Sydney, Aug 24, 2007 (ABN Newswire) -
Australia's top car and home insurer Insurance Australia Group has announced a fall of 27 per cent in full year profit. The slide has been attributed to recent storm losses and also a drop in investment returns. A year ago, IAG reported net profit of $759 million. Analysts had flagged estimated profit of around $627 million for last financial year but IAG came in at $552 million, well below expectations. Tough competition in local markets saw IAG expand into Europe last year with acquisitions including Britain's fifth-largest car insurance broker, Hastings Insurance Services Ltd and car insurer Advantage Insurance. None of this could stop a 10 percent retreat in IAG shares for 2007 compared with an 8.4 percent rise in the S&P/ASX200 Index. IAG has seen a sharp increase in profit results in the last three years.
Another company that has seen an 8.5 percent drop in its shares despite the overall rise in the broader market is Billabong. The clothing retailer has posted a 15 percent rise in full year earnings as it continues pursuing an aggressive expansion in the U.S. and Europe. Net profit rose to just over $167 million from nearly $148 million a year earlier. The result came in just under Reuters estimates of $169 million. The share price has been hurt by strength in the Australian dollar, which cuts the translation of foreign earnings into local currency. Billabong has a strong record in the earnings department having increased profit results steadily over the last four years.
And Australia's largest independent oil and gas producer Woodside Petroleum has signed a multi-billion dollar deal to export liquefied natural gas (or LNG) to Japanese companies. The LNG will be supplied from Woodside's Pluto project off Australia to Japanese firms Tokyo Gas and Kansai Electric Power with the two Japanese firms also taking 5 percent equity stakes in Pluto. Woodside continues to enjoy strong earnings as a result of the resources boom
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