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AGL Energy Limited (AGK) said it has entered into conditional arrangements for the construction of Macarthur Wind Farm in south-west Victoria under a joint venture with New Zealand’s Meridian Energy Limited. The company said the agreement follows the Federal government’s announcement last week of proposed changes to the operation of the Renewable Energy Target (RET) scheme.

AGL said it would take all of the wind farm’s energy output and renewable energy certificates.

”The contractual arrangements are subject to a number of conditions precedent, including approval by the Boards of the joint venture partners,” the company said.

”A key consideration of AGL’s Board in approving the transaction will be certainty around the final form of the legislation to give effect to the Federal government’s announced changes to the RET scheme.”

AGL said the wind farm would comprise 174 Suzlon S88 turbines for a total capacity of 365MW, which is expected to deliver approximately 945 gigawatt hours of electricity each year.

The company said construction is expected to take about three years.

As at 1041 AEDT, AGL shares were up 17c to $14.54.

AWE Limited (AWE) this morning said that it has increased its equity in the Bass Gas project from 42.5% to 57.5%. As previously advised, the purchase consideration will be adjusted on completion as necessary to reflect the effective date. The acquisition of this 15% equity interest will add to AWE’s gas, condensate and LPG production and will also add approximately 10 million barrels of oil equivalent (”BOE”) to AWE’s proved and probable reserves. “AWE is extremely pleased to announce this increased equity in the BassGas project which will provide meaningful, sustainable long term cash flows to AWE shareholders,” AWE Managing director, Bruce Wood said.

Carnarvon Petroleum Limited (CVN) reported a net profit after tax of $7.4 million for the half-year ended 31 December 2009, down 64.2% on the previous corresponding period. The company said the result primarily reflected the impact of a lower Australian dollar equivalent oil price derived during the period and a decrease in production compared to the half-year ended 31 December 2008. Carnarvon reported a 47.3% drop in revenue, while the company attributed the decline in production to an exploration focused drilling programme during the period. The company said the drilling programme would be more focused to development wells for the remainder of the calendar year in order to build on current production levels.

PanAust Limited (PNA) said it has made a binding offer to Corporación Nacional del Cobre de Chile (“Codelco”) for the Australian company to acquire a majority interest in the Chilean company Inca de Oro S.A. Following a re-structure of Codelco subsidiaries, Inca de Oro S.A. will own the Inca de Oro Copper/Gold Project where an Indicated and Inferred sulphide Mineral Resource of 259 million tonnes grading 0.46% copper and 0.13g/t gold has been identified. PanAust’s interest in Inca de Oro S.A. will be held through a 90% interest in PanAust Minera. An independent Australian private investment company, The Minera Group, will hold the other 10% of PanAust Minera. PanAust Minera will initially invest US$45 million of equity into Inca de Oro S.A. to acquire 66% of the company.

Rio Tinto Limited (RIO) said it has agreed to acquire 15 million shares in Ivanhoe Mines Limited for C$244.7 million. The mining giant said the acquisition would increase its ownership in Ivanhoe Mines by 2.7% to 22.4%.

Chief executive of Rio Tinto's copper division, Andrew Harding said the investment underlined the company’s confidence in the quality of the Oyu Tolgoi deposit and its priority in the Rio’s project portfolio.

”We are working with Ivanhoe Mines on finalising the conditions precedent for completion of the Investment Agreement with the Government of Mongolia and are looking forward to moving into the development phase of the project,” Mr Harding said.

Rio Tinto said it is being issue the shares satisfaction of an arrangement with Ivanhoe Mines in 2008 to finance equipment for the Oyu Tolgoi copper-gold complex in Mongolia’s South Gobi region.

The company said production of the project is expected to commence in 2013, with a five-year ramp up to full expected production of 450,000 tonnes of copper per year and 330,000 ounces of gold.

Upon completion of the acquisition, Rio said it would own 98.6 million shares of Ivanhoe Mines and if the company were to exercise all of its share purchase warrants and convert its US$350 million loan into shares it would own approximately 267.6 million shares, or 44% of Ivanhoe Mines.

The company said it has the right to exercise its share purchase warrants and/or convert its convertible loan into shares of Ivanhoe Mines, and also the right to acquire additional securities so as to maintain its proportional equity interest in Ivanhoe Mines, and the right to acquire additional Ivanhoe Mines securities in certain other circumstances and subject to certain limits.

As at 1029 AEDT, Rio Tinto shares were up 64c to $71.14.  

RBS – Round Up – 010310

Clive Peeters Limited (CPR) squeezed out a modest $424,000 profit in the six months to 31 December, despite posting revenue of $252 million. The profit figure was down 57%, while revenue dipped just 5% from the previous corresponding period.

Clive Peeters said the bottom line was affected by ‘misappropriation of funds’.

In August last year, the company said that one of its payroll employees had embezzled up to $19.4 million. At the time, the company said it believed up to $16.4 million could be recovered through the sale of properties.

Managing director, Greg Smith, said the company considered it a ‘very creditable result’.

“Some erosion of gross margin occurred during H1 2010 due to a more competitive retail environment,” Mr Smith said.

”However Clive Peeters margins were impacted negatively as a result of the misappropriation events and the associated impact this had on our supply channel and rebate revenue.”

Looking to the second half of the year, the company said lifting margins was a key priority for the company.

However, Clive Peeters said both January and February had seen sales ‘significantly’ below expectations.

Looking at the numbers in more detail, Clive Peeters reported EBITDA and EBIT of $4.6 million and $2 million respectively, down 28% and 43%.

The board declared that it would declare a dividend as it tries to shore up capital.

At the close Friday, Clive Peeters shares were 28c. The company was trading at an all time high of $3.50 in April 2007.

Westpac Banking Corporation (WBC) said today that it commenced operating as a single authorised deposit-taking institution (“ADI”). Australia’s second largest bank by market capitalistaion said in moving to a single ADI all the assets and liabilities of St.George Bank Limited have become those of Westpac’s.

The company said the process of transitioning to a single ADI was first detailed in a statement on 12 February 2010 and was finalised following APRA and Federal Court approval.

“In conjunction, the legal entity, St.George Bank Limited, has been deregistered,” Westpac said.

“The move to a single ADI and deregistration has no impact on the separate St.George brand and branches.”

Westpac added that the change would have no impact on customers’ ordinary interactions with St.George.

At the close of trade Friday, Westpac shares were trading at $26.13.

The release of mixed data on Friday, and through the week, saw Friday’s session bring February to close on a flat note. Reports out this week included disappointing reads on joblessness, durable goods orders and housing, while investors were buoyed at week’s end with a better-than-expected rise in GDP to a 5.9% annual rate.

In other economic reports, the Chicago purchasing managers' index on regional manufacturing was improved, while consumer confidence reads from the University of Michigan slipped modestly.

It proved to be a volatile month for the S&P 500, however it finished 2.9% higher, and the best performance since November and the best February since 1998.

The Dow Jones rose 4.23 points, or 0.04%, to 10,325.26, the S&P 500 gained 1.55 points, or 0.14%, to 1,104.49 and the NASDAQ picked up 4.04 points, or 0.18%, to 2,238.26.

Insurance giant AIG, which was the recipient of so much government bailout money, and then anger for paying it as bonuses, posted a massive $9 billion loss for the last quarter alone. Its shares tumbled 10%.

Citigroup lost 0.3%. The bank said its board of directors would shrink by two to 15 in total.

It was a good session for other financial stocks, with only Wells Fargo, down 0.4%, losing ground amongst the majors.

JPMorgan put on 3.3%.

Among the tech stocks, Apple rose 1.3%, while Microsoft was 0.2% up. Most other tech stocks were less than 1% above the gain line.

It was a different story for the retailers with disappointing consumer confidence reports seeing the sector fall.

Macy’s gave up 0.7%, while Saks was 3.1% weaker.

Proving the importance of a strong management team, shoemaker Croc’s shares tumbled 9.5%, despite beating the street’s expectations with strong earnings figures and a bullish outlook. Instead, investors reacted to the announcement its CEO would resign.

NYMEX light crude oil for April finished up US$1.49 to US$79.66 a barrel.

Exxon Mobil lost 0.2%, however rival Chevron countered with a 0.3% gain.

COMEX gold for April delivery added US$10.40 to US$1,118.90 per ounce.

European Markets

European markets rebounded on the positive GDP figures out of the US. The banks led the rally, while the miners added to gains as commodity prices recovered losses from earlier in the week.

The UK benchmark FTSE 100 rose 76.30, or 1.45% to 5,354.52, the German DAX added 66.13, or 1.20% to 5,598.46 and the French CAC40 climbed 68.03, or 1.87% to 3,708.80.

Among the UK banks, Barclays and HSBC were 1.8% and 1.4% stronger.

It wasn’t a good day for Lloyds whose shares tumbled 4.4%. The company reported a worse-than-expected loss on widening bad loans following its takeover last year of HBOS.

French banks Credit Agricole and BNP Paribas were 4% and 3.2% stronger, while Deutsche Bank added 2.3%.

Volkswagen shares shed 0.8% after the carmaker said its profit had fallen 80%. German peer Daimler was 1% stronger.

In France, Renault and Peugeot rallied 2.7% and 2.2%.

Aussie mining peers, BHP Billiton and Rio Tinto put on 2.4% and 3.5% respectively.

Anglo American and Xstrata gained 3.6% and 3% respectively.

Among the more obscure stocks to receive attention, Seadrill rose 9.2% after the Norwegian oil-drilling contractor reported a bigger-than-expected rise in quarterly operating profit.

Elsewhere, building materials group Saint Gobain spiked 7.9%, also on the back of stronger than expected results.

Bayer fell 1.4% in Germany after forecasting a 2010 profit below analyst’s earlier expectations.

BASF, the world’s largest chemical maker, gained 0.3%.

Japanese Markets

The Nikkei edged higher Friday on the back of positive factory output data and consumer sales. Carmakers gained ground, finishing a poor month on a high note.

Factory production rose 2.5% – posting its 11th straight month of gains.

The Nikkei 225 gained 24.07, or 0.24% to 10,126.03.

Toyota climbed 1.8% after Citigroup upgraded the stock, while Mazda surged 4%.

Isuzu also gained, up 2.3% although Nissan bucked the trend, shedding 0.4%.

Aeon, the Japanese equivalent of Woolworths, put on 2.9% after yet another broker upgrade.

The gains from retailers and automakers were countered by declines from the banks.

Mitsubishi UFJ Financial Group lost 0.4%. It was the most heavily traded stock of the day.

Consumer electronics heavyweight Pioneer gave up 2.5%, while Sony put on 0.2%.

Hong Kong Markets

The Hang Seng gained just over 1% Friday on the back of strong earnings figures and a rise from their mainland counterparts. The index posted its biggest one-month gain since last October.

The Hang Seng rose 209.13, or 1.03% to 20,608.70.

In a wrap of the banks, Bank of China gained 0.8%, while ICBC rallied 1.1%.

HSBC was 0.6% stronger.

Mobile phone carrier China Unicom was the major mover, jumping 7.6% on the back of a broker upgrade from Deutsche Bank.

China Mobile, the largest carrier in the country, was 0.2% stronger.

It wasn’t just mobile carriers doing well, with fixed line telco China Telecom 3.3% above the gain line.

Internet service provider Tencent put on 1.9% following news a rival beat expectations.

Cathay Pacific, Hong Kong’s official airline, rallied 2.1% after saying it would invest in Air China’s cargo unit.

Oil producers Cnooc and PetroChina added 1.2% and 1.6% respectively.

On the last day of reporting season local shares edged 1% higher at the close, on the back of a string of upbeat earnings from blue chip companies. Despite the rise today, the market finished virtually exactly were it started the week.

The miners and the banks were the main drivers for gains, while a loss to QBE was balanced by a strong performance from Woolworths.

At the end of the day, the All Ords was up 36.2 to 4,651.1, while the ASX/200 added 43.6 to 4,637.7. Over 2.6 billion shares worth around $7 billion had changed hands.

The Banks and Financials sector was 1.3% higher, with ANZ the standout among the big four banks, its shares rose 89c, or 4% to $23.14 after announcing a better-than-expected four month result of $1.6 billion profit.

NAB was close behind, up 75c, or 3% to $25.44, while the CBA and Westpac rose 1.4% and 1.7% respectively.

Over among the insurers, QBE countered with a 7% slump to $21.34. QBE announced a modest 6% increase in net profit to just under $2 billion, below expectations.

AMP put on 8c, or 1.4% to $5.94, while Macquarie Group eked out a 6c gain to $45.26.

Property Trusts gained 0.8%, led by sector heavyweight Westfield, which rose 21c, or 1.8% to $12.02.

Despite heavy losses in base metals prices overnight in London, an uptick in the US commodity outlook helped our Materials and Resources sector to a 0.6% gain.

BHP Billiton and Rio Tinto were both up 1.6% to $41.10 and $70.50 respectively, while Australia’s third-largest iron ore producer Fortescue also added 1.5%.

The gold miners bounced back from yesterday’s heavy sell-off. Lihir Gold was up 7c, to $2.65, while Newcrest put on 59c, or 1.9% $31.34.

Macarthur Coal officially declared its hand in its bid for Gloucester Coal, with its shares putting on 16c, or 1.6% to $10.20.

Energy stocks were more mixed, with the sector down 0.3% as it paced a decline in crude oil prices.

Sector major Woodside tacked on 27c, or 0.6% to $43.37.

Whitehaven continued its volatile run, down 23c, or 4.7% to $4.65 as it struggles to find fair value. Its shares were trading as high as $5.33 on Monday, and $4.45 the prior Monday.

Origin Energy shares rose 31c, or 1.9% to $16.81. Many of the larger broking houses kept a neutral view of the stock, although with a higher target price than being currently seen.

Oil Search and Santos were down 1.1% and 0.4% respectively.

Among Consumer Staples stocks Woolworths rallied $1.39, or 5.5% to $26.84. The retailer announced a $400 million share buyback plan this morning.

However, investors weren’t shifting their shares from rival Wesfarmers, which dipped just 0.1%. Coca-Cola was 1.2% stronger.

The sector was 1. 9% stronger, while among the Consumer Discretionary sector, it was also a mixed bag.

Harvey Norman outperformed on what was a generally disappointing day for the retailers.

It shares rose 6c, or 1.6% to $3.83 after announcing a 59% climb in half yearly net profit to $158 million for the six months to 31 December. In a reminder of how strong 2007 was, Harvey Norman’s profit then was $230 million.

Meanwhile Billabong lost 22c, or 2.1% to $10.17.

Crown shares rose 17c, or 2.2% to $8.00. The gamer reported a profit of $115.3 million.

Elsewhere, Fairfax was down 4.5c, or 2.7% to $1.65.

The sector dipped 0.2%.

The Industrials sector was 0.4% lower. Toll lost 30c, bringing its two day losses to 22.3%.

Leighton tacked on 23c, or 0.6% to $37.70, while MAP was up 7c to $3.12.

The normally popular Bradken slumped 23c, or 3.4% to $6.48.

Media group Salmat, up 7.7% at lunch, trimmed gains but sill finished 3.7% above the line.

Telstra gave up some of yesterday’s gains. Its shares were down 4c, or 1.3% to $2.97. The broader Telecommunications sector was down 1.0%.

Utilities giant AGL Energy rose 4.1% to $14.37 after reporting its underlying profit had climbed 22% in the six months to 31 December.

The sector rallied 2.4%.

Around the region, the Nikkei 225 was up 49.5 to 10,151.5, while the NZSE50 tacked on 4.4 to 3,156.1. The Straits Times Index dipped 3.7 to 2,745.5. The Hang Seng put on 259.9 to 20,659.5

Spot gold was trading at US$1,107.75 per ounce, while the Aussie was buying US$0.8897.

AGK underlying profit climbs 22%
AGL Energy said its statutory post-tax profit was down 88.9% to $183.7 million for the six months to 31 December 2009. At the same time, AGL has reaffirmed full-year earnings guidance for underlying NPAT of between $390 million to $420 million despite mild temperatures in southern states.

At the end of the day, AGL Energy shares were trading up 57c to $14.37.

Harvey Norman posts $158m HY profit
Harvey Norman this morning said its profit for the half-year to 31 December had soared 59% to $158 million, although remained well down on the $230 million profit in 2007. Profit for the half-year to 31 December had climbed 46.8% to $237.77 million, the company said.

By the close, Harvey Norman shares were trading up 6c to $3.83.

Crown back in black
Crown said its profit for the six months to 31 December 2009 had jumped 128.1% to $115.3 million, with revenue remaining steady at $1.19 billion. Last year the group posted a $409.7 million loss on the back of asset write downs, especially in the US market.

At the finish, Crown shares were trading up 17c, to $8.00.

QBE earnings disappoint, shares slump
QBE Insurance Group posted a modest 6% increase in net profit to $1.97 billion for the year ended 31 December 2009. QBE said that the strengthening Aussie dollar and continued low interest rates had adversely impacted the company’s reported profit, and would continue to do so.

At the end of the day, the result disappointed investors with the share price slumping $1.60 to $21.40.

Woolworths HY10 profit tops $1bn
Woolworths reported a post-tax profit up 11.4% to $1.095 billion for the 27 weeks to 3 January 2010. The retailer also announced it would recommence its capital management program, investing $400 million in a share buyback.

By the finish, Woolworths shares were trading up $1.39 to $26.84.  

ANZ 4 month profit hits $1.6bn, up 16%
Australia and New Zealand Banking Group this morning reported a 16% jump in post-tax profit for the six months to 31 January of around $1.6 billion, 16% higher than the previous corresponding period. At the same time the New Zealand stock exchange said that the bank there had requested a trading halt pending a material announcement.

At the final whistle, ANZ shares were trading up 89c to $23.14.

Nexus posts $21m profit, coy on future
Nexus Energy Limited (NXS) posted a six-month profit of $21 million to the end of 31 December 2009 against a $68 million loss in the previous corresponding period. Surprisingly however, the company declined to forecast any results for the next six months or any other prospects, saying that the “directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the consolidated Group.”

At the end of the day, Nexus Energy shares were trading up 0.5c at 23.5c.

Minara swings to a $48.5m profit
Minara Resources Limited (MRE) reported a profit of $48.5 million for the year ended 31 December 2009, against a loss of $19.8 million for 2008. Minara, which 60% owns and operates the Murrin Murrin nickel cobalt joint venture project in Lenora WA, said the result was driven by record production of 32,977 tonnes of nickel and 2,350 tonnes of cobalt.

By the finish, Minara Resources shares were down 0.5c at 69.5c.

Nexus Energy Limited (NXS) posted a six-month profit of $21 million to the end of 31 December 2009 against a $68 million loss in the previous corresponding period. Surprisingly however, the company declined to forecast any results for the next six months or any other prospects, saying that the “directors believe, on reasonable grounds, that the inclusion of such information would be likely to result in unreasonable prejudice to the consolidated Group.”

The company did make a small concession, saying their capacity for new ventures was ‘limited’ anyway.

Looking at the results for the six months, sales revenue from the Longtom project came in at $9 million, while expenses incured around entitlements flowing from redundancies and other staff cost-cutting was $7 million.

Meanwhile, reviewing operations, the company said it had completed the development of the Longtom gas project in the Gippsland Basin, in the waters off Victoria.

”The Longtom gas project is expected to provide Nexus with stable cash flow over the next ten plus years on the back of a Gas Sales Agreement to supply Santos Limited (Santos) 350 PJ of gas,” the company said.

The board said it would not pay an interim dividend.

At 1531 AEDT, Nexus Energy shares were flat at 23c.

Minara Resources Limited (MRE) reported a profit of $48.5 million for the year ended 31 December 2009, against a loss of $19.8 million for 2008. Minara, which 60% owns and operates the Murrin Murrin nickel cobalt joint venture project in Lenora WA, said the result was driven by record production of 32,977 tonnes of nickel and 2,350 tonnes of cobalt.

CEO Peter Johston said the result was strong in a volatile market.

”We have recorded a good profit, delivered record production, continued to reduce costs across the business and increased our cash reserves,” Mr Johnston said.

Mr Johnston also said that it was a year of consolidation for the company as it focused on safety, production and costs.

“In 2010 we will continue to focus on all the fundamentals and explore opportunities for growth,” Mr Johnston.

Minara said the opportunities would include both the expansion of the Murrin Murrnin mine, as well as external opportunities in Nickel and other base metals.

The company said it was in a strong position, financially, with no debt and cash on hand of $247.1 million at the end of last calendar year.

At 1502 AEDT, Minara Resources shares were down 0.5c at 69.5c.