Wednesday it was Rio Tinto reporting on the impact bad weather had on its Queensland coal operations in the first quarter; yesterday it was oil and gas producer Woodside Petroleum with a similar message, but on the other side of the continent.
Cyclones off the West Australian northwest coast mean the company reported lower production and sales for the first quarter of 2008. This was compounded by shut downs and lower output from maturing fields.
Production for the three months ended March 31 totalled 17.2 million barrels of oil equivalent (MMboe), down 4% from the first three months of last year. Sales fell 1% to 17 MMboe.
But revenue rose 22% to $1.09 billion in the latest quarter because of the surge in world oil prices, but was down on the December quarter’s $1.171 million because of lower output.
‘Strong performance from the Stybarrow field, reinstatement of production from the Corallina field and the ramp up of Otway production only partially offset the production impact of tropical cyclones off the north-west coast of Australia, the Karratha gas plant shutdown in January and natural field decline of our mature oil fields during the first quarter,’ Woodside said in the statement to the ASX.
Production was also impacted by remedial work at the Enfield and Mutineer-Exeter fields, off the WA North Coast and the 2007 sale of non-core assets, Legendre and the Chinguetti field offshore West Africa.
Woodside shares jumped sharply yesterday as world oil prices soared past $US115 a barrel in New York trading on less than expected stocks figures for the US.
WPL shares finished 99c higher at $59.29 after hitting an all time high of $59.44 in trading during the day.
Shares in Cons Rutile (CRT) fell 8% yesterday after the company revealed an earnings downgrade.
The mineral sands miner told the ASX that it now expects profit after tax in 2008 to more than halve to between $7 million and $9 million. Profit after tax was $20.5 million in fiscal 2007.
The shares fell 3.5c to 37c, just above the 52 week low of 36c.
The company said rutile and zircon output is expected to decline nine per cent in 2008 as the company mines an area of lower mineralisation, CRL chairman David Robb told the AGM yesterday.
Production costs will rise because of the pressure of the resources boom on the tight labour market in South East Queensland and on costs for the mining industry generally.
Mr Robb said the profit forecast was based on an exchange rate of 90 USc per Australian dollar.
The company is a subsidiary of the larger producer, Iluka Resources.
Production over the next two to three years is expected to fall because the Yarraman and Enterprise mines, on North Stradbroke Island off Brisbane, will be mining lower grade areas.
Shares in paint group, Wattyl Limited fell more than 16% to a 52 week low yesterday after the company downgraded its 2008 and second half profit.
The shares fell 32c to touch the low of $1.555, before edging up to close at $1.655.
The news of the downgrades makes Wattyl a victim of the building industry slowdown, especially renovations which have been tending lower for the past five months.
The company told the ASX in an update that "market conditions remain difficult with trading for the 3rd quarter of the financial year 2007/08 below last year.
"We anticipate these conditions continuing into the next quarter and expect the second half year EBIT performance for the continuing operations to be in the range of $10 to $12 million, compared with $12.8 million reported for the first half year.
"Despite the difficult market we continue to drive specific sales initiatives, particularly in the area of major projects and our own store network; and maintain strong cost control across the business.
"We are also completing a number of important projects including: • Implementation of a refreshed Brand Strategy; • The launch of our new interior broad wall offering and exciting new point of sale colour system in the first half of the next financial year; • Strengthening of our own store network; • A full review of our distribution costs and efficiency; and • Further cost initiatives
"We are confident that on completion of these projects, Wattyl’s business platform will be strengthened and well positioned for improved market conditions."
