Upmarket retailer David Jones has reaffirmed its second-half guidance, after just meeting expectations for its first-half profit, but noted recent adverse weather in Australia, turmoil in Libya and the earthquake and tsunami in Japan has negatively influenced the recent trading environment.
DJs today reported a 5.2% lift in first-half profit, scraping in to forecasts of 5-10% growth, and reaffirmed second-half guidance of 5-10% growth profit.
Earnings lifted 4.2% but revenue was flat, it said.
Virgin Blue set to post $80 million loss
Virgin Blue has disappointing shareholders by flagging a full-year loss of up to $80 million, citing fuel prices and the Queensland floods and Christchurch earthquake.
The forecast comes shortly after Australia’s second-largest airline reported a slump in first-half net profit after tax to $24 million, and compares with a previous full-year statutory profit of $34.3 million.
Today, Virgin said its second-half fuel bill has lifted $50 million in just one month and drew attention to weakness in the leisure sector.
Libya oil impact may last for a year
The impact on oil supplies due to the military action currently being undertaken in Libya could last over a year, some analysts have warned, saying facilities could potentially be damaged in air strikes.
“As a last-ditch move of rebellion, (Libyan leader Muammar) Gaddafi may purposely sabotage oilfields and oil infrastructure to frustrate the UN coalition,” Liongate Capital Management analyst Adam Taylor told Reuters.
“Repairing such damage could take several years, keeping oil production depressed for a prolonged period of time,”
While Libya is a relatively small producer of oil, it was still contributing more than 1.6 million barrels per day before the military action began between the government and rebels.
“The most important question is the exit strategy of the UN Coalition and whether Libya falls into a multi-year civil war, which could cause a permanent reduction in Libyan oil production.”
Jeremy Charlesworth, chief investment officer at Moonraker fund management, also said that production could be delayed for up to 18 months.
Shares flat after weak Wall Street lead
The Australian sharemarket has opened flat this morning following a weak lead on Wall Street, where investors are spooked due to the ongoing military action in Libya.
The benchmark S&P/ASX200 index was down 2.1 points or 0.05% to 4641.3 at 12.10 AEST, while the Australian dollar also gained ground, staying slightly above $US1.
AMP shares lost 0.93% to $5.33, as Commonwealth Bank shares gained 0.41% to $51.15. NAB lost 0.16% to $24.65 as Westpac also rose 0.35% to $23.00.
Stocks fell on Wall Street overnight despite a three-day rally as investors continue to be spooked by the ongoing violence in the Middle East.
The Dow Jones industrial average fell 17.90 points, or 0.15%, to 12,018.63.
Bluescope chairman attacks carbon tax
Bluescope Steel chairman Graeme Kraehe has said the Government’s consulting process over the carbon tax has damaged the amount of trust business has in Labor.
“The most constructive consultations that we saw between the Government and industry/business was in the Hawke/Keating time,” he said.
“The consultation between government and business is appalling and I think it is fair to say that trust between government and business is not good.”
Prime Minister Julia Gillard has rejected the attack, saying, “Bluescope, and indeed the steel industry, were heavily consulted during the carbon pollution reduction scheme debate”.
Linc Energy purchases US oil fields
Linc Energy has finalised the purchase of three oil fields in Wyoming for $US20 million, the company has announced.
The fields have a combined output of 190 barrels per day.
Oil sales revenue and operating expenses will be received as of March 1, with the company also saying it expects to conduct exploratory drilling at coal tenements in Queensland.
Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
