A mixed collection of trading updates issued yesterday through the ASX.
Brambles Ltd, the pallets supplier and information management company, says it expects revenue for 2009-10 to be flat compared with 2008-09.
Margins appear under pressure and the company’s important US pallets business is still struggling.
The company’s shares eased 12c, or 1.6%, to $7.13 in yesterday’s sell-off.
Brambles said in a market update that it expects group sales revenue for the 2010 financial year to be "broadly in line with the prior financial year on a constant currency basis".
It also said it sees a 3% fall in pallet volumes at its CHEP USA business, the same as guidance given at the company’s half-year results presentation in February.
"As a result of conditions in CHEP USA, CHEP Americas is yet to experience an improvement in operating profit margins compared with the first half of the 2010 financial year," Brambles told the ASX.
Brambles said sales revenue for the nine months to March was down 1% from a year ago.
"This reflected the slow rate of economic recovery in major operating regions such as the USA, UK and Spain as well as the impact on CHEP USA of business lost in the last quarter of the 2009 financial year and the first quarter of the 2010 financial year," the company said.
CHEP America’s sales revenue fell 4% in the nine months to March, with CHEP USA ”yet to experience an improvement in organic volumes” despite winning new business.
Brambles chief executive, Tom Gorman, said the company was in a strong financial position and the comparable trading performance was ”gradually improving”.
”Brambles remains well-placed to benefit from broad-based recovery when it occurs and continues to focus on pursuing profitable growth opportunities,” Mr Gorman said in the statement.
”However, the impact of these wins has been insufficient to offset the impact of customer losses experienced in the last quarter of the 2009 financial year and the first quarter of the 2010 financial year,” Brambles said.
Sales were flat at CHEP Europe, Middle East and Africa, with net new business offset by declining organic volumes due to subdued economic conditions.
CHEP Asia-Pacific sales revenue rose by 4%, which Brambles said reflected the resilience of the Australian economy, net new business wins and strong growth in the developing markets of China and India.
And shares in scrap metal group, Sims Metal Management rose more than 2% in yesterday’s sell-down, to close with a nice 46c a share gain.
The shares ended up 2.6% at $20.88, after the group said it expects to again boost earnings in the 4th quarter.
"Absent a significant decline in commodity prices from its third quarter, or adverse global economic developments, the Company expects sequential earnings growth in its fourth quarter," Sims said in a statement to the ASX.
Sims reported that third quarter net profit was $30.4 million while revenue for the three month period was $1.6 billion.
For the nine months to March, revenue fell 31% from the prior corresponding period and net profit was $70.4 million.
"Notwithstanding recent volatility and commodity price declines, global trading conditions for both ferrous and non-ferrous commodities generally improved from the end of the second quarter of fiscal 2010.
"The Company was a judicious seller of ferrous scrap in its third quarter, as evidenced by the 500,000 tonne difference between intake and shipments.
"Sims Metal Management has increased scrap intake in its fourth quarter despite pricing dislocations.
"The recent improvement in intake, particularly in North America, is subject, longer term, to economic recovery and stability in the markets in which the Company operates and trades," the company said yesterday.
Oil and gas producer Santos says it expects production in 2010 to be slightly below its original forecast as a result of floods.
"In the short term, 2010 production is expected to be in the range of 49 to 52 million barrels of oil equivalent," Santos chief executive, David Knox, told shareholders at the company’s annual general meeting in Adelaide yesterday.
"This is slightly below our original forecast for the year due to the floods in central Australia and Queensland impacting our Cooper Basin activities.
"We continue to make substantial progress on GLNG (Gladstone LNG development) – it is a transformational project."
Santos chairman, Peter Coates, told shareholders that Santos was well placed to capitalise on growing demand for energy from Asia and Australia, "provided taxation policy does not interfere with our investment plans".
"Our assets in eastern Australia, the Cooper Basin and Western Australia provide excellent further opportunities, and our Asian acreage presents scope for growth."
Mr Coates said Santos was well positioned to take advantage of future growth in demand for LNG, with four world-class projects in the company’s portfolio: Darwin LNG, PNG LNG, GLNG and Bonaparte LNG.
<
