Gross operating profits increased by a seasonally adjusted 18.9% during the June quarter, according to the latest business indicators released by the Australian Bureau of Statistics.
The figures show sales of goods and services (manufacturing) fell by 6.9%, while wolesale trade fell by 2.7. Inventories also fell by 0.5%, while wages and salaries grew by a seasonally adjusted 2.2% during the quarter.
The result comes after an AAP survey of economists predicted inventories would rise by 6.7% in the June quarter. Analysts are now awaiting the release of official GDP data, due out tomorrow.
Westpac said in a statement the results were a “mixed bag”, and noted the country is “enjoying a sizeable boost to national income from a sharp rise in the terms of trade as iron ore and coal prices rebounded sharply”.
Meanwhile, Centro Retail group has recorded a $113.3 million net profit for the year to 30 June, following from a $2.7 billion loss recorded during the previous corresponding period.
Underlying profit was down 14% to $160 million, which the company said was due to a strong Australian dollar and lower income.
“CER will again face considerable challenges in the 2011 financial year as it embarks upon a restructure and recapitalisation,” chief executive Robert Tsenin said in a statement.
He added the company now has an over-hedged US dollar position, due to impairments on Super LLC investment – a joint venture between Centro and a trust covering shopping centres in the US.
“CER now faces a major risk with the first of the remaining five outstanding hedge contracts.”
Gold miner Kingsgate Consolidated has more than doubled its net profit for the year to $73.07 million, with revenue also up 54% to $114.09 million.
“Current drilling has indicated that there is still potential to increase the open pits, particularly at current gold prices,” Kingsgate said in its financial report.
“In addition there will be an increased focus on deeper drilling to test underground mining potential of the project…Several mineral exploration licenses are in the application stage and when granted at least five drill ready targets will become available for drilling,” Kingsgate said.
The Australian sharemarket has opened nearly 2% higher this morning, following a speech from US Fed chairman Ben Bernanke last week in which he noted the reserve would be willing to stimulate the American economy again if needed.
The benchmark S&P/ASX200 index was up 80 points or 1.84% to 4450.7 at 12.20 AEST, while the Australian dollar opened above US90c this morning following Bernanke’s remarks.
AMP shares rose 2.4% to $5.07, while Commonwealth Bank shares also jumped by 2.6% to $50.51. Westpac rose 2.3% to $22.25 as ANZ gained 2.4% to $22.97.
In the mining sector, Santos has signed a deal with Texas group Apache Energy to produce gas for the Halyard and Spar fields offshore in Western Australia.
“Production from the combined development is expected to come online at an initial gross rate of 50TJ (terajoules) per day and is then expected to increase to over 100TJ per day by early 2013,” Santos said in a statement.
“The gas fields are perfectly positioned to be developed by tying them back to an existing gas hub at Varanus Island,” Santos’ vice president WA and Northern Territory, John Anderson also said.
As reported by The Australian, Asciano is bidding for a West Australian rail contract with CBH Group.
“CBH have broken up the rail task into three parcels and we’re pitching for all of those parcels at the moment,” Asciano managing director Mark Rowsthorn told the publication, with the company hopeful of winning the three parcels.
BHP Billiton chief financial officer Alex Vanselow has said the $44 billion takeover bid for Potash is not a turnaround from its previous caution on spending.
“We are opportunistic. When an opportunity presents itself we have to take advantage of it,” Vanselow told ABC’s Inside Business.
“We’ve been optimistic in the long-term form the beginning. But we’re cautious on the short-term,” he added. “When we look at an asset like Potash Corp, we’re looking at the long term… in the long term we’re very positive on where the world economy is going.”
In the United States, president Barack Obama has once again warned about a double-dip recession, saying the economy is growing too slowly.
“The economy is still growing, but it’s not growing as fast as it needs to,” Obama told NBC in an interview. He believes Congress should pass legislation to help small businesses looking to spend more.
“We should be passing legislation that helps small businesses get credit, that eliminates capital gains taxes so that they have more incentive to invest right now,” he said. “There are a whole host of measures we could take. No single element of which is a magic bullet.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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