Business on hold for politics
Australian corporate leaders have nominated the strong dollar, a high cost base and the political uncertainty of a long election campaign as the main impediments to maintaining profit growth in a slowing economy, according to The Australian Financial Review.
Bosses from more than 30 of the country’s top companies – including Commonwealth Bank, Wesfarmers, CSL, Origin Energy and Fortescue Metals Group – said in a post-reporting season survey that fears of political instability this year ranked as one of their biggest concerns, despite Australian corporations beating earnings forecasts during February’s half-time results season.
The country’s largest pipeline operator, APA Group, said the government’s decision to embark on a drawn-out election campaign had effectively put its own business into “caretaker mode” for the rest of the year.
Investors switch focus as mine sector softens
Forecaster BIS Shrapnel says the tailing off of the minerals investment boom in Australia should be followed by a strong rise in non-mining business and house building carrying through towards the end of the decade, according to The Australian.
Chief economist Frank Gelber was upbeat about the outlook because of the likely investment transition, but said the big imponderable was when commodity prices were going to ease and with them, the Australian dollar.
Monadelphous’ winning ways
Barring unforeseen catastrophe, Monadelphous will post its 12th consecutive year of earnings growth come the end of June, after last month reporting a record first-half profit of $79.1 million, according to the Australian Financial Review.
The interim result was 37.5% higher than the previous corresponding period and full-year profit is expected to better last year by more than 30% as well. In typical style though, the company has moved to ensure expectations beyond that are kept in check.
Delivering its interim result, it said achieving any revenue growth next financial year would be “challenging”
Trent Barnett, head of research at Perth stockbroking firm Hartleys, says erring on the side of conservatism with forecasts and consistently beating them is one way Mondelphous has built up an “enormous amount of trust” with investors.
