Gorgon LNG project given government approval, Seven Network profit plunges: Economy roundup

Federal environment minister Peter Garrett has authorised the multi-billion dollar Gorgon LNG project, which will create 6,000 jobs at its peak in an expansion of liquefied natural gas across Australia.

“I’ve considered it very carefully, I don’t believe that there will be unacceptable impacts and, as a consequence of that, I have made my decision,” Garrett told reporters today.

The Government approved the project subject to certain conditions on managing the local wildlife.

New figures from the Australian Bureau of Statistics show total construction work fell a seasonally adjusted 0.1% to $35 billion during the June quarter, after a revised fall of 2.2% during the March quarter.

The seasonally adjusted estimate of building construction fell 5.7% to $16 billion, with residential construction falling 2.6% to $9 billion and non-residential building falling 9.6% to $7 billion.

The Australian sharemarket has opened higher today after good results from Wall Street, where investors were relieved by President Barack Obama’s announcement that Ben Bernanke will chair the Federal Reserve for a second term.

The benchmark S&P/ASX200 index was up 37 points or 0.84% to 4442.8 at 11.30 AEST. The Australian dollar also moved higher to US83c.

NAB shares rose 0.5% to $27.12, with AMP shares also increasing 2.1% to $6.43. ANZ shares rose 0.9% to $19.98 while Commonwealth Bank shares also gained 0.8% to $44.67.

Seven Network profit falls 91.2%

The Seven Network has recorded a 91.2% drop in profit due to a major writedown of several of its assets, including investments in Seven Media Group and West Australian Newspaper Holdings, but says its balance sheet is strong.

“This result reflects the writing down of investments with Seven Network Ltd’s adoption of a conservative outlook given the current global economic difficulties,” Seven said in a statement to the ASX.

Seven is suspected to be considering a takeover of James Packer’s Consolidated Media Holdings, as it has increased its shares in the company to the maximum amount that it is allowed before launching a takeover bid.

Shares in Babcock & Brown Infrastructure Group have jumped 81% after the company recorded a $977.1 million loss. Managing director Jeff Kendrew said in a statement that the company has progressed, with total revenue increasing 16.8% to $1.4 billion.

“Operationally the business performed solidly, particularly given the very difficult market conditions,” he said.

“However, challenges remain for BBI and the board and management are focussed on stabilising the capital structure by continuing to pursue asset sales and assessing options to meet upcoming debt maturities.”

Clothing manufacturer Pacific Brands has posted a $234.3 million loss due to writedown charges and expenses and non-cash asset impairments. But it says it has a strong balance sheet after completing an equity raising and refinancing debt.

“In the past six months we have made good progress implementing our Pacific Brands 2010 strategy to transform and strengthen our business model. Our cost base is being restructured through overhead reductions and manufacturing closures, brands have been discontinued and stock-keeping units (SKUs) reduced,” the company said in a statement to the ASX.

Asciano Group profit up, shares in US rally

Transport infrastructure company Asciano Group has recorded a $71.8 million profit for the full year, with chief executive Mark Rowsthorn saying in a statement the company is performing well following tough times.

“The solid result is a testament to the diversity of our business base, with our bulk businesses continuing to perform well, and to the quality of our assets and operations,” he said. “It is also a reflection of our rigorous focus on cost management during the year.”

“While there are signs that a number of our businesses have seen volumes stabilise following significant weaknesses during the March quarter, there remain few, if any, signs of an imminent recovery in the domestic and international economies.”

In the US, Wall Street socks rose after Ben Bernanke was appointed chairman of the Federal Reserve for a second term. The Dow Jones Industrial Average rose 30.01 points, or 0.32%, to 9,539.29.

Also in the US, the Congressional Budget Office has said in its assessment of the federal budget and economy that the $US787 billion stimulus package passed earlier this year helped recovery efforts.
“Economic activity will begin to rebound in the second half of 2009, largely the result of fiscal stimulus,” the CBO said.

“The Recovery Act, even while it added to the short-term deficit, staved off catastrophe and is bringing this recession to an end,” house majority leader Steny Hoyer said after the CBO report was released.