| EGN | Fabrication underperformance, early return of lease locomotives, decline in mining business, margin pressure and writedowns to see NPAT loss of $11m. | Company report |
| EGN | Elph Pty Ltd (announces that following an approach from the independent directors of Engenco Limited (Engenco), Elph will make an all cash unconditional bid to acquire all of the issued shares in Engenco for 18 cents cash per share (Bid). Elph currently holds a 37.6% shareholding in Engenco. The Bid will give Engenco shareholders, including those who do not wish to participate in the replacement 3 for 2 renounceable entitlement offer at 15 cents per share announced, an alternative option to exit their investment at a price greater than the price under the Entitlement Offer. The Bid will be implemented through an off-market takeover offer for current and new shares in Engenco. The Entitlement Offer at 15 cents follows a substantial earnings downgrade by Engenco.. Elph continues to support the Entitlement Offer as sub-underwriter. The Bid is proceeding on the basis that it applies not only to existing shares, but also extends to all new Engenco shares which are issued under the Entitlement Offer. This allows Engenco shareholders to take up their entitlements at 15 cents per share under the Entitlement Offer and accept into the Bid at 18 cents per share if they so wish. As stated above the Bid will be unconditional. The Bid consideration will be fully funded by Elph from its current internal resources. The Bid values Engenco at $56 million on a post Entitlement Offer basis. | Company report |
| KAR | KAR set to commence drilling of its first Santos Basin exploration well, Kagaroo-1 | Company report |
| BDR | significant drill results from Hanging Wall Load at Duckhead Deposit in Tucano Brazil. A hgih grade starter open pit has been designed totalling 62kt @ 29.7g/t Au for 59koz. Exp revenue $100m with total operating costs less than $10m. | Company report |
| TME | Trade Me has entered into an agreement to purchase the Richmond-based accommodation website Holiday Homes (www.holidayhomes.co.nz). A due diligence process has been completed, and a sale and purchase agreement was signed today. Holiday Homes provides a directory of holiday homes, baches, and cribs around New Zealand and the South Pacific. It also lists activities and service providers close to accommodation providers. | Company report |
| IRN | IRN have provided the Philippine Government with an updated development plan that outlines the potential for commercial production to commence in 2019.The Tampakan Mine Project Feasibility Study, submitted to government in 2010, had targeted first-production in 2016. | Company report |
| US | The US Fed stated it would introduce new asset purchases to replace its current stimulus program known as Operation Twist, which ends this month. For the first time, the Fed has announced a goal for the unemployment rate. It anticipates that it will keep interest rates extremely low until the unemployment rate falls to 6.5% as long as inflation doesn’t get out of control. “QE3” involves $85B per month in added monetary stimulus, including “Operation Twist” = swapping long term Govt paper for long term, to keep long term rates low (long term interest rates are more important for the US economy than Australia due to the structure of loans in the US) The Fed has reiterated its QE3 strategy for an indefinite period. The Fed has indicated that it could increase the level of monetary stimulus if conditions warrant. The US Fed is also mindful of the long term negative effects of ongoing QE stimulus. The Fed has changed its time frame – previously it was to keep rates low “at least through mid-2015”. This has now been changed to “at least as long as the unemployment rate remains above 6-1/2 percent”. The US unemployment rate is currently 7.7% (red line in chart) and if the current trend continues it will around 15 months before the US unemployment improves to 6.5%. In a broad sense, while “mid-2015” and “unemployment 6.5%” are similar time frames, the US Fed has now given itself greater flexibility and more clearly identified its objective. | Shaw |
| AQA | signalled its intention to begin settlement of a dispute, launched earlier in the year, with joint partners Coal International and American Metals regarding the West Pilbara Iron Ore Project | The Australian |
| EGP | New chief executive of Echo Entertainment Group John Redmond said the casino operator would not be losing focus on the “middle market” of its customer base saying all levels of clientele were of equal importance to its overall operations | Age |
| WBC | Westpac has performed well in 2012 with a further increase in earnings and dividends – a result built on many years of hard work and dedication by the management team. On financial performance, cash earnings, our preferred measure of performance, was up 5% while cash earnings per share were up 3%. Of course an area the Board places much emphasis on is dividends, and this year we increased dividends by a solid 6% to $1.66 for the year. These payments translate to a very strong dividend yield of almost 7%, and when franking credits are taken into account that yield rises to almost 10%. The final dividend of 84 cents will be paid next week on the 20th of December. The benefits of a stronger financial position and improved earnings have also been reflected in the total returns for shareholders. At our AGM last year the share price was $20.84 while the price closed at $25.90 yesterday – that’s an increase of 24.3% over the year. Adding in dividends that is a total return of 29.5% – a level that has led the sector. | Company report |
| LEP | in order to terminate its CPI hedging, ALE Property Group paid the hedge counterparty a termination amount of $83.5 million comprising the hedge’s CPI escalation amount and the independently calculated mark-to-market amount. In that announcement, ALE also stated that it was disputing a claim by the hedge counterparty that an additional amount of $29.7 million is payable in respect of the mark-to-market amount. ALE advises that ANZ Banking Group Limited (ANZ) has initiated formal proceedings in the Supreme Court of New South Wales in respect of the disputed additional amount of $29.7 million. The initial directions hearing is set for 1 February 2013. ALE believes ANZ’s claim has no merit and will take all appropriate steps to strongly defend its position. As previously advised, ALE made allowance for this claim as part of the recent capital raising and accordingly holds adequate cash reserves. | Company report |
| SLR | Silver Lake Resources is pleased to announce assay results from ongoing exploration at its Mount Monger Operations. Silver Lake is targeting to increase production from the Mount Monger Operations to 200,000 ounces per annum by 2014 via mining from multiple underground and open pit ore sources. Silver Lake’s Mount Monger Operations have a current JORC resource of 7.1 million tonnes at 7.4 g/t for 1.7 million ounces of gold. Assay results included: 3.0 metres at 17.5 g/t Au (including 1.0 metre at 45.9 g/t Au). Potential for 2 previously mined open pits to become one large open pit followed by an underground mine. Metallurgical test work commencing. Infill drilling planned followed by mining study. Project is outside of current base case production plan at Mount Monger. Mineralisation remains open to the south and at depth | Company report |
| AQA | Rothschild delivers A$150 million final determination of Fair Market Value for Aquila’s 24.5% Venture Interest in the Belvedere Hard Coking Coal Project. The parties can now move towards completion of the exercise of the option and receipt of the sale proceeds by Aquila | Company report |
| AGI | strong sales have continued in the Company’s core domestic markets of New South Wales and Queensland. Based on internal (unaudited) management accounts for the 5 months ended 30 November 2012 and an estimate for the month of December, the Company now expects to report profit before tax for the 6 months to 31 December 2012 of approximately $28 million, an increase of 49% on the $18.8 million in the pcp. | Company report |
| MRM | MRM’s 50% owned subsidiary, Toll Mermaid Logistics Broome (“TMLB”), has won a $20m contract with INPEX to develop infrastructure and provide various services at its Broome Supply Base. The contract is for an initial 5-year term, with two 5-year extension options. TMLB will support the development of drilling activities for the INPEX operated Ichthys LNG Project. TMLB is a 50/50 joint venture between MRM and Toll Holdings (TOL). | Shaw |
| NMS | Neptune Marine Service is pleased to announce the signing of a framework agreement with BP in the UK to provide subsea engineering services and support. This contract is a significant milestone for Neptune in the UK, signifying the first agreement of this kind with a major subsea operator in the region | Company report |
| NMS | Neptune Marine Services received a proposed takeover offer from Blossomvale Investments. Blossomvale is a substantial shareholder of Neptune and a wholly owned subsidiary of MTQ Corporation Limited (MTQ) and its proposal is to acquire all the shares of Neptune it does not own, at a cash price of 3.2 cents per share. MTQ is listed on the Singapore Exchange. The proposed offer is conditional on MTQ shareholder approval and several other conditions | Company report |
| ILU | ILU’s sales of mineral sands for 2012 will be lower than expected as slowing global growth continues to weigh on demand. The company expects to report total sales of about 475,000 metric tons in the 12 months to Dec. 31. In July, it had forecast sales to be in a range of 510,000 tons to 720,000 tons. “Market conditions for Iluka’s mineral sands products remain challenging…[with] lower demand associated with low global economic activity and fragile business confidence levels,” it said in a statement. Iluka also said zircon sales will be at the bottom end of its previously advised guidance of 200,000 tons to 300,000 tons, coming in around 205,000 tons. Iluka is the world’s largest producer of zircon, widely used in ceramics. | iress |
| BHP | BHP Billiton will invest US$520 million in a facility in Australia’s Victoria state that will help strip out carbon dioxide from natural gas produced at its offshore Turrum development. BHP and joint-venture partner ExxonMobil aims to build the facility ahead of first production of natural gas at Turrum in 2016. The facility–known as the Longford Gas Conditioning Plant–is being designed to process around 400 million cubic feet of natural gas per day, and lower the carbon dioxide content of treated gas to less than 3% | Company report |
| FMG | Fortescue Metals Group is pleased to announce an increase in the Iron Bridge deposits of 2.0 billion tonnes (bt), taking the total Resource for the Iron Bridge Project to 5.2 billion tonnes (bt) at an Fe grade of 30.4%. The FMG Iron Bridge development (88% FMG 12% Baosteel) is located 100 kilometres south of Fortescue’s Port Hedland operations and is within 25km of the company’s existing rail line (refer Figure 1). | Company report |
| GXY | Galaxy Resources advises it has extended the date within which cornerstone investor East China Mineral Exploration & Development Bureau (“ECE”) has to complete due diligence on the Company. Galaxy was to complete a capital raising of A$81 million at A$0.50 per share. Tranche 1 has been completed and funds have been received by the Company. Tranche 2 comprises the subscription for 132.4 million Galaxy shares by ECE, for gross proceeds of A$66.2 million. The Tranche 2 placement is subject to due diligence by ECE, regulatory approval. ECE has completed financial and legal due diligence. However, ECE’s site visit to Galaxy’s Sal de Vida Lithium and Potash operation in Argentina has been held up due to business visa application process delays in Argentina and China. Consequently, Galaxy and ECE have executed an agreement to extend the due diligence to 31 December 2012. Once the condition precedents have been satisfied, the settlement of Tranche 2 is expected to be completed during Q1 2013, although later in the Quarter than previously expected. | Company report |
| GXY | Galaxy Resources confirms that following an incident at its Jiangsu Lithium Carbonate Plant in China on 22 November, the local Safety Bureau has released the incident site (Area 60) to the Company to commence the clean-up and refurbishment process. Following discussions with the local Safety Bureau, the Company has proposed a refurbishment plan for the affected Area 60 including the replacement of ruptured pipe work. Subject to government approval to re-open the site, the Company plans to complete the refurbishment and shutdown work and be in a position to re-commence operations early February 2013 | Company report |
| GNC | GrainCorp has again knocked back a takeover offer from US food processing giant Archer Daniels Midland. The grains marketer said it had rejected ADM’s sweetened offer of $2.78 billion as it materially undervalued the company. “GrainCorp’s board will be constructive in any dealings in relation to proposals that have the potential to be in the best interests of shareholders. GrainCorp has a unique portfolio of integrated, strategic assets and is confident in its outlook and strategy to continue to deliver shareholder value.” ADM’s initial offer of $11.75 a share in October was rejected by GrainCorp, which said it undervalued its business. ADM increased its offer to $12.20 a share in November. The offer was subject to several conditions, including due diligence and regulatory approvals. | Company report |
| WEB | Webjet today announced it has successfully completed a placement of approximately 6.9 million new Webjet ordinary shares at $3.60 per share to institutional and sophisticated investors to raise approximately A$25 million of additional capital. The proceeds of the placement will be used to fund the acquisition of Zuji in Australia, Hong Kong and Singapore | Company report |
| TXN | senior secured short term funding of $25m at an interest rate of 20% pa payable six monthly has been finalised. | Company report |
| ALQ | ALS has announced the purchase of an 80% shareholding of the operations of the Corplab laboratory group in South America for an EV of ~A$38m. Corplab’s current shareholders will retain 20% of the company whilst they remain in executive positions with the company. ALS has a five year Put and Call option over the outstanding shares. Established in 1995, Corplab operates eight environmental laboratories and one food laboratory in South America. Corplab has 420 staff and operations in Peru, Brazil, Argentina and Ecuador and has shown strong revenue growth over recent years due to the strong development of many of the South American economies. Combined with ALS’ existing environmental operations in Peru, Chile and Mexico, the combined entity will be the largest environmental analytical laboratory group in Latin America with revenues in excess of $30m. The acquisition will be EPS accretive in the first year of ownership. This is a positive for ALS. As we have previously noted, South America, in particular Peru, Brazil and Colombia which we have recently visited, have shown very strong economic growth and infrastructure development over the recent years – and this is expected to continue. This acquisition of Corplab will augment ALS’ expanding footprint in the region and open up the life sciences market. | Shaw |
| MUM | Mount Magnet South confirms continued progress towards the commencement of production at 50,000 ounces per annum at the Kirkalocka Gold Project in Q2/Q3 2013. Infill drilling has converted 63,000 ounces of the Mineral Resource from Inferred to Indicated (from 365,000 to 428,000 ounces) paving the way for an increase in the Mineral Reserve and, thereby, the life of mine and overall project economics. The revised Mineral Reserve and project financials will be released in Q1 2013. All documents for the remaining final key approvals for the commencement of production at Kirkalocka have been submitted | Company report |
| NGE | New Guinea Energy is pleased to announce that it has completed the sale of Petroleum Prospecting Licence (PPL) 277 to Esso PNG Exploration Ltd (Esso) and Oil Search. Under the terms of the agreements Esso and OSH have each acquired a 50% participating interest in PPL 277 in exchange for a total payment of US$15 million (Esso US$7.5 million, OSH US$7.5 million). NGE may become entitled to payment of an additional US$20 million if a Petroleum Development Licence is granted from the original PPL 277 area, and, if commercial production occurs, a royalty over all revenue received from the petroleum produced and sold). | Company report |
| SHL | Sonic has now been advised that German statutory health insurance funding (which makes up approximately half of Sonic’s German revenue) will be subject to a national “quota” (or capped percentage of the EBM scheduled fees) of 89.18% for the March 2013 and June 2013 quarters. This compares to the quota applying to the current December 2012 quarter of 95.36% and Sonic’s expectation of ~95%. The impact for the six months, above Sonic’s expectation, equates to just over 1% of Sonic’s group FY2012 EBITDA. The German laboratory industry is questioning the validity and calculation of the level of this quota with the governing body. | Company report |
| DTE | We have had an active year of drilling, with 35 wells completed across multiple geographies. In the process, we have de-risked our portfolio and moved resources from the prospective to contingent category, in addition to adding contingent resources. Following 18 months of delays, New South Wales is now open for business following the release of the long awaited Strategic Regional Land Use Policy. With the regulatory framework now in place for CSG, Dart Energy is ready to drill. The market does not like uncertainty and with a much improved outlook for CSG exploration in NSW we now also look forward to completing the much anticipated IPO of our international business. Dart Energy expects to commence drilling at Fullerton Cove once a limited injunction against drilling at the site is lifted. An expedited hearing, initiated by the local community action group, was held in September in the Land and Environment Court. Dart Energy expects, subject to a positive hearing and the securing of a rig in a timely manner, to commence drilling four lateral wells from a single drill pad early in 2013. No fraccing will be necessary as the horizontal nature of the hole maximizes exposure to the surface area of the coal. ”Hole in coal” is expected to total 4,000 metres. This method reduces the surface footprint and increases the reach of the wells. The Maria’s Farm Veggies project is a horticultural project, which is currently awaiting a Development Approval. We believe the DA is now imminent. The $65 million glasshouse development will be built on 16 hectares at Fullerton Cove. Dart Energy has a conditional Gas Sales Agreement (GSA) to supply up to 6.3 PJ of gas over 10 years at $7.50/GJ. The supply of CSG will ensure effective climate control is available to the glasshouse. It will fire boilers to produce heat to maintain optimum temperatures and capture produced CO2 to further enhance production yields and in so doing ensure near zero CO2 emissions. As a group, we estimate that our fixed costs or non-discretionary cash burn rate is around $3 million per month. If you include capital expenditure the figure is higher but also highly variable. Additionally, we have a US$100 million HSBC facility, which will provide funding for specific work programs like our Airth program, and around $40 million in cash and liquids | Company report |
| Sth America | Brazilian government forecaster Conab said the country would produce 37.66 million tons by the end of the season in March, 4.7% more than in the 2011-12 crop cycle. Brazil produces about one-fifth of the world’s sugar. | WSJ |
| China | A survey of more than 1,200 migrant households suggests unemployment among migrant workers hit 6% in June 2012, up from 3.4% in August 2011. With around 166 million migrant workers, that suggests 10 million were out of a job—no small problem for China’s stability-obsessed government | WSJ |
| EU | On a 12-month rolling basis, the cumulative current-account deficit for Italy, Spain, Greece, Ireland and Portugal has narrowed to 1.8% of their GDP, against 7.1% in late 2008. Indeed, in the third quarter, they posted a cumulative surplus of 0.7% of GDP. | WSJ |
| SGT | SGT associate company, Advanced Wireless Network, was the auction winner for 2.1GHz license (3G) in Thailand at the bid price of Baht 14,625 million. | Company report |
| Oil | As expected, OPEC has left its oil output ceiling at 30M BPD at its meeting in Vienna, although it’s unclear whether the cartel will do anything to address the fact that it’s producing well above that figure. | Seeking Alpha |
| US | The Fed is reportedly discouraging top U.S. banks from making large acquisitions as it informally uses powers it received under the Dodd-Frank Law and attempts to limit the ability of banks to threaten the stability of the financial system should they fail | Seeking Alpha |
| US | The White House has reportedly offered to include an overhaul of the corporate tax code in any deal on the fiscal cliff, although it didn’t provide specifics, such as how the reform would affect the overall tax burden. The Administration also cut its goal for new tax revenue to $1.4T from $1.6T. The Republicans made a new offer as well, but derided the business tax offer as a “red herring” and said the President still needs to outline spending cuts. | Seeking Alpha |
| EU | Eurozone industrial output fell a monthly 1.4% in October, and while that represented a deceleration from a 2.3% drop in September, the number badly missed consensus of -0.2%. The October decline was led by an alarming 2.6% drop in Germany, although Spain’s output grew 1.2%. | Seeking Alpha |
| EU | European finance ministers are meeting again in Brussels as they seek to break an impasse over plans to give the ECB supervisory powers as part of the creation of a eurozone banking union. The EU had hoped to complete a framework for the union by the end of the year | Seeking Alpha |
| BOQ | Bank of Queensland Chairman Neil Summerson launched a staunch defense of the board’s strategy after the regional lender posted the first annual loss by an Australian bank in 20 years. Mr. Summerson said the 17.1 million Australian dollar (US$18 million) loss the bank recorded in the year to Aug. 31 was down to a prudent approach to accounting, which meant Bank of Queensland now had the highest provisioning level of any Australian bank. Mr. Summerson also pointed to a nascent recovery in property prices in Queensland state as a sign that the lender may post a better result in the current financial year. Subdued property prices in the state were a key reason why the bank was forced to book heavy writedowns earlier this year, and to turn to investors for A$450 million in fresh capital. “If the conservative approach to collective provisions had not been adopted, the bank would have recorded a profit for the year. The bank is seeing some early indication that the downward movement in property values has started to reverse.” | iress |
| QUB | In the next step to establishing the Federal Government intermodal site at Moorebank in preference to the QUB intermodal site, the Federal Government has announced the initial Board for MIC. MIC is expected to be operating by Jan 2013 to manage the tendering process for construction and operations at Moorebank. | Shaw |
| BPT | Beach advises that the Ensign 965 rig spudded the Holdfast-2 horizontal well on 10 December 2012, one week after finishing work at the Marble-1 site. Other activities within the PEL 218 unconventional exploration program in the Nappamerri Trough include: Moonta-1 vertical well expected to commence flow back imminently. Marble-1 reached total depth with thickest Patchawarra Formation in the program to date. Streaky-1 two remaining stimulation stages, flow back anticipated late next week. Boston-1 coring program completed with elevated gas readings observed. The beginning of a four-well wet gas exploration campaign in PEL 106B commenced with the spudding of the first well, Coorabie-1 | Company report |
| DLS | Drillsearch Energy is pleased to announce the beginning of a four-well wet gas exploration campaign in PEL 106B which commenced with the spudding of the first well, Coorabie-1.. Drillsearch holds a 50% interest in PEL 106B and Beach Energy (ASX: BPT) as Operator holds 50%. | Company report |
| TAP | Tap Oil Limited is pleased to announce that the Contractor Group has executed a farmout of a portion of their interests in the Offshore Accra Contract Area, Ghana. Under the terms of the Farmout Agreement, a wholly owned subsidiary of Ophir Energy will assume operatorship of the Offshore Accra Contract Area on behalf of the Contractor Group and execute drilling of the deepwater Starfish-1 well. Ophir is a successful, African focused upstream oil and gas company with significant deepwater West African drilling experience. | Company report |
| NAB | The restructuring of NAB’s U.K. division is expected to continue throughout most of 2013 as the lender seeks to make its Clydesdale and Yorkshire banks self-funded and profitable Chairman Michael Chaney said. Australia’s fourth-largest lender reported a 22% slump in annual profit to $4.1b, the first time the bank’s full-year profit has dropped since 2009. The decline was fueled by losses at its U.K. division and slowing growth at home, which saw bad-debt charges balloon to $2.6b. Mr Chaney was cautious, too, about the outlook for the Australian economy as the resources boom that has insulated the country from the woes that have affected much of the developed world begins to wane. “Around 60% of Australia’s domestic growth since 2005 has been driven by temporary factors,” he said. “Of real concern, this has masked very low productivity growth.” | Company report |
| CAB | Cabcharge chief executive Reg Kermode says taxi drivers in future may accept only cash or cabcharge if the surcharge for card payments is halved to 5% | AFR |
| WHG | The nation’s 5th largest accounting firm, WHK Group, has retrenched 123 mostly administrative staff in phase 2 of its transformation program. it follows about 70 job cuts earlier this year and an exodus of at least 20 senior executives as the strategic overhaul takes its toll on staff morale. | AFR |
| WPL | BHP Billiton is selling its stake in the Browse LNG project to PetroChina for $US1.63 billion, removing another obstacle to development of the troubled venture and continuing the trend for miners to shelve non-core assets | AFR |
| VAH | Tourism Australia is on the verge of signing an expanded marketing agreement with Virgin Australia Holdings to fill the funding void left by Qantas Airways decision to sever ties | AFR |
| BLD | Boral’s ability to pass on price increases for its pre-mixed concrete and quarry products from April has been questioned by analysts given the difficult market | AFR |
| MAH | Macmahon Holdings will be granted a waiver for its debt covenants after its biggest shareholder Leighton Holdings agreed to sub-underwrite a drastically discounted entitlement offer and buy part of its business | AFR |
| TLS | Telstra has been forced by the National Rugby League to let Optus and Vodafone subscribers watch rugby league matches on smart phones and tablets for a fee as it doubles its investment in digital rights to more than $100 million | AFR |
| CCL | Aggressive discounting, volatile weather and weak consumer spending have dampened profit growth at Coca-cola Amatil this year but the beverage giant has unveiled further progress in its beer strategy and more investment in Indonesia | AFR |
| GMG | China’s sovereign wealth fund, China Investment Corporation, has finally banked some of the vast profits racked up from a white knight investment made three years ago in Goodman Group, offloading a 6.9% stake in one of the largest block share trades executed this year on the ASX | AFR |
| QAN | Qantas will next year face renewed competition from rejuvenated Singapore Airlines offering customers new cabins and lounges and looking to expand its relationship with Virgin Australia | The Australian |
| UK | The Office for National Statistics said the unemployment ratefell to 7.8% in the three months to October, from 8% in the three months to July. | WSJ |
| US | Fed announced it will purchase US$45bn a month of Treasuries starting in January 2013, supplementing their existing US$40bn a month of mortgage-backed securities. The Fed committed to low interest rates “at least as long” as the unemployment rate remains above 6.5% and if inflation “between one and two years ahead” is projected to be no more than 2.5%. | Bloomberg |
| EU | Berlusconi casts doubt on his political comeback claiming he will yield if Monti enters the election campaign, as a ‘moderate.’ | Bloomberg |
| Oil | International Energy Agency unexpectedly increased its forecasts for world oil demand in Q4 2012 and FY 2013 to 90.5 million b/d amid signs of rebounding Chinese demand | Citi |
| JMS | Jupiter Mines is pleased to announce that the Tshipi Borwa Mine, in which it has a 49.9% stake, has successfully loaded its first full trainload of manganese ore. This is a significant milestone for the Tshipi Borwa Project considering the first ore was mined on October 10th 2012 after progressing with the 70 metres prestrip. The first train comprising 104 wagons loaded with 6,430 tonnes of manganese ore is currently being railed to Port Elizabeth by Transnet where it will be stockpiled pending a 40,000 tonne initial shipment. It is envisaged that the first shipment of approximately 40,000 tonnes will be dispatched from Port Elizabeth in late December or early January. | Company report |
| AWC | Aluminium demand continues to grow with an expected 6% rise for 2013. Alumina Demand fairly stable. Oversupply outside of China BHP’s Worsley refinery was recently upgraded by 1.0Mtpa and the entire refinery is operating at 80% of capacity, while RIO’s Yarwun No.2 upgrade is running at 90% of capacity but may close the Gove Alumina Refinery due to the high Australian dollar and low alumina prices. Prices have slowly reacted positively to Chinese closers and absorbed BHP/RIO’s new capacity increases. Prices have rallied from a low of US$302/t to current levels of US$329/t. A bit of certainty surrounds cashflow with the AWAC guarantee of US$100m in dividends for 2013 to AWC. Stay-in-business capex is likely to remain at US$300m while growth capex at around US$50m. WA bauxite and alumina operations are operating at above nameplate capacity as is the Brazilian bauxite mine (Juruti) and refinery operations. We understand that Alcoa has expressed an interest in looking at increasing its exposure to this asset. This would leave AWC requiring between US$400-500m for its 40% interest. Some borrowings by the AWAC JV may occur, but certainly the possibility of an equity raising by AWC cannot be ruled out. As the Real has weakened, the Brazilian refinery [Alumar] is now as low on the cost curve as the JV’s WA operations. The Saudi Arabian operations [Ma’aden] have commenced, and it is lower on the alumina cost curve than the WA operations. A purchase of BHP/RIO’s interest in Alumar should be seen as a long term positive for the JV, although apotential equity raising may overhang the market in the short term. | Company report |
| APN | Advertising markets weaker in H2, APN publishing revenue down 10% in H2. Publishing cost initiatives generate $25 million of savings in 2012 with another $25 million reduction expected in 2013. Strong management focus on cash generation to reduce borrowings, product innovation and sales transformation in all businesses. Australian Radio Network and Adshel perform well ahead of market. New Zealand Strategic Review complete. EBITDA (pre-exceptionals) expected to be $150-$155 million for 2012. NPAT (pre-exceptionals) expected to be $51-$54 million for 2012, including dilution of APN Outdoor and impact of tax thin capitalisation rules | Company report |
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