Wesfarmers net profit jumps 44%, AMP profit down: Economy roundup

Wesfarmers, which owns the Coles supermarket chain, has recorded a 44% rise in net profit and says it is optimistic about the 2010 financial year.

The company recorded a profit of $1.54 billion for the year ended 30 June, but the company’s shares fell by 4.75% to $25.24 following the announcement.

“Wesfarmers remains cautiously optimistic about the economic outlook over the next 12 months although cognisant of a degree of ongoing fragility,” the company said in a statement, recognising that economic conditions remain challenging.

“Underlying retail trading conditions remain somewhat volatile and difficult to predict despite recent signs of growing consumer confidence,” Wesfarmers said.

Meanwhile, the Australian share market has opened higher today after positive results on Wall Street, where energy stocks performed well.

The benchmark S&P/ASX200 index was up 23.6 points or 0.54% to 4397.4 at 12.05 AEST. The Australian dollar also moved up to US82c.

NAB shares moved up by 0.7% to $27.00, with Commonwealth Bank shares also increasing to 0.3% to $45.09. ANZ shares fell by 0.2% to $19.77, while Westpac shares increased by 0.2% to $23.59.

AMP records 16% drop in profit

Financial services group AMP reported a 16% decline in underlying profit, but announced that it will restructure the business ahead of some regulatory changes and an improvement in economic conditions.

The company’s underlying profit fell to $367 million during the first half of 2009, compared to $437 million during the same period last year.

“We’re not only facing regulatory change but we can also see significant shifts in

consumer behaviour,” AMP chief executive Craig Dunn said in a statement.

“AMP is investing to reshape the business…[which] involves a series of important change programs, including initiatives to unbundle fees from products and supporting planners to operate on a fee-for-service basis,” Dunn said.

AGL Energy increased its net profit by 11% to $378.8 million during the 2008-09 year, the company announced, saying all areas of the business are set to grow.

“We have delivered on our upgraded profit guidance, strengthened our balance sheet, and strategically positioned the company to grow across all aspects of our business,” chief executive Michael Fraser said in a statement.

“We now have a balance sheet which allows us to continue developing our pipeline of renewable and low-emission generation, and upstream gas, projects and positions us to take advantage of other opportunities as they arise.”

Brambles profit falls, US deficit to shrink

Pallet-maker Brambles has reported a 33% decline in full-year profit due to lower sales in the US and Europe, but the company says it will grow as the economy recovers.

The company reported a $434 million profit after tax, compared with a $646.9 million profit for the previous year. Sales revenue jumped 1% to $Us4 billion.

“Even though our underlying profitability in FY09 has been adversely affected by a number of factors, we expect many of those will turn around quickly when markets improve,” chief executive Mike Ihlein said in a statement.

In the US, Wall Street rose as investors responded to a drop in crude oil stockpiles, suggesting an improvement in the outlook for demand. The Dow Jones Industrial Average increased by 61.22 points or 0.66% to 9,279.16.

Also in the US, the Federal Government’s budget office is set to announce next week that the federal deficit will be just $US1.58 trillion – about $US262 billion lower than a forecast made in May, a source has told Reuters.

The decline mans the total deficit will now equal 11.2% of GDP.