Flight Centre profit up 38%, Shares slide on volatile overseas markets: Economy Roundup

Flight Centre has recorded a 38% increase in first half profit to $70.5 million, with the company saying strong sales and higher confidence are delivering good results.

Managing director Graham Turner said improvements were recorded in all of the company’s markets, and also said the Australian business is generating the majority of the company’s profit, but added overseas markets are “gaining scale and were likely to make an increasingly valuable contribution in the future”.

However, the company also said that the revolution in Egypt, cyclones in Queensland and floods all along the east coast had impacted tourism, and warned that customers have been “cautious and value-focused”.

Shares lower after mixed overseas results

The Australian sharemarket has opened lower this morning following a volatile performance on overseas markets late last week, with commodities ending lower despite good leads from Wall Street.

The benchmark S&P/ASX200 index was down 48 points or 0.99% to 4888.1 at 12.15 AEST, while the Australian dollar continued to rise above $US1.01.

AMP shares gained 0.18% to $5.61 as Commonwealth Bank shares lost 1.16% to $53.57. Westpac lost 0.78% to $24.02 as ANZ dropped 1.04% to $24.63.

Caltex optimistic despite profit fall

Caltex Australia has reported a $318 million drop in underlying profit but says it is optimistic about the company’s medium-term outlook.

“It is anticipated that the excess supply in the Asia Pacific region should slowly decline as the growth in demand of product in non-OECD countries is likely to offset the decline in demand expected in OECD countries,” Caltex said in a statement.

The company added that production at the Lytton refiner has not returned after heavy rain in January.

Amcor profit rises but dollar hits earnings

Packaging group Amcor has recorded a 138% increase in first half profit to $226.1 million but has warned the Australian dollar is hurting its financials to the tune of $49.5 million.

The company said it expects earnings to be “substantially higher in the second half of the year than they were in the second half of last year”.

“For the year ended June 30, 2011, synergy benefits will be in the range of $100 million to $120 million, which is consistent with the guidance at the time of the full year results in August 2010,” Amcor said.

“Given the appreciation of the Australian dollar of approximately 25% against the Euro since the time of the prospectus in August 2009, this effectively means there has been a substantial upgrade of synergies, expressed in local currency terms.”

G20 members agree on new finance deal

Ministers attending a G20 conference in Paris have reached a new agreement on how to measure imbalance in the global economy.

French finance minister Christine Lagarde, said the deal would help coordinate financial policies worldwide.

“It wasn’t simple. There were obviously divergent interests but we were able to reach a compromise on a text that seems to us to be both balanced and demanding in its implementation,” the minister told a news conference.

US treasury secretary Timothy Geithner also added that “there is broad consensus that the major economies, not just Europe, Japan and the United States but also the large emerging economies, need to allow their exchange rates to adjust in response to market forces”.

Woodside net profit rises 6.9%

Resources giant Woodside was recorded a 6.9% in net profit with higher commodity prices negating a fall in production, the company said this morning.

The firm said net profit was up to $US1.58 billion, with underlying profit also up by 35% to $US1.42 billion. Sales revenue increased by 20% to $US4.19 billion due to stronger commodity prices.

The company has still not announced a replacement for outgoing chief executive Don Voetle.