Caltex closing Sydney refinery, shedding 630 jobs. Only way to end losses which reached $200 million last year. Carbon tax did no come into the decision. Caltex is Australia’s biggest refiner and marketer. Value of its two refineries already written down by $1.5 billion. Second Brisbane plant will remain open for now. Shares rose 1.4% on the news. Competition faced from weak margins, small and outdated plants, tougher competition from mega-refineries in China and India, and the robust Aussie dollar. Caltex will take a $430 million charge to cove the closure costs, and a further $250 million will be invested in the conversion of the plant to an import terminal. [CR: Same thing seen in any manufacturing, converting local producers into an import service.]
Eatability.com sold to Sing Tel-Optus for $6 million. Launched in 2003 as a way to find good restaurants in Sydney, 12-employees, has millions of monthly visitors, over 235,000 user-generated reviews on 37,000 restaurants nation-wide. The purchase is part of the telco’s drive to get local content to get customers onto its smartphone apps and mobile network. Optus recently started $2 million seed funding program for start-ups and bought a Singaporean food site HungryGoWhere. [CR: I wonder how much longer stories like these will continue to pop up, or if this is the new paradigm.]
Olympics - BBC lack of ad breaks and sponsorship value: Games broadcast on the BBC changes traditional value of increased brand recognition and revenue. Companies leveraging sponsorship for internal employee motivation and performance. Example: instances of 8% increase in phone complaints being resolved for the first time. [CR: I can attest to this, building internal company pride for the work that is recognised in the market.]
Qantas-related manufacturing job losses in Victoria: LTQ Engineering, where engines used in some Qantas aircraft are refurbished, to lose 164 engineering jobs in September. LTQ forecast to lose $37 million over next six years, made a loss of $18 million over last four. Due to reduced regional demand, tough international competition, and more reliable new-generation engines. [CR: Such a familiar story, off shore competition and inability to keep up with technology.]
Home values: RPData March 2012 Value Accumulation Report: Over 40% of Australian homes are worth at least twice what their owners paid for them, 5.4% are worth less than what their owners paid for them. [CR: I am unsure the value in such broad numbers, as it is so localised and dependent on how long the owner has had the home.]
Coles beats Woolies for 12th quarter: Sales for Westfarmers rose 4.7% ($2.25 billion) to $50.1 billion. Solid growth in Coles and Bunnings, flat sales at Kmart, 1.8% sales decline at Target. Coles outperformed Woolies for 12th consecutive quarter, posted 16th consecutive quarter of positive same store sales growth, lifting same store sales by 3%, total sales by 4.6%, sales at stores open for at least a year rose more than twice the rate of Woolies. Coles opened 8 new supermarkets in the year, Woolies opened 32. Bunnings same store sales increased 2.9% in June quarter (reinvestment in prices as part of its “range reset” dempended the impact of strong transaction growth). Officeworks sales dropped 1.1% in June quarter (technology and office furniture price slump).
Europe’s car industry over-capacity: Ford and Peugeot both on track to lose $US1 billion in Europe this year. Estimates say the European industry operates around 65% capacity, whereas 75% is needed to be profitable. Closing plants a challenge in Europe, which has more legal rights than in the US. Even after four years of catastrophic sales, only a few of Europe’s 100 or so car plants have shut down. Car sales rose slightly in Germany first six months of the year, dropped 14% in France, almost 20% in Italy, and in June fell over 40% in Portugal and Greece. [CR: At what point should a company do what needs to be done to manage its finances?]
Skype open to police, expanding its cooperation to law enforcement authorities to make online chats and other user information available to police. [CR: On the one hand, I share concerns over privacy, while frustrated at evil people using technology to hide.]
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