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  • McAleese Group may park Cootes trucking brand

    McAleese Group, owner of the Cootes fleet, is planning to restructure its fuel distribution business. Photo: Michael Clayton-JonesThe Cootes trucking brand may be scrapped by the McAleese Group almost 50 years after it was founded, as the group tries to restore its reputation following last year's fatal fuel tanker crash in Sydney.
    Nanjing Night Net

    McAleese, which bought Cootes from private equity group CHAMP in 2012, is considering renaming its fuel distribution business McAleese Oil & Gas as part of a restructure. It expects to make a decision on the brand name by the end of March.

    McAleese executive chairman Mark Rowsthorn said it was reassessing the branding of Cootes' fuel tankers and the age of its fleet and customer service as it tried to retain key clients such as Caltex.

    Caltex has been developing its own fuel transportation business, revealing on Monday it had bought the fuel division of privately held transport group Scott's for $95 million. The purchase includes 28 service stations and 18 fuel depots, mostly in regional Victoria, South Australia and NSW.

    Mr Rowsthorn expressed surprise at the acquisition, telling analysts he had only learnt of Caltex's purchase on Monday morning, and had not discussed it with Caltex.

    ''At first glance, I don't think it's an issue with our contract, but clearly it's too early to tell,'' he said.

    Along with Origin Energy, Caltex is one of Cootes' most important remaining fuel customers after the company lost a national transport contract with Shell last month to rival Toll Holdings.

    Cootes has also lost BP's NSW fuel distribution contract, which is being retendered nationally.

    Toll said last week it was hopeful of winning the national BP contract.

    Analysts said while Cootes' Caltex contract was for distribution in metropolitan areas, not regional areas, the Scott's purchase could make it more difficult for McAleese to renew the contract when it expires in March 2015.

    ''We believe this presents a risk for Cootes,'' Deutsche Bank analyst Cameron McDonald said.

    Caltex Australia chief executive Julian Segal said the group would consider renewing Cootes' contract. ''If Cootes would be in a position to reassure us of the reliability and safety of the trucks then they would be considered,'' he said.

    This story Administrator ready to work first appeared on Nanjing Night Net.

  • Fairfax Media boss Greg Hywood rejects reports on Domain IPO

    Master of his Domain: Fairfax Media chief executive Greg Hywood. Photo: Rob HomerFairfax Media chief executive Greg Hywood has strongly rejected a report saying that the company's real estate classified business Domain is being primed for sale.
    Nanjing Night Net

    Shares in Fairfax rose to a 27-month high on Monday after The Australian reported that Domain was ''considering joining a heady rush for floats with a $500 million listing of Domain on the local stockmarket in early 2015''.

    But Mr Hywood said in an email that Fairfax had ''no plans'' to float Domain, echoing comments at the company's half-year results that he was not going to talk about an initial public offering for the business.

    ''We appointed Antony Catalano as CEO because we wanted to accelerate the growth of Domain. The business is gaining a strong competitive foothold,'' Mr Hywood said.

    Eyebrows were raised when Fairfax Media, owner of The Age and The Sydney Morning Herald, in 2013 put Domain in a separate business unit. Domain reported a 33 per cent rise in online revenue, and 50 per cent growth in digital earnings before interest, taxation, depreciation and amortisation in the six months to December 31.

    Macquarie valued Domain at $974.1 million, the bulk of which comes from its digital operations.

    Fairfax's dating site RSVP was valued at $72 million. Its broadcasting arm - including Melbourne's 3AW and 2UE in Sydney - was valued by Macquarie at $145.5 million.

    In a recent note to clients, Macquarie Equities described Domain as the ''standout asset'' of Fairfax and said that ''management sees upside opportunity in real estate''.

    ''Importantly, the Domain business is now well past a critical inflection point, with print contributing only [about] 25 per cent to group revenues and EBITDA, leaving the digital properties to drive the segment trajectory from here,'' the broker said.

    Both Domain and dominant rival realestate南京夜网.au, majority-owned by News Corp, are focused on selling premium advertising slots to real estate agents, rather than relying on subscriptions.

    Credit Suisse said a Domain IPO ''would be a significant share price catalyst'' but it did not factor this in to its 91¢ share-price target. Fairfax shares closed 2.8 per cent higher at 92.5¢ on Monday, taking its year-to-date rise to 44.5 per cent.

    This story Administrator ready to work first appeared on Nanjing Night Net.

  • Caltex Australia boss confident of burning off any newcomers

    The refining industry is in upheaval.Caltex Australia chief executive Julian Segal has dismissed concerns that tough new rivals in fuels retailing will eat into the company's market share and margins, despite pointing to a likely step-up in competition in specific areas.
    Nanjing Night Net

    After reporting a 27.5 per cent drop in benchmark full-year profit to $332 million, in line with guidance, Mr Segal retained Caltex's forecast for 5 per cent annual growth in earnings before interest and tax for the marketing business. Marketing EBIT in 2013 rose 4 per cent to a record $764 million, a stark contrast to the $171 million deficit for the refining business, which is being restructured to stem losses.

    Australia's refining and marketing industry is in upheaval, with refinery closures, divestments and new international traders entering the market.

    Last Friday, Shell announced the sale of its Geelong refinery and Australian petrol station business to crude oil trading giant Vitol for $2.9 billion, while Trafigura's Puma Energy operation has made several acquisitions of fuel retailers in the past 12 months.

    ''We are a force of stability in this market,'' Mr Segal said. ''It is about reliability of supply and also product quality.''

    He said Caltex's timely investments in infrastructure and the supply chain, in converting its Sydney refinery to an import terminal and sourcing more fuel from Singapore stood it in good stead in the new, tougher environment.

    ''What it takes to be successful in this industry, it's about competitive supply,'' he said. "The likes of the new players coming into the market are all about big volumes, one product kind-of shipments.''

    UBS analyst Nik Burns said Caltex had a good record in growth in pre-tax earnings in marketing, getting close to its 5 per cent growth target even last year when it suffered an interruption to premium petrol supply in Sydney and a rapid weakening in the Australian dollar.

    ''They have delivered to date, so the market has been willing to give them the benefit of the doubt,'' Mr Burns said.

    Caltex's first-half net operating profit was just higher than the mid-point of December guidance of $320 million-$340 million.

    Bottom-line net income, which includes the impact of changing oil prices on the value of crude stockpiles, surged more than ninefold to $530 million from $57 million the previous year, when Caltex took $309 million of charges connected with the conversion of its Kurnell refinery in Sydney to an import terminal.

    Caltex shares rose 2.2 per cent to $20.94, their highest close for almost eight months.

    Caltex declared a final dividend of 17¢ a share. The full-year payout of 34¢ a share is down from 40¢ for 2012 as Caltex has cut the payout ratio while it is converting the Kurnell refinery, which is due to be finished in the December quarter.

    This story Administrator ready to work first appeared on Nanjing Night Net.

  • BlueScope fights back as sales in some key markets rebound

    BlueScope shares have closed up 7.3 per cent at $6.30 - their highest level since mid-2011. Photo: Louie DouvisShares in BlueScope surged on the emerging turnaround at the steel maker due to firmer domestic demand, along with buoyancy in North America and selected Asian countries.
    Nanjing Night Net

    Its shares closed up 7.3 per cent at $6.30 - their highest level since mid-2011. Even with the improvement, the group was guarded in its forecast, pointing out the underlying net profit in the second half would be ''similar to'' the first half.

    The December-half net profit reached $3.7 million, a reversal from the loss of $23.8 million a year earlier. The underlying net profit stood at $49.1 million, up from the loss of $1.6 million a year earlier.

    Higher volumes and improved margins underpinned the turnaround, it said, although planned blast furnace shutdowns would weigh on earnings.

    ''We're certainly on the road to recovery,'' BlueScope chief executive Paul O'Malley told analysts on Monday, pointing to a rise in domestic volumes and continued strength in the US.

    China remains an area of caution, however, as growth slows. ''China is clearly going to be challenging over the next few years,'' he said. ''China market activity has dropped pretty dramatically.

    ''We are seeing negative growth at the moment, as it moves from high growth to productivity [led] growth'', going on to point to a ''slowdown in building activity in China''.

    Domestically, BlueScope said there had been a rebound in the residential construction sector, most notably in NSW and south-east Queensland, with industrial demand ''pretty flat''.

    ''We are actually seeing an improvement in domestic demand'' for the first time in four years, Mr O'Malley said.

    BlueScope said it supplied about 70,000 tonnes of steel annually to the Australian auto industry, which is at risk with the shutdown of the domestic industry.

    Activity in North America and New Zealand remained strong, with BlueScope boosting output from its Taharoa iron sands unit, where it enjoys robust margins.

    The Australian operations continue to drag on the group's performance, with the domestic coated and industrial products division posting a net loss of $900,000, reversing the small $2.4 million profit recorded a year earlier. However, at the underlying level it posted a net profit of $26.9 million, rebounding from the year earlier loss of $10.6 million.

    Similarly, the building products and steel distribution arm remained unprofitable, with a December-half net loss of $10.9 million, little changed from the $10.5 million loss a year earlier, while at the underlying level, it was also in the red with a net loss of $10.9 million, up from a loss of $7.1 million a year earlier.

    This story Administrator ready to work first appeared on Nanjing Night Net.

  • Search for tangible benefits of G20 ‘talkfest’

    Worthy aspiration: JPMorgan's Stephen Walters.Have political leaders ever run a campaign calling for slower economic growth? That's one question that sprang to mind at Sydney's G20 summit last weekend as journalists repeatedly asked finance ministers and central bankers about ''soft targets'', ''hard targets'' and ''tangible targets''.
    Nanjing Night Net

    The focus on growth targets was, of course, a key part of the recently installed federal government's push to nail down the economic leaders to what Treasurer Joe Hockey hopes would be a concrete agenda.

    After the lack of any progress at the annual forum in St Petersburg last year, and with the final communique running to almost 30 pages, there was a general desire to bring the gathering back to its roots of focusing on economic co-operation and goals.

    Yet, after what was seen as a win for the Treasurer in including a specific target in the (thankfully, only two-page-long) communique, was anything truly achieved at what has been described as just another international talkfest?

    First, economists are quick to point out that having a target, in itself, is a win for Australia's presidency of the G20 this year. Past summits have been a lot more vague and, as such, a specific figure is a ''worthy aspiration'' for a group of nations that control more than 80 per cent of the world's economy, JPMorgan's chief economist for Australia Stephen Walters said.

    But questions remain about how much action will result from a non-binding agreement, and how any progress will be measured.

    ''You mean they really weren't trying before?'' quips National Australia Bank chief economist Alan Oster.

    ''I haven't changed my growth forecasts. It's easy to say, 'Let's grow faster', but the question is how. That's the problem I have with it and that was what I was expecting all the way along.''

    For Mr Walters, it is a question of how any such growth could and would be measured, and whether, come November, the participating countries would even remember they had signed up to the voluntary target.

    ''What would growth have been without the agreement?'' Mr Walters asked. ''Measuring is going to be extremely hard and domestic politics will always kick in.''

    The communique touched on structural reform, such as through lifting employment and participation, and enhancing trade and promoting competition. But again, these are standard goals to which any politician aspiring for higher office would subscribe.

    Even less tangible was the communique's two paragraphs on how monetary policy would be ''carefully calibrated and clearly communicated'' - a nod to emerging nations' gripes that the wind-back of developed countries' stimulus programs (read United States) was causing economic and market volatility.

    As analysts readily point out, central banks' mandates are domestically focused, and their governors would be remiss to place the concerns of other countries above their own.

    This story Administrator ready to work first appeared on Nanjing Night Net.