GPT, Crown and OZ Minerals produced big losses Friday.
Woolworths did OK, brilliantly in its heartland businesses, the Australian supermarkets and liquor chains, not so good in New Zealand and in consumer electronics like Dick Smith and Tandy, which are being revamped.
Competitor, Harvey Norman reported a sharp drop in earnings as the business was hit by recessions in New Zealand, Ireland and the slowdown in Australia.
But more than $11 billion was lost on Friday, a day after some $6 billion was lost by the likes of Westfield, Lend Lease and Centro.
Late Friday night troubled property group, Valad reported loss of $821 million for the first half after big write-downs.
Overall, it was the worst reporting season for six years, according to the AMP.
Analysts now forecast profits for the June 30 year will be down 12% compared with 2008 (which will prove to have been the peak year for many companies, especially in resources).
Not only did we see huge asset write-downs among banks (before they report), resource stocks, media and property groups, but many companies in these sectors have raised new capital in a spate of issues.
Qantas, Lend Lease, Westfield, Stockland, the AMP, Newcrest Mining, Fairfax (controversially last week), News Corp (via a $US1 billion debt issue), Mirvac, Wesfarmers and CSR are among the well known names to be forced to approach shareholders as banks turned off the debt tap, or got tough on lending arrangements and wanted to see more capital.
Bloomberg estimated the fund raisings at $5 billion (but there were more in the closing months of 2008 as smart companies got in early when another $6 billion or more was raised).
As well dividends cut by the likes of Qantas, Wesfarmers, Lend Lease, Fairfax (and the ANZ warned), Suncorp Metway, Insurance Australia Group and others.
Estimates put the cuts at $2 billion; $2.5 billion if the ANZ’s 25% chop is included, even though it won’t happen for a couple of months.
Some small companies, like Specialty Fashion Group dropped payments completely.
GPT posted a full-year loss of $3.25 billion after writing down property values.
OZ Minerals, the world’s second-largest zinc mining company, a $2.5 billion full-year loss after slashing the value of mining assets and soliciting a face saving takeover offer from China to try and survive. It won a month’s extension from its banks to allow the Minmetals bid to be approved or knocked back by Canberra.
Babcock & Brown Capital reported a $1.43 billion loss, mainly to write down the value of goodwill at its Eircom Group telco unit in deeply depressed Ireland.
Paperlinx, Australia’s largest paper maker said it incurred a loss of $560.9 million in the first half as the global recession curbed sales and it a one- time charge for a loss on the sale of its Australian Paper unit. The company has been close to being placed in the hands of its banks.
James Packer’s Crown had a first-half loss after writing down its overseas investments by $547.5 million.
Australian property developers Westfield, Centro Properties Group and Lend Lease Corp. reported over $5 billion in losses on Thursday.
Citigroup’s Australian equity strategist, Robert Buckland believes share prices won’t rebound in 2009 and in fact could face future downward pressure as people reassess equities as an asset class, an equity strategist says.
He told the ABC TV program Inside Business yesterday that outlook for a general rise in share prices this year was "difficult" as corporate profitability halves from peak to trough.
The peak of corporate profitability was in 2007, with Citigroup estimating the bottom of the profit cycle will be reached in 2010, Mr Buckland said.
"We are probably down about 20% so far, so we’ve got a lot further to go," he said.
"I think it’s going to be very difficult against global equity markets, against that corporate profits backdrop."
The AMP’s Dr Shane Oliver said that with the worst profit reporting season in at least six years now essentially wrapped up, profits look to have fallen by around 3% over the year to the December half last year.
"The last week has seen results take a turn for the worst with now only 28% of results coming in above expectations and negative surprises running above that of the August reporting season at 33% of results despite the high level of pre-announcements.
"Dividend cuts were a key theme throughout this profit reporting season with nearly 40% of companies either cutting or eliminating dividends, reflecting both uncertainty about the outlook and a desire to conserve capital and pay down debt.
"As a result aggregate dividends look to have fallen by around 15% over the year to the December half.
"Other themes from the reporting season include downwards pressure on margins reflecting the tough economic environment, significant asset write downs and cautious and in many cases non-existent outlook statements.
"Consensus earnings expectations for the 2008-09 financial year were revised down by around 7 percentage points to a fall of around 12%, but still factor in a gain of around 5% in 2009-10.
"More downgrades look likely though with a total fall in earnings of around 20 to 30% a more reasonable expectation for this year."
The best sectors were probably health care and consumer staples, the worst were energy and real estate.
The worst in the coming half will be resources (coming off the enormous June half for most of them a year ago), the media as advertising falls further and real estate as more losses are incurred, especially in commercial property.
The bank reporting in April will be of interest, as will other March 31 companies like
