Iluka dives
Mineral sands miner Iluka Resources slashed its dividend as profit dived in the first half due to plunging prices and weak demand. Net profit fell by 88 per cent to $34.3 million, as a hoped-for recovery in zircon demand did not occur. It declared an interim dividend of 5¢ a share, fully franked, down 80 per cent on last year's 25¢ payout.
Ridley revamps
Livestock feed producer Ridley Corp will start a program to modernise its mills in the coming year. It commissioned a new mill at Pakenham in Victoria late last year, which, coupled with a recent improvement in sentiment in the dairy sector, should improve earnings in 2013-14. Ridley made a loss of $21.7 million in year to June 30, which it blamed on price pressures in the dairy industry, reductions in the use of feed by dairy farmers and fierce competition.
Deep paper cuts
PaperlinX has incurred another loss but says its performance is improving. The paper merchant made a net loss of $90.2 million in 2012-13, an improvement on a $266.7 million loss in 2011-12. Costs from restructuring and asset write-downs in the latest 12 months were $51.7 million, and the company shed 600 staff, or about 12 per cent of its workforce. The cuts are expected to deliver permanent savings of $35 to $40 million in the year ahead.
Trade Me invests
Shares in Trade Me dropped to a two-month low after New Zealand's largest online auction site said earnings growth would slow in the coming year as it invests more in its business. Profit rose 4 per cent to $NZ78.6 million ($69.7 million) in the year to June 30, on revenue up 15 per cent at $NZ164 million.
Growth fund
Investa Office Fund reported 56 per cent growth in net profit to $158.7 million, from $101.9 million in the previous corresponding period. This was made despite the tough office leasing conditions across the country. The annual distribution was up 1 per cent to 17.75¢, 0.25¢ higher than last year, which included a 1.9¢ special distribution. The earnings for 2014 per unit were expected to increase 6 per cent to 26.5¢.
Frequently Asked Questions about this Article…
Iluka Resources cut its dividend after net profit plunged 88% to $34.3 million. The company blamed plunging prices and weak demand, and said a hoped-for recovery in zircon demand did not occur, prompting the lower payout.
Iluka declared an interim dividend of 5¢ a share, fully franked. That is an 80% reduction from last year’s interim payout of 25¢ a share.
Ridley Corp reported a $21.7 million loss for the year to June 30, which it attributed to price pressures in the dairy industry, reduced feed use by dairy farmers and fierce competition. To improve earnings it commissioned a new mill at Pakenham, Victoria, and will start a program to modernise its mills in the coming year; improving dairy sector sentiment should also help earnings in 2013–14.
PaperlinX posted a net loss of $90.2 million in 2012–13, although this was an improvement from a $266.7 million loss the prior year. The company incurred $51.7 million of restructuring and asset write-down costs and cut about 600 staff (roughly 12% of its workforce). Those cuts are expected to deliver permanent savings of $35–$40 million in the year ahead.
Even though Trade Me’s profit rose 4% to NZ$78.6 million on revenue up 15% to NZ$164 million, the company warned that earnings growth would slow in the coming year because it plans to invest more in the business. That guidance prompted shares to drop to a two-month low.
Investa Office Fund reported a 56% jump in net profit to $158.7 million from $101.9 million a year earlier. The annual distribution rose 1% to 17.75¢ (0.25¢ higher than last year, which included a 1.9¢ special distribution), and the fund expected earnings per unit for 2014 to increase about 6% to 26.5¢.
The article highlights several sector drivers: commodity price drops and weak zircon demand hit Iluka; dairy industry price pressure, lower feed usage and strong competition affected Ridley; restructuring and industry pressures weighed on PaperlinX; investment-led growth guidance influenced Trade Me; and tough office leasing conditions were noted even as Investa Office Fund reported stronger profit and distributions.
Based on the article, investors may want to monitor zircon and commodity price trends for Iluka, progress and cost savings from Ridley’s mill modernisation and PaperlinX’s restructuring, Trade Me’s investment spend and its effect on earnings growth, and office leasing conditions and earnings-per-unit guidance for Investa Office Fund.
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