent reports regarding Dubai, Cardno said it has some debts with UAE development companies totalling around $4 million, however it does expect to be paid the outstanding amounts.

RBS – Round Up – 011209

Indophil Resources NL (IRN) said it had received and agreed to terms with Chinese mining giant Zijin Mining Group Company Limited for a takeover of Indophil shares at $1.28 cash per share. The offer price represents an 18% increase to the closing price of Indophil’s shares at 30 November.

Indophil said the proposed takeover remained dependent on certain regulatory and shareholder approval including from the Foreign Investment Review Board and 90% minimum acceptance from Indophil shareholders.

Indophil Chairman, Mr Brian Phillips, said that the Indophil directors were pleased to recommend the proposal.

“This is an excellent outcome which unlocks value for Indophil’s shareholders from the company’s minority ownership position in the world-class Tampakan Copper-Gold Project,” Mr Phillips said.

“It is also a positive outcome for the project and the people of the Philippines – Zijin is well positioned to fund its share of Tampakan’s capital expenditure estimate of US$5.2 billion.”

Indophil also noted the support for the bid from Xstrata, the company’s major shareholder, with a 19.99% holding in the company.

At the close Monday, Indophil shares were trading at $1.085.

Galaxy Resources Limited (GXY) announced it had been granted four mining leases surrounding the Mt Cattlin Spodumene mine by the Department of Mines and Petroleum (“DMP”). The company said two additional mining leases making up the West Kundip Manganese Project have also been granted. Galaxy said the Mt Cattlin leases are considered very prospective for pegmatite-hosted lithium-tantalum mineralisation, and outcropping spodumene (lithium) bearing pegmatite has been recorded from several areas on the new leases. The company said it is currently planning sampling and drill programs to follow up on pegmatite mineral occurrences with the aim of expanding the Mt Cattlin resource base. Galaxy said the West Kundip leases cover a sequence of Proterozoic sediments including dolomite units, which are prospective for manganese mineralisation.

Kangaroo Resources Limited (KRL) said it had raised $30 million through the placement of shares to instiutional and sophisticated investors via a fully underwritten share purchase plan. The funds raised would be used to develop four coal projects in the East Kalimantan region of Indonesia, as well as the completion of other projects with at least two coal mines set to go into production within the next six months. The funds were raised through the placement of 88 million shares at 25c per share, an 18% discount to yesterday’s closing price of 30.5c per share.

Rio Tinto Limited (RIO) announced the completion of the sale Alcan Composites to Schweiter Technologies for a total consideration of US$349 million. The mining giant said it has announced asset sales of US$8.3 billion since February 2008 in addition to receiving a binding offer from Amcor in August 2009 for US$2.025 billion for Alcan Packaging global pharmaceuticals, global tobacco, food Europe and food Asia divisions. Meanwhile, Rio said the proposed sale of 56% of the Alcan Engineered Products Cable division to Platinum Equity would not be completed as the sale has been terminated.   

Sonic Healthcare Limited (SHL) said it had acquired Rhode Island based East Side Clinical Laboratory for an undisclosed sum. Sonic said the US laboratory, established in 1949, had annual revenues of over US$30 million and would expand Sonic’s presence in the populous north-west region of the United States.

Metcash Limited (MTS) reported a post-tax profit of $109.2 million for the six months to 31 October 2009, up 36.5% from $80 million in the previous corresponding period. Looking ahead, Metcash CEO Andrew Reitzer reiterated guidance saying pre-abnormal earnings per share was expected to grow by between 7% and 10% in the current year.

However, Mr Reitzer said this result was despite persisting difficult trading conditions.

“The trading environment is strong, however low price inflation continues to hamper trading opportunities across all of our business pillars,” Mr Reitzer said.

Turning to the current results, Metcash said its normalised post-tax profit was $109.2 million, up 12.3% from $97.2 million last year.

Last year's first half profit included a $17 million charge related to the cancellation of an interest rate hedge.

Metcash said the result was driven by a 6.6% rise in sales $5.6 billion.

“Metcash has continued to show strong growth in sales and earnings, led by our major division IGA Distribution (IGA>D),” Mr Reitzer said.

“We also continued to reduce our cost of doing business as a percentage of gross profit to 63.98%, with our supply chain improvements enhancing the performance of the Group’s cost of warehousing and distribution.”

Mr Reitzer went on to forecast this operation’s revenue would earn over $1 billion this financial year.

Metcash said some of the growth would come from formerly branded Coles stores starting to trade under Foodworks. To date, 6 of the 45 stores previously announced had moved to IGA>D purchasing, with the rest expected to follow in the 2010 financial year.

At the close Monday, Metcash shares were up 12c to $4.68.

A late rally saw Wall Street close higher Monday after Dubai World said it plans to restructure less than half of its $60 billion in loans. Banks regained Friday's losses on a mixed day across the market.

In retail news, about 195 million people shopped in stores and online between Thanksgiving and Sunday, up 23 million a year ago, according to the National Retail Federation. However, average spending per person dropped from $372.57 to $343.31.

Meanwhile, a regional read on manufacturing rose from 54.2 in October to 56.1 in November. Forecasts were for the Chicago PMI to decrease to 53.3.

The Dow Jones added 34.92 points, or 0.34%, to 10,344.84, the S&P 500 rose 4.14 points, or 0.38%, to 1,095.63 and the NASDAQ put on 6.16 points, or 0.29%, to 2,144.60. 

Financials led the late surge with Wells Fargo up 3.3%, while JP Morgan and Bank of America gained 2.8% and 2.5%.

Goldman Sachs and Morgan Stanley advanced 3.6% and 3.5%.

American International Group slumped 14.7%.

Retailers weakened on the disappointing retail figures from Black Friday. Macy’s and Sears fell 3.9% and 1.4%.

Wal-Mart and Target shed 0.2% and 2.4%.

Home Depot and Alcoa lost the most ground on the Dow, losing 0.9% and 1.1%.

NYMEX light crude oil for January delivery rose US$1.23 to settle at US$77.28 a barrel.

Exxon Mobil gained 0.3%, while rival Chevron slid 0.2%.

COMEX gold for December delivery rose US$6.90 to settle at US$1181.10 an ounce.

European Markets

European shares fell as Dubai debt concerns reared its head once again. Energy stocks lost the most ground, while financials also struggled. 

The UK benchmark FTSE 100 shed 55.05 points, or 1.05% to 5,190.68. The French CAC40 lost 41.30 points, or 1.11% to 3,680.15, while the German DAX weakened 59.66 points, or 1.05% to 5,625.95.

BG Group fell 2%, while energy peers BP, Royal Dutch Shell and Total lost between 1.6% and 1.7%.

Aussie miners BHP Billiton and Rio Tinto slid 0.4% and 0.1%.

Among the UK banks Lloyds was the biggest loser. The company’s shares slumped 5.9%, while Standard Chartered and Barclays shed 2.4% and 1.9%.

The majors in France and Germany were mixed. BNP Paribas and Commerzbank weakened 0.3% and 0.2%, while Société Generale and Deutsche Bank put on 0.9% and 0.2%.

Insurers AXA and Prudential lost 2.1% each, while Aviva dropped 2.4%. 

Pharmaceutical Merck fell 4.1% after regulators held up an application for a multiple sclerosis pill. GlaxoSmithKline and Sanofi-Aventis dipped 1.7% each.

Japanese Markets

Financials led a surge on the Nikkei as the UAE central bank assured its support of its banks in the case Dubai World defaults. Exporters advanced as the yen fell off 14-year highs against other currencies.

The Nikkei 225 rallied 264.03, or 2.91% to 9,345.55.

Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group climbed between 8.6% and 9.5%.

Miyazaki Bank sank 19.7% as the company announced it would tap the market for capital.

Trading company Sumitomo Corp added 4.7% on a broker upgrade.

Canon and Sony gained 4.1% and 2.7%, while automakers Toyota and Nissan rose 4.2% and 3.5%.

Real-estate companies moved higher after Daiwa Securities said gave a positive recommendation on the sector. Mitsubishi Estate Co. and Mitsui Fudosan Co. jumped 7.7% and 8%.

Homebuilder Arnest One Corp spiked 10.9% following a broker upgrade.

Hong Kong Markets

The Hang Seng surged to the largest one-day gain in four months Monday. Banks recovered much of Friday’s losses as Dubai debt fears eased, while investors were also encouraged after the Chinese government reaffirmed commitment to the economic stimulus package.

The Hang Seng soared 687.00, or 3.25% to 21,821.50.

China’s number one lender, ICBC, climbed 4.6%. HSBC gained 4.3%.

Bank of China spiked 5.8%.

PC maker Lenovo was 4.7% dearer after saying it would buy Lenovo Mobile Communication Technology for $200 million in cash and shares.

Stocks focused on the retail market made modest ground Monday. Yue Yuen, the world’s largest branded shoemaker, put on 1.2%.

Li & Fung, which makes clothes for Wal-Mart surged 2.8%.  Phone maker Foxconn International spiked 3.1%.

Chinese automaker BYD rallied 6.2%.

Directors' Interest Notices
30 November 09

No Directors' Interest Noticed for today.