Global miner Rio Tinto Ltd
(ASX:RIO) says the long term outlook for aluminium remains robust however it remains cautious in the short term.
The mining giant also says cash preservation remains a key priority for its aluminium business.
In an analyst presentation, Rio’s aluminium division says that the long term story for aluminium continues to be attractive with 4.1 per cent growth in aluminium expected over the next two decades.
Rio says signs of recovery for end users of aluminium remains mixed, however prices continue to rise due to increasing optimism about global growth, depreciation of the US dollar and China becoming a net importer of unwrought aluminium.
Rio Tinto Alcan chief executive Jacynthe Cote says the company’s aluminium business has been earnings before interest, tax, depreciation and amortisation positive in the first half and its break even price for aluminium was US$1350 a tonne at the end of the second quarter. Rio Tinto’s 2008 net profit more than halved from the year before.
Australian airline Qantas Airways Ltd (ASX:QAN) says the global economic outlook remains uncertain and that the company is yet to see substantial improvements in underlying business conditions.
The airline says there are many factors in play that could affect the timing of a recovery.
Qantas says uncertainty is also being created through significant capacity increases, domestically and internationally, by Qantas Group competitors, some of who it says enjoy very favourable taxation and other arrangements.
Chairman Leigh Clifford says with the strengths of its two flying brands, strong management, and dedicated people, the Qantas Group is well positioned to withstand this period of downturn, and will be ready to grasp opportunities fully during the eventual recovery.
In August Qantas reported a $117 million net profit for the 12 months to June, down from $969 million the year before.
The company also announced plans to reduce costs by $1.5 billion over the next three years starting with $500 million this financial year. Qantas has posted inconsistent net profits over the last five years.
Forestry company Gunns Ltd (ASX:GNS) says it has submitted a conditional proposal to the liquidator of Timbercorp to acquire certain forestry assets.
Gunns says it has held discussions with potential providers of debt and a joint venture partner in relation to the potential acquisition.
The proposal will involve Gunns, together with a joint venture partner, acquiring the land, trees and forestry operations businesses from Timbercorp.
Gunns says the proposal is conditional and there is no guarantee that the conditions will be satisfied nor that its proposal will form a basis for completion of a transaction.
Gunns says it will advise the market of any developments and says it understands the liquidators’ intention is to reach agreement before September 30 2009. Gunns profits have been decreasing year on year for the past four years.
Hardware chain Mitre 10 is concerned that the entry of Woolworths Ltd (ASX:WOW) in the hardware sector will create a duopoly between the grocery retail giant and hardware giant Bunnings.
According to a report in The Australian Financial Review, CEO Mark Burrowes is urging the Australian Competition and Consumer Commission to consider the potential ramifications for the industry if a duopoly between Woolies and Bunnings emerges.
The paper reports Mr Burrowes saying that there is an abundance of examples where a duopoly has occurred in an industry and its not good for the consumer, saying that what looks good today may not look so good in two of three years when a duopoly is in place.
The ACCC is investigating the impact of Woolworths and joint venture partner Lowe’s takeover of hardware chain Danks Holdings.
According to the Fin Review both Lowes and Woolies believe there is room for another major big box retailer in Australia and the hardware sector, saying that about 60 per cent of the market is made up of independents. Woolworths reported a profit of $1.8 billion in 2009.
