Pay TV company Austar posts 46% profit drop, Shares flat: Economy Roundup

Pay television operator Austar announced a 42% drop in first-half profit today, but says it will perform better in an “exciting” second half.

Net profit was $20.69 million for the six months ending 30 June, compared to the $35.5 million recorded during the previous corresponding period.

Operating expenses increased by $3.19 million to $130.8 million due to increased efforts in advertising and marketing.

“As we work through this difficult consumer environment to regain our growth momentum, we have continued to exercise strong cost control, and this discipline is evident from our financial results,” chief executive John Porter said in a statement.

“The digital switch-over, meanwhile, has occurred in Mildura, and regional South Australia will take place next. We have found that the digital switch-over offers an even greater opportunity for AUSTAR as consumers want a quality, multi-channel experience.”

Centro Properties Group has completed its financing arrangements for about $US2.7 billion in debt, while the restructure of the entire company’s business continues.

In a statement the company said the new financing arrangements include an extension of about $US2.3 billion, and a refinancing of over $US400 million.

“These extensions and new financing transactions are important initial steps in the ongoing assessment of the Group’s restructuring considerations,” group chief executive Robert Tsenin also said.

“We have made good progress and have commenced discussions with our lenders on potential restructuring options we have under consideration.

Macquarie Group chief executive Nicholas Moore has told Fairfax Media investors are still interested in infrastructure despite the sector’s overall poor performance. He also said he is confident about China’s long-term growth with economic improvements expected by the end of the year.

“The Chinese economy is slowing because the government is trying to slow it,” he said.

“We believe the government will take its foot off the brakes by the end of the year and Chinese growth will increase again.”

Shares flat after Wall Street decline

The Australian share market has opened lower today, following a weak result in the US where investors have been dealt a blow in confidence following a disappointing economic outlook from the Federal Reserve.

The benchmark S&P/ASX200 index was down 18 points or 0.41% to 4511.3 at 12.55 AEST, while the Australian dollar remained flat at US89c.

ANZ shares lost 1.1% to $22.98, while Commonwealth Bank shares also lost 0.6% to $52.29. Westpac fell 1.3% to $23.83 as AMP fell 0.2% to $5.32.

In the mining sector, union and non-union workers are being prosecuted by the Australian Building and Construction Commission due to a number of strikes that occurred in January over the $12 billion Pilbara project.

“We think it’s atrocious in a democracy like Australia that workers are prosecuted to this extent for taking any form of industrial action,” Construction, Forestry, Mining and Energy Union construction division secretary Kevin Reynolds told Reuters.

“But that’s the nature of the governments we live under today, be it Labor or Liberal, they’re all the same.”

Japanese retail sales continue to grow

Japanese retail sales have continued to grow in a six consecutive months due to government stimulus, but various analysts say that growth will slow later this year as the effects ware off.

Sales grew by 3.2% in June, compared to the previous corresponding period in 2009, following a 2.9% annual gain in May, the Ministry of Economy, Trade and Industry revealed.

“The positive effect from stimulus is becoming more subdued,” Yasuo Yamamoto, a senior economist at Mizuho Research Institute in Tokyo, told Reuters.

“There could be some front-loading of car purchases before those subsidies expire in September, so third-quarter consumption could be somewhat strong. However, in the fourth quarter consumption is likely to fall.”

In the United States, stocks dropped on Wall Street due to a negative assessment of the country’s economy in the Fed Beige Book. The Dow Jones industrial average dropped 39.81 points, or 0.38%, to 10,497.88.