Wesfarmers has announced a 4.9% rise in third quarter sales from its Coles supermarkets business, but has also said it remains cautious about the outlook for the remainder of the financial year.
The company revealed total sales of $6.92 billion from Coles for the three months to March 31, an increase from $6.59 billion from the corresponding period in the previous financial year.
Official figures show food and liquor sales grew by 3.9% to $5.47 billion, with Coles Express sales including fuel rising 9.1% to $1.45 billion. This morning, shares in the company fell by 2.44% to $30.38 after the results were announced.
The company said its outlook for the fourth quarter is cautious, with the impact of the Federal Government’s stimulus packages from last year impacting sales in the previous corresponding quarter.
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“Progress on strategies across the retail businesses remains on track. Solid volume growth, particularly in the group’s turnaround businesses, continues to show that customers are responding well to improvements in retail offerings,” managing director Richard Goyder said in a statement.
Additionally, Target recorded sales of $725 million for the quarter, a flat result, with Kmart recording an increase in sales of 4% to $824 million.
Sales of new motor vehicles fell by a seasonally adjusted 2.7% to 83,245 during March, according to the latest figures from the Australian Bureau of Statistics, but are still up by 19.2% from the same period in 2009.
Sales fell by 6.9% in West Australia to 8,845, with sales also falling in South Australia, Queensland and New South Wales. The biggest increase was in the Northern Territory, with a 5.9% jump, while sales in Tasmania and Victoria grew by 4% and 2.2% respectively.
Oil production group Santos has recorded a 6% drop in sales for the March quarter, with floods in central Australia impacting heavily on the company’s Cooper Basin operations.
Additionally, the company has been forced to lower annual production guidance to between 49-52 million barrels of oil equivalent. Revenue fell 5% from the previous corresponding quarter to $511 million.
“The flooding in Central Australia will result in an estimated 2 mmboe (net to Santos) of production being deferred,” Santos said in its report. “Capital expenditure guidance has been lowered primarily due to flood impacts delaying Cooper Basin project activities and timing of expenditures across the base business capex program.”
“Strong gas production from John Brookes and Indonesia offset lower production from the Cooper Basin and Victoria,” the company said.
Newcrest Mining has announced a 6% decline in output during the March quarter, with gold output forecast at the Hidden Valley mine to be between 1.81-1.91 million ounces.
Additionally, the company said the board has approved a new underground gold and copper project at the Cadia East mine in New South Wales, with construction having already started. The cost is estimated at about 1.91 billion.
Australian sharemarket lower despite Wall Street rally
The Australian sharemarket has opened lower today, despite good results from Wall Street overnight as investors were optimistic following solid financial results.
The benchmark S&P/ASX200 index was down 53 points or 1.09% to 4900.4 at 12.00 AEST, while the Australian dollar has also lost ground to US92c.
ANZ shares lost 1.2% to $25.10, with Commonwealth Bank shares losing 1% to $58.91. Westpac fell 1.8% to $27.70, as NAB shares also lost 0.7% to $28.26.
As reported by The Australian, mining giant BHP Billiton is currently facing investigation by the US Securities and Exchange Commission in relation to a $2.7 million graft claim for a project in Cambodia.
The company yesterday said it had discovered the possibility of violating anti-graft laws. Now, the company has reportedly confessed of making a $2.7 million payment to a community near the Cambodian bauxite project.
However, the publication has reported BHP rejects any suggestion the money was unofficial and paid to government agents, and maintains the money was paid into a fund which distributes social welfare.
Also in the mining sector, Iluka resources has said demand for mineral sands products in major markets has recovered so far during 2010, despite reporting a 23.7% decline in production for the first quarter.
“As Iluka has advised previously, sales volumes in the first half of 2010 will be drawn predominantly from low margin product held in inventory at the end of 2009, as well as the remaining contribution from the Mid West operations, until the expected contribution from the higher margin Murray Basin Stage 2 and Jacinth-Ambrosia production in the second half of 2010,” the company said in its production report.
The Commonwealth Bank of Australia is pushing into Asia, purchasing a 15% stake in Vietnamese bank VIB for an undisclosed sum. It will be the eleventh foreign lender to buy shares in the company.
The deal will see Commonwealth Bank own 20% of VIB by 2011 pending Vietnamese Governmental approval. VIB is currently valued at $US235.2 million based on its current share price of $US0.98.
Simon Blair, head of international financial services at CBA, said in a statement the bank expects demand for financial services in the country to grow.
“With a young population of 87 million, a rapid uptake of internet and mobile phone technologies and only around 15% of the population currently using banking services, we expect the demand for financial services in Vietnam to increase significantly in the coming years.”
Caltex Australia has said it remains cautious about its outlook for the second half of the year, despite remaining optimistic about its long-term forecasts. The company said it will continue to focus on cashflow and managing debt.
Government confirms return to surplus on higher tax revenue
The Federal Government has confirmed it will return to surplus on the back of better-than-expected tax revenue despite paying for massive health reform at the same time.
Finance minister Lindsay Tanner has told ABC Radio that the Government will be able to meet its spending with savings. “Better tax receipts than we were anticipating… we’ve committed to use those to get it (the budget) back to surplus quicker than was otherwise going to be the case.”
Tanner also said that Government debt will be able to be paid down more quickly than anticipated.
In the United States, Senate Democrats have moved forward on the financial regulation reform bill. Senator Christopher Dodd, who is leading the reform, has said he will introduce the measure to the Senate floor with voting to begin next week.
The bill is set to crackdown on the derivatives market, which president Barack Obama has said was at the middle of the financial meltdown in 2008.
On Wall Street, fears of the regulation and debt problems in Greece were offset by solid financial results. The Dow Jones Industrial Average gained 7.86 points or 0.07% to 11,124.92.