press digest-australian business news - feb 9

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    PRESS DIGEST-Australian Business News - Feb 9
    07:19, Wednesday, 9 February 2005

    (Compiled for Reuters by Media Monitors)

    THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

    Robust trading in the beer business and early improvement in
    the wine division have placed the Foster's Group
    recovery 12 months ahead of schedule, it said. Foster's announced
    an operating profit of A$315.4 million for the first half of
    2004/05, a rise of 2.6 per cent from a year earlier.

    Chief executive, Trevor O'Hoy, said the decision to bid for
    wine producer, Southcorp , had been vindicated by the
    improvements in the Beringer Blass wine business and wine
    industry conditions globally. Page 18.

    --

    Wesfarmers retiring chief executive, Michael Chaney,
    warned yesterday that declining consumer confidence would affect
    the group's hardware and insurance businesses in the coming year.
    Mr Chaney said consumers were aware of easing house prices and
    the likelihood of higher interest rates. He reported that the
    Perth-based conglomerate had a 1.9 per cent fall in first-half
    net profit to A$292.1 million, excluding the sale of rural
    services business, Landmark. Page 18.

    --

    The price of shares in telecommunications leader, Telstra,
    rose 7 cents to A$5.23 yesterday, just below the A$5.25
    level at which Federal Treasurer , Peter Costello, has said the
    Government would be happy to sell its remaining shares. Telstra
    shares have risen almost five per cent in the past week and
    analysts say the company has become a late beneficiary of the
    overall buoyancy in the sharemarket. Page 47.

    --

    A softer than expected housing market has dampened prospects
    for building materials producer, Boral . Managing
    director, Rod Pearse, said yesterday: "The market is mixed and we
    will just have to see how it evolves." Boral reported a net
    profit of A$179.7 million for the six months to December 31,
    three per cent down on the previous December half. First-half
    profit would have risen three per cent but for the A$11.3 million
    spent on the unsuccessful bid for Adelaide Brighton Cement. Page
    48.

    --

    Renewable energy group, Pacific Hydro announced
    yesterday that it had authorised 'a number of credible, strong
    international companies' to conduct due diligence ahead of a
    possible takeover. Managing director, Jeff Harding, said the
    strong interest of the companies indicated the value of Pacific
    Hydro's current operations, its portfolio of future projects and
    growth potential. The company yesterday reported a first-half
    profit of A$21.29 million, up from A$20.28 million. Page 49.

    --

    THE AUSTRALIAN (www.theaustralian.news.com.au)
    Beverages company, Foster's Group, yesterday reported an interim
    half-year profit of A$757 million, underpinned by recovery in its
    United States wine division. Chief executive, Trevor O'Hoy, said
    the company had 'come out of a hole' in the six months to
    December 31, particularly with regard to wine. Wine producer,
    Southcorp, for which Foster's is offering A$3.1 billion, has
    brought its half-year report forward by a week and will report
    today. Page 31.

    --

    Diversified conglomerate, Wesfarmers, has exceeded market
    expectations, reporting yesterday that it had an interim net
    profit of A$291.2 million for the six months to December 31. The
    result reflected an underlying profit growth of almost 16 per
    cent, prompting a rise in the share price to a record close of
    A$41.11, valuing the company at A$15.5 billion.

    Wesfarmers declared a fully franked interim dividend of A53 cents, up from
    A48 cents in the previous corresponding half. Page 31.

    --

    Creditors of collapsed contractor, Walter Construction Group
    (WCG), were told yesterday that the company was 'hopelessly
    insolvent,' with debts exceeding A$90 million. Administrator,
    Martin Madden, of KordaMentha, said 500 workers would be
    retrenched and the company would struggle to pay entitlements
    totalling A$16 million. Madden said there would be no money for
    non-employees unless German parent company, Walter Bau AG, paid
    A$38 million that it owed WCG. Page 33.

    --

    Iluka Resources reported yesterday that it had
    identified four million tonnes of zircon, worth around A$3.1
    billion, at its Jacinth and Ambrosia deposits in the Ceduna
    region of South Australia. Iluka is the world's largest producer
    of zircon, used in ceramics production and the glass for
    television screens. Iluka said zircon content at Ambrosia graded
    up to 55 per cent. Iluka shares closed at A$6.56, up A3 cents.
    Page 33.

    --

    The Australian Competition and Consumer Commission has
    confirmed a draft ruling endorsing the marketing alliance between
    Qantas Airways , effectively
    extending the agreement for another five years. The agreement
    allows the airlines to co-ordinate scheduling, marketing, sales,
    freight and customer service on services between Australia and
    Europe. Virgin Atlantic [VA.UL] had objected that the deal gave
    Qantas and BA an unfair advantage on the route. Page 34.

    --

    THE SYDNEY MORNING HERALD (www.smh.com.au)

    Telstra denied yesterday that it had decided to sell its
    profitable directories business, Sensis, but did not rule out the
    possibility. The Age reported yesterday that it was planned to
    spin-off Sensis before the final privatisation of Telstra.
    'Where there's smoke there's fire on this one,' said Greg
    Fraser, of Shaw Stockbroking. He said a sale would unlock value
    from Sensis and allow it to participate in media consolidation if
    ownership laws were changed. Page 29.

    --

    Foster's Group chief executive, Trevor O'Hoy, says he doubts
    that the company will have any rival in bidding for wine
    producer, Southcorp. Mr O'Hoy said yesterday that because of
    Foster's 19 per cent stake in Southcorp, interested parties had
    to talk to him, and had done so. 'Emotion is a strange thing in
    takeovers but I just can't see anyone coming in,' he said.

    Foster's bid of A$4.17 a share values Southcorp at A$3.1
    billion. Page 29.

    --

    Robert Cleary, acting chief executive of failed mining
    contractor, Henry Walker Eltin , had resigned without
    explanation, administrator Scott Kershaw, of McGrathNicol &
    Partners, told a creditors' meeting in Sydney yesterday. He said
    Mr Cleary was on contract, which made him an unsecured creditor
    with no guarantee he would be paid. Creditors meeting in Darwin
    observed one minute's silence for HWE co-founder, Neville Walker,
    who died of a heart attack on Monday. Page 29.

    --

    Property group, Stockland , confirmed yesterday that
    it had discussed its proposed A$7.5 billion takeover of General
    Property Trust (GPT) with shopping centre operator, Westfield,
    which has a 6.5 per cent stake in GPT. Stockland chief
    executive, Matthew Quinn, said he had discussed possible takeover
    scenarios with all GPT investors. Stockland reported a net
    profit of A$202.16 million for the six months to December 31, a
    rise of 58.1 per cent. Page 31.

    --

    Federal Treasurer, Peter Costello, said yesterday the
    Government could be embarrassed and even sued if it failed to
    follow due process in considering the takeover bid for WMC
    Resources from Swiss mining house, Xstrata . At
    a meeting of the Government parties in Canberra Mr Costello came
    under what was described as 'direct and personal attack' from
    back-benchers who wanted him to block the bid on national
    interest grounds. Page 31.

    --

    THE AGE (www.theage.com.au)
    Foster's Group chief executive, Trevor O'Hoy, yesterday rejected
    suggestions that the beverages company was offering too much with
    its A$3.1 billion takeover offer for wine producer, Southcorp.
    He said that with signs of an end to the United States grape
    glut, Southcorp would probably cost more in a year. Mr O'Hoy
    said the timing was right for the takeover to accelerate earnings
    and increase the group's wine business. Page B1. --

    In a brief statement to the Australian Stock Exchange
    yesterday morning, Telstra said it 'has taken no decision to sell
    Sensis,' its profitable directories and classified advertising
    subsidiary. The telecommunications giant was responding to
    yesterday's report in The Age that it was preparing to spin-off
    Sensis before the Federal Government sells its remaining 51.8 per
    cent stake in Telstra. Telstra's share price reached its highest
    point in almost three years yesterday, closing at A$5.23, up A7
    cents. Page B1.
    --

    Looking for more information from local sources? Factiva.com
    has 112 Australian sources including the Australian Financial
    Review.

    ((Reuters Sydney Newsroom, 61-2 9373 1800,
    [email protected]))

    (c) Reuters Limited 2005
    REUTER NEWS SERVICE
 
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