The market gave ticks to Leighton’s better than expected result, Coca Cola Amatil’s 2008 result and outlook, James Hardie, despite more glum news from the US housing sector, but passed on Paperlinx’s update.
Leighton, which has been battered by falling markets in Asia and the Middle East, as well as the mining slump, yesterday revealed a 56% plunge in first half earnings after writing down the value of listed investments as it said it would do in an earlier update.
Net profit fell to $110.1 million in the six months to December 31 from $250.3 million in the same period of 2008. Directors described the result as "disappointing".
But the results were higher than a forecast of about $100 million released by Leighton early last month.
“The reduction in profit is entirely due to a A$239 million pretax write-down of investment values in Connect East, RiverCity Motorway, BrisConnections Unit Trust, Devine Ltd. and Macmahon Holdings Ltd. and a reduced property development contribution,” Leighton said in the statement to the ASX.
"The Group reported a robust operating result before impairments for the period of $387 million before tax, up 20% on the previous year.
"The operating result reflected good contributions from the construction of infrastructure projects in Australia, the contract mining of iron ore and coal in Australia, and construction in the Gulf region through the 45% stake in the Al Habtoor Leighton Group," Leighton said.
Leighton shares jumped 8.5% to $18.98. They closed up 6% at $18.56. The company forecast full-year profit of $480 million, down 21%, on revenue of A$19 billion.
First half revenue surged 40% to $9.15 billion. It will pay an interim dividend of 60 cents, unchanged from a year ago.
"At 31 December 2008, the Group’s work in hand was $37.5 billion. This compares with $30.3 billion at 30 June 2008 and $26.7 billion at 31 December 2007.
The order book was boosted by the award of some $14 billion worth of new work, extensions and variations during the period and movements in the currency," Leighton said.
Coca Cola Amatil (CCL) shares ended up 13 at $8.51, after touching $8.85 cents during trading yesterday.
That hasn’t regained all of the losses after the proposed Lion Nathan bid fell over at the start of the week, but it did show how short-sighted most of those who sold out were ahead of a solid full year result and higher dividend.
And, CCL’s CEO, Terry Davis, reminded them again yesterday of why the Lion bid failed.
He reportedly told a press conference that the bid was "$1 billion" short and that Lion had not wanted to be flexible, continuing the war of words with its suitor and its CEO, Rob Murray. The shares eased after his comments became known.
That was after CCL had told the market that its core beverages operations had had a strong start to calendar 2009 after reported a 24.2% rise net profit for 2008 of $385.6 million.
Profit before significant items was $404.3 million, up 10.4 per cent for the 12 months ended December.
The company said that Australia had experienced a very hot summer in January in many parts of Victoria, South Australia and NSW. (as we all know, especially in Victoria and South Australia and much of NSW)
"As a result, CCA’s Australian beverage business has seen well above average demand and has delivered high single-digit volume growth for the first six weeks of the new year," the company said.
In January, CCA lifted prices 5% across its product portfolio in Australia to fully recover increases in the cost of goods.
CCA said that over the last six months, demand in restaurants and cafes had softened, but this had been offset by increased demand in fast food outlets and convenience stores.
"CCA’s other beverage operations have also experienced a strong start to the year, and SPCA has also delivered record sales for the first six weeks of the new year," the company said in its release to the ASX.
"CCA is well placed to take advantage of opportunities that may arise as a result of the changed market conditions and will provide a first half 2009 trading and profit update at CCA’s annual general meeting on May 22."
The company boosted its final dividend to 22 cents from 20 cents a year earlier. That made a total for the year of 39 cents a share, up from 35.5 cents. The higher dividend was well covered by earnings per share of 54.9 cents (48.8c) from continuing operations.
Like Boral, building materials group James Hardie has again been hit by the slumping housing sectors on both sides of the Pacific, but especially in the US.
Hardie recorded a drop in net operating profit in the first nine months of fiscal 2009, and says it expects the weaker market conditions to continue.
But the company’s shares rose 10% to $3.65.
Net operating profit for the nine months was $US89.7 million ($A136.6 million) down 43% on the $US156.8 million in the previous corresponding period.
Third quarter net operating profit was $US16.5 million, down more than half (56%) on the corresponding period last year.
Reported net profit including asbestos, ASIC expenses, asset impairments and tax adjustments for the nine months was $US265.9 million ($A405.1 million), up from $US75.3 million in the previous corresponding period.
The operating results were significantly affected by the continuing fa
