Current

(NAB)

1H12 - Strong underlying performance with dividend upside

Financial results for 1H12 are in line with the pre-released $2.82bn NPAT, up 6% on 1H11, with EPS up 3% and the 90cps fully franked dividend up 7% on the pcp. No headline surprises as the UK disappointment is already known. Underlying earnings (pre-provision, pre-tax) surged 7% on both 1H11 and 2H11, supporting the strong dividend increase. Statutory profit fell 16% to $2.05bn due to the UK restructuring provision. Strong volume growth in both loans and deposits was offset by higher deposit and wholesale funding costs, causing a fall in net interest margins from 2.28% to 2.17%.
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Previous

(WBC)

1H12: Solid result, earnings inline but dividend surprises

No surprises for us in the 1% increase in underlying cash NPAT to $3.2bn, but earnings were about 3% ahead of consensus. What did surprise is the 8% increase in interim dividend to 82cps (ff) payable 2 July, as we expected 78cps. Statutory profit fell 25% to $2.97bn due to a tax consolidation credit in 1H11. Revenue increased 5% outpacing the 4% increase in costs, delivering a 5% increase in core earnings. A welcome rebound in trading profits boosted non-interest income after a soft 2H11. Areas to watch include bad debts, which were up 31% but off a very low 1H11. Credit quality is under minor pressure, particularly in small-medium enterprises (SME) and residential, but nothing too alarming.
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(WES)

Retail's solid performance - Coles and Coal arm wrestle

In the context of a competitive, deflationary and weather affected environment group 3Q12 retail sales performance is pleasing. The quarter also cycled relatively high growth in 3Q11. The features were continued solid, albeit slower growth at Coles, a reasonable performance at Bunnings and a return to positive growth at Kmart. Total retail sales for 3Q rose 3.9% to $11.5bn with year to date total sales up 4.9% to $37.9bn. Separately management provided details of 4Q coal price outcomes and caution over continuing delays in commissioning the new coal preparation plant at Curragh. The weighted average US$FOB contract prices for Curragh metallurgical coal for 4Q is US$201 per metric tonne and is slightly below our US$205 estimate. Higher operating costs, delays in commissioning and associated problems and a slightly lower 4Q price sees a conservative reduction in Resources EBIT from $560m to $475m.
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(RIO)

Soft First Quarter

When compared to the final quarter of 2011, first quarter 2012 iron ore volumes fell 12% to 45.6 million tonnes. This was in line with expectations with three tropical cyclones temporarily shuting down Western Australian ports. Railed volumes in the Pilbara were in fact at record first quarter levels necessitating significant inventory build. Iron ore's prominence for the nearer term reflects not only expansion and favourable prices, but also that other businesses are struggling. First quarter copper production fell 15% to 120,000 tonnes off an already weakened base. Aluminium production weakened 13% to 9,500 tonnes. To a certain extent irrelevant because aluminium isn't making any money anyway. Australian coking coal was again hit by Queensland weather, production falling 47% to 2.3Mt. Thermal coal fared better, down just 7% to 4.1Mt.
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(GMG)

Dropping in on a development wave

Following the recent EGM vote, GMG securities will undergo a 5-for-1 consolidation, with 18 April 2012 being the last day that GMG securities will trade on a deferred settlement basis.
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