Bernard Tomic likely to return at Monte Carlo after hip surgeries

The Monte Carlo Masters in mid-April is the probable where and when of Bernard Tomic’s tournament return, but it may be the how that proves to be most significant, with Tomic’s physiotherapist predicting he will eventually move up to 30 per cent more freely than before January’s pair of hip surgeries.
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Having managed Lleyton Hewitt’s successful rehabilitation from twin hip operations, performed 17 months apart in 2008 and 2010, Ivan Gutierrez is overseeing Tomic’s recovery from procedures on his left and then right hip in the week after he controversially retired from his Australian Open first round against Rafael Nadal.

The surgeries corrected a lifelong structural problem by reshaping the head of the 21-year-old’s femur, or thigh bone, to allow more range of movement, and also repaired labrum and ligament tears. Gutierrez said world No.5 Juan Martin del Potro suffered from a similar issue that tended to tighten and worsen with age.

Some can be managed; Tomic’s ultimately could not.

”For having had bilateral hip surgery, he’s doing very well, a little bit better than I thought he would at this time,” said Gutierrez, the Australian Open’s head physio, who also has extensive AFL experience.

”All the time that we’ve been working together he’s been committed to the treatment, and he knows the importance of it because all his career is just going to hinge on that, and hopefully he will be back soon and be able to play without pain, and regain more flexibility than he used to have.

”He’s been very restricted, because tennis being a flexion, or bent-over type of a sport, and him being so tall, his limitations were significant, especially playing on grass and hard courts. It forced him to bend a little bit more than he had to, hence irritating the hip joints a little bit more than you normally would.

”Now he has much more rotation both ways – internal and external – so he’ll be able to displace and change direction a little bit better, so I think he’ll be much more comfortable with his movement on court … I’m expecting between 20 to 30 per cent on what he had. We’re hoping for 30, but 20 would be great.”

Tomic has been swimming and cycling, and recently resumed hitting balls from a largely stationary position. A Monte Carlo comeback suits the time frame, 12 weeks post-operative, and clay the most suitably benign surface.

Hewitt, too, has been physically compromised in recent times, having withdrawn with a shoulder injury one set into his all-Australian clash with Marinko Matosevic last week at Delray Beach.

Hewitt will rest and continue with strengthening exercises ahead of an exhibition next Monday in Hong Kong, with Indian Wells and Miami to follow.

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Transfield Services shares soar after it wins offshore detention centre contract

Investors in Transfield Services have turned a blind eye to political risk attached to a $1.22 billion immigration detention centre contract, sending shares in the facilities management group soaring.
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Transfield shares climbed 24.5 per cent to 99¢ in heavy trade on Monday after the company said the Abbott government had granted it a 20-month contract to operate a centre on Manus Island in Papua New Guinea that has been beset by deadly violence.

The new deal expands on Transfield’s existing contract to run the government’s other offshore detention centre, on Nauru, and increases the amount the government will pay to run the two centres from about $39 million a month to about $61 million a month.

Transfield, which was until October chaired by Tony Shepherd, who is heading the government’s Commission of Audit, replaces UK-listed G4S. Violence at the centre last week claimed the life of one detainee and forced the Minister for Immigration, Scott Morrison, to admit he had initially provided incorrect information about the fracas.

G4S is to be investigated by the Immigration Department over its role in the deadly violence. It faces a separate criminal investigation in the UK for allegedly overcharging the British government.

Simon Fitzgerald, an analyst at Moelis & Company, said the Manus Island contract was ”very politically sensitive and controversial”.

”This is where companies can get into a lot of trouble, because there’ll be a lot of scrutiny of how smoothly it operates,” he said.

But he pointed to Transfield’s work cleaning up the government’s troubled pink batts program as evidence it had experience working on politically sensitive projects.

Transfield said the increased cost of the contract was due to higher security costs, more complex travel needs and tax rates in PNG being higher than in Nauru.

Spokesman David Jamieson said Mr Shepherd’s role at Transfield had nothing to do with it winning the contract. ”We believe our success on this bid was due to our ability to rapidly mobilise for Nauru and our ability to manage that facility to the department’s satisfaction.”

The company will subcontract security on Manus to Wilson Security, as it already does on Nauru.

It will continue to use some PNG locals as security, even though G4S local staff have been accused of perpetrating some of last week’s violence.

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Matildas look to fake turf foredge

Matildas’ Lydia Williams with Sports Technology International and Steve Jones ASC General manager of Corporate operations have signed a contract to develop a FIFA two star outdoor synthetic pitch at the Australian Institute of Sport which will assist the Matildas in the lead up to the 2015 World Cup in Canada. Photo: Elesa KurtzCanberra United goalkeeper and player of the year Lydia Williams thinks it’s bizarre they will be playing next year’s World Cup on synthetic pitches in Canada, but the installation of a new artificial pitch at the AIS will give the Matildas an edge on the sport’s biggest stage.
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And the Matildas stopper called for a women’s equivalent of the FFA Cup, which was launched in Sydney on Monday.

The AIS will start installing a new $600,000 artificial pitch next week – the same surface German giant Bayern Munich train on. It will be completed by the end of April.

It will form a vital cog in the Matildas’ preparation for the 2015 Cup, which will be predominantly played on synthetic turf.

While Williams said it would be nice to play on grass, she felt artificial turf could be the way of the future.

She was one of three keepers named in the Matildas’ 23-woman squad for the Cyprus Cup from March3-13, where they will play France, Holland and Scotland in the group games.

Striker Michelle Heyman was the only other Canberra United player selected.

”It’s a little bit bizarre I guess [to play on artificial pitches], but … a lot of fields are getting changed to synthetic so maybe the next couple of years we might all be playing on synthetic pitches,” Williams said.

”It would be nice to play on grass since all the league is on grass.

”The newer the pitch the better it is and hopefully that will give us the edge we really need to start focusing in on the [World Cup] competition.”

The FFA announced the structure of its new national knockout cup competition, which gives local clubs such as Tuggeranong United the chance to play against A-League teams.

Williams said it would be great for the women to have a similar competition as well, pitting the eight W-League clubs against state league teams from around the country.

Williams will leave for Europe with the Matildas on Wednesday, with their first game a week later against Scotland.

MATILDAS SQUADTeigen Allen, Laura Alleway, Nicola Bolger, Hannah Brewer, Tameka Butt, Kim Carroll, Stephanie Catley, Emma Checker, Brianna Davey (goalkeeper), Casey Dumont (gk), Caitlin Foord, Kathryn Gill (captain), Katrina Gorry, Michelle Heyman, Elise Kellond-Knight, Alanna Kennedy, Sam Kerr, Leena Khamis, Chloe Logarzo, Hayley Raso, Gema Simon, Emily Van-Egmond, Lydia Williams (gk).

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New ways to fund infrastructure needed, says World Bank chief Bertrand Badre

The World Bank’s managing director, Bertrand Badre, concedes global rules to make banks safer will restrict lending for infrastructure needed to reignite economic growth.
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But, in a swipe at banks hoping to have the regulations watered down, he says there is ”no way back” and the world must find new ways to fund large projects from outside the banking sector.

Speaking in Sydney on Monday, Mr Badre argued that mobilising trillions of dollars for infrastructure investment should be one of the world’s top priorities. ”If you don’t have a proper flow of credit, if you are not able to finance infrastructure properly, there is no way that global growth will come back to the way it was before the crisis,” he said.

Bank balance sheets previously played a key role in funding such projects but, he said, this would no longer be the case, because of tougher rules on bank risk-taking.

”You have to get used to a different model, a different financing model. I think that’s where we have to adapt, there is no way back,” he said. ”I don’t think you will have massive leverage of financial institutions authorised by any regulator in the near future.”

His comments highlight a key dilemma facing officials at the recent G20 meetings in Sydney.

Governments want to foster private sector investment to create jobs, and see infrastructure as critical to these goals. However, they also want tighter rules on bank risk-taking.

Senior global bankers including UBS global chairman Axel Weber and Goldman Sachs chief operating officer Gary Cohn warned that overly cautious regulations will restrict banks’ ability to lend, undermining hopes of economic recovery.

Mr Badre, a former chief financial officer of Societe Generale and Credit Agricole, said there was no turning back on finance regulation, and the world had to find new ways to fund infrastructure.

He said institutional investors such as pension funds, sovereign wealth funds and insurance companies must play a bigger part in funding infrastructure. ”Banks will be less involved with their balance sheets than they were before. Now we need to turn to the regulation of institutional investors.”

According to estimates quoted by Mr Badre, institutional investors have some US$79 trillion ($88 trillion) in assets. Governments would like to see more of this ploughed into infrastructure such as transport or green energy developments. But key institutional investors at a G20 conference last week said they still faced roadblocks, including unfavourable regulations and policy uncertainty.

Mr Badre said governments needed to make infrastructure a ”simple and attractive” asset class.

Mr Badre is the latest senior official to dismiss bank lobbying for watering down post-GFC regulation. Bank of England governor Mark Carney rejected claims the tighter rules would lead to an explosion in shadow banking, while Australian Prudential Regulation Authority chairman John Laker argued against ”turning back the clock on regulatory reform”.

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Boart Longyear $691m loss may prompt sale of division

Boart Longyear faces challenging times.Mining services company Boart Longyear may be forced to hive off one of its divisions after it plunged to a $US620 million ($691 million) loss in 2013 due to a sharp downturn in spending from global miners.
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Boart has appointed investment bank Goldman Sachs to lead a strategic review of the company, with its products and drilling services divisions potentially in line to be sold as it grapples with weakness in its core markets.

The Utah-based company’s shares closed down 15 per cent after it failed to provide earnings guidance for 2014 due to ongoing industry volatility.

The company has again negotiated new financial covenants to cover its debt, with quarterly checks to be performed on the business to include minimum cumulative earnings over the last 12 months of $US45 million until March 31, 2015.

It blamed the weak result on an ”extremely challenging year” for the global resources industry as major miners slashed exploration, development and capital expenditure budgets during the 12-month reporting period.

It warned that analysts estimates of $US979 million in revenue and $US77 million in earnings may not be based on current industry conditions.

Boart also said the number of drill rigs being used by its clients has fallen below 2009 levels to just 38 per cent in 2013, from 56 per cent in 2012. ”We continue to work hard to hold price,” Boart chief executive Richard O’Brien said. ”But as I said about 60 per cent of the world’s drill rigs [are] not utilised, [so] we are expecting price pressure.”

Boart said the review aimed to preserve the value of the drilling services and products divisions, ensure the company continues as a going concern while capturing future growth when the market recovers.

”Each time the company reports, we think they have stabilised, yet the business continues to deteriorate,” Deutsche analyst Craig Wong-Pan said.

Boart recorded an adjusted net loss for 2013 of $US94.3 million, in line with expectations, and canned its dividend after paying out 1¢ a share the previous year.

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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.
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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.

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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.
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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.

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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.
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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.

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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.
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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.

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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”.
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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.

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