BHP Billiton Limited (ASX: BHP) impairs US gas assets
Mining giant, BHP Billiton, announced a US$2 billion impairment of its US gas assets on Wednesday. The Hawkville field is responsible for the majority of the write down and the company insists the remaining US assets are of high quality with a value of US$24 billion. At an oil price of US$60 per barrel (West Texas Intermediate) and a gas price of US$3.00 per Mscf (Henry Hub), BHP expects the US gas business to be free cash flow positive in 2016, but are those assumptions too optimistic?
Primary Health Care Limited (ASX: PRY) downgrades 2015 profit guidance
Medical centre company Primary Health Care announced a downgrade to its profit guidance on Wednesday and says it has struck a deal with the ATO to settle the tax liabilities of its doctors, incurred when selling their practices to Primary. Under the deal, the liabilities will be offset against Primary's tax refund for the purchases, reducing the refund to $50 million from $155 million.
The profit downgrade is due to weak patient volumes in the final quarter of 2015 driven by extreme weather and a mild cold and flu season as well as asset impairments and other charges of $30 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) are expected to be $400 million in 2015 down from the previous guidance of $410 million to $425 million.
AP Eagers Ltd (ASX: APE) expects record profit for first half of 2015
On Thursday, Automotive retailer AP Eagers stated that profit for the half year to 30 June 2015 will be a record for the company, increasing 29% on the prior year from $46.0 million to $59.5 million. The stock has risen 66% in the last year and the company continues to enjoy a favourable business environment.
Select Harvests Limited (ASX: SHV) benefits from higher prices and crop volumes
Paul Thompson, the managing director of almond producer Select Harvests, said on Tuesday that crop volumes in 2015 are likely to be 14,500 tonnes up from the previous estimate of 13,400 tonnes. Furthermore, thanks to mix, quality, and currency movements he expects average prices to be $11.45 per kilo up from $11.00 previously.
Global demand for almonds is surging whilst supply remains constrained. US forward domestic commitments are up 15% on June 2014, Chinese demand is up 62% year on year for June and demand in India is up 25% year to date. Meanwhile drought conditions prevail in the US, a major global almond producer, with the 2015 crop expected to be similar to 2014.
Stories from the smaller end of the market
Mining services companies Bradken Limited (ASX: BKN) and Sedgman Limited (ASX: SDM) both released positive news in the context of difficult industry conditions. Bradken reiterated guidance of EBITDA between $136 and $138 million on Wednesday, whilst Sedgman advised net profit after tax of $16 million to $17 million on Tuesday compared to a $7.7 million loss last year.
Medical device company Somnomed Limited (ASX: SOM), said on Wednesday that in the final quarter of the 2015 financial year it had broken sales records in North America, Europe and Asia Pacific recording 21.2% year on year growth. The company also generated positive operating cash flow in the quarter, but was cash flow negative after investment activities.
Data security firm Senetas Corporation Limited (ASX: SEN), said on Thursday that it expects profit before tax of between $5.7 million and $6 million this year, up from $2.5 million last year.
