Financial news: Banking, Stock quotes & Earnings

Press digest australian business news feb 24

´╗┐Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy. THE AUSTRALIAN FINANCIAL REVIEW (this site)Mike Wilkins, chief executive of Insurance Australia Group (IAG), yesterday predicted the insurer would receive higher income from premiums this financial year after rises in property policies were passed on to consumers. The prediction came as IAG announced it was increasing its full-year premium growth outlook to from between 6 percent and 9 percent up to 10 percent. "If input costs rise we have to pass those on to consumers and we have seen a significant increase in reinsurance costs," Mr Wilkins said. Page 41.-- Dick McIlwain, chief executive of gaming and wagering group Tatts Group, yesterday complained about people's lack of awareness regarding the company's operations. "We have got a nice diversified gambling business. It gives me the shits when all people talk about is wagering," Mr McIlwain, who retires from his post later this year, remarked. Tatts announced an 11.3 percent jump in net profit for the first half of the 2011-12 financial year to A$166.9 million, a result that met analysts' expectations. Page 42.-- Orbis Investment Management, the largest shareholder in PaperlinX, would still support shareholder Andrew Price's election as director at chairman Harry Boon's expense despite the paper manufacturer announcing plans to restructure, according to Orbis' Simon Mawhinney. "Massive restructuring is the order of the day and the sooner the better, that is clear," the fund manager's analyst said. Page 42.-- Ausdrill Limited yesterday announced a 50 percent jump in first-half profit for the 2011-12 financial year to A$54.6 million. Managing director Ron Sayers, who is currently facing fraud charges under the multi-agency Project Wickenby tax probe, said the diversified mining and services group took confidence from opportunities in Africa. "Our tendering activities remain high, particularly in Africa, and we expect to convert a significant number of these tenders into contracts over the next 18 months," Mr Sayers said. Page 42.-- THE AUSTRALIAN (this site)Grant King, head of Origin Energy, yesterday said the coal-seam gas export sector in Queensland may not be able to drill sufficient of the thousands of onshore wells necessary to supply the multi-billon-dollar facilities being constructed in the state's Gladstone. The warning came as the energy retailer announced a first-half net profit of A$794 million, up from a A$136 million loss the same period a year prior. Page 21.--

Fairfax Media yesterday announced a 41 percent drop in net profit to A$96.7 million for the first half of the 2011-12 financial year, a result which chief executive Greg Hywood described as "disappointing". The diversified media group announced a plan to cut up to A$130 million in spending over the next three years in response, which is expected to involve redundancies and outsourcing of finance and information technology processes. Page 21.-- Virgin Australia yesterday announced a corporate structure designed to abolish a 49 percent limit on foreign investments into its domestic operations. The strategy was revealed as the airline announced a 118 percent jump in half-year profit to A$51.8 million, with revenue climbing by 18 percent to a record interim result of A$2 billion. "Really today the results illustrate that our strategy is right and that results are starting to flow through earlier than expected," John Borghetti, chief executive of the carrier, said. Page 21.-- Iluka Resources yesterday announced an astonishing 1400 percent jump in profit to A$541.8 million, with the mineral sands producer benefiting from a surge in commodity prices that added A$736 million to earnings before interest, tax and depreciation. Investors, however, sent the company's stock down by 3.5 percent to A$16.82 in response to reiterated comments from managing director David Robb that the company could "moderate" the production of zircon in 2012. Page 22.--

THE SYDNEY MORNING HERALD (this site)The Federal Court yesterday heard that the new entity responsible for the assets of Centro Properties and Centro Retail, Centro Retail Australia, would not assume the liabilities of its predecessors. The revelation came only a fortnight before the start of a major class action into Centro Properties' accounting scandal five years ago, when the property group failed to announce it was burdened with up to A$3.1 billion of short-term debt. Page B1.-- BHP Billiton yesterday was accused of "distasteful" behaviour after the global miner announced it may cut jobs at a manganese smelter in Tasmania only weeks after revealing a record A$8.45 billion half-year profit. The Temco facility near Launceston will suspend operations in just over two weeks, giving BHP and its partner Anglo American the opportunity to assess the viability of the plant. Page B2.-- Paul Zahra, chief executive of David Jones, yesterday welcomed a rebound in sales after the luxury retailer recorded an 11 percent fall in revenue for the first quarter. "It's too early to say, you could argue the worst is behind us. But we are still in volatile trading and it's too early for us to tell," the chief executive added. David Jones announced a 3.1 percent drop in total sales for the second quarter of the 2011-12 financial year to A$598.5 million. Page B3.--

Ramsay Health Care yesterday announced it would invest up to A$100 million this financial year to improve the capacity of its private hospital network. The revelation came after the healthcare group posted a 22.3 percent jump in half-year profit to A$125.69 million, with revenue climbing by 5.7 percent to A$1.97 billion. Chief executive Christopher Rex also predicted that "it is  very likely that a number of people will downgrade their health insurance and maybe to a point where they catapult themselves out of the private hospital market". Page B3.-- THE AGE (this site)Moody's Investors Service yesterday warned it could reduce the credit rating of National Australia Bank's (NAB) British banking division. NAB's business, which is concentrated on Clydesdale Bank and had its senior debt and bank deposit downgraded to A1 by Moody's a few months ago, is currently under review, with some observers suggesting that NAB is exploring options of exiting the market. Page B3.-- Luci Ellis, head of financial stability at the Reserve Bank of Australia, yesterday said in an address to the mortgage sector that lenders must uphold high standards in order to avert a crisis similar to the property bust in the United States. "It is always tempting to ease lending standards and dress that up as responding to competition or giving the customer a better deal  but in the experience of the US, we have seen what can happen when lenders yield to that temptation," Mr Ellis remarked. Page B4.-- Telecommunications giant Telstra filed an altered structural separation undertaking to the Australian Competition and Consumer Commission (ACCC) yesterday that has responded to the regulator's demands. The deal, which could be approved by the ACCC as early as next week, opens the path for a full rollout of the Federal Government's national broadband network. David Thodey, chief executive of Telstra, said the changes were not material and therefore did not require shareholder approval. Page B5.-- Consolidated Media Holdings yesterday reported a 7.1 percent drop in net profit for the first half of the financial year to A$42.1 million, citing volatility in the economy and a tough environment for retailers. "The retail environment continues to be extremely challenging, and the trends we saw last year in respect of subdued consumer spending and general negative sentiment were present again this half," John Alexander, executive chairman of the pay television investment group, said. Page B6.--

Rich states cant meet 2020 climate aid goal alone researchers

´╗┐BARCELONA, June 3 (Thomson Reuters Foundation) - An international commitment to provide $100 billion a year by 2020 to help vulnerable countries tackle climate change is unlikely to be met if only government funding from rich nations is counted towards it, researchers said. At U. N. climate negotiations, some developing countries have argued the annual $100 billion should come entirely from developed nations' treasuries, even though the original promise called for funding from a range of sources. Climate finance from wealthy states' coffers alone would not hit the target unless it grew at 25 percent each year from 2012, the World Resources Institute (WRI) said in a paper."It's not an impossibility if there is enough ambition but there's nothing in the recent past that would indicate we could grow at those rates," said WRI finance expert Michael Westphal, lead author of the paper outlining scenarios to get to $100 billion. The researchers suggested a combination of climate finance sources could be counted towards the goal, including support from multilateral development banks, private-sector investment mobilised by public money, and development aid relating to climate change. If that were to happen, climate finance could total $109 billon to $155 billion in 2020 under projections of low to medium increases across all the sources, the paper said. Westphal said progress should be made this year on defining how to reach the annual $100 billion, ideally with a formal decision at December's U. N. conference in Paris, where leaders are due to agree a new global deal to tackle climate change.

When the non-binding climate finance commitment was made in Copenhagen in 2009, the accord said the $100 billion would come from "a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance". Since then, little headway has been made on clarifying what can be counted towards the goal and deciding how to achieve it. To agree on this, "countries will have to find a middle ground", said the WRI paper, released during June 1-11 climate negotiations in Bonn."This is important not only to resolve accounting issues, but also to demonstrate progress in scaling up climate finance and to build confidence in a future climate regime," it added.

ADAPTATION LOSES OUT Figures in the paper show that, in 2012, developed countries contributed $17 billion in climate finance, while development banks gave $15 billion and other climate-related development assistance was $10 billion. Leveraged private-sector investment was between $26 billion and $42 billion, depending on the ratio applied. If all those four types of finance were counted, the $100 billion goal could be reached with a low growth rate in public finance sources, and low leverage for private-sector investment, the WRI said.

If any were excluded, higher growth rates and leverage would be needed. "But under every projection an increase in public finance is required for balance," the paper added. Developed countries could potentially find additional public money to meet the goal by using new and innovative sources of finance such as carbon market revenues, financial transaction taxes, export credits, debt relief and redirection of fossil fuel subsidies, the paper noted. Westphal said it was a "concern" that under all four scenarios in the paper, finance for adaptation - measures to adjust to more extreme weather and rising seas - was projected to be far lower than for mitigation, or activities to reduce greenhouse gas emissions. The new Green Climate Fund, set up under the U. N. climate talks, plans to help correct this funding imbalance, which troubles vulnerable countries. Westphal said governments should increase their ambition on adaptation, and areas like making agriculture and infrastructure more resilient to climate change could attract private-sector finance. He said governments should aim to resolve in Paris how the $100 billion promise would be met because it was an "integral trust-building mechanism" between rich and poor countries for the new deal, which is not scheduled to kick in until 2020.