Australian business profits dropped in the three months through December, the fifth quarterly decline, as earnings weakened at mining, manufacturing and construction companies.
Gross operating profits dropped 1 percent from the third quarter, when they fell a revised 2.7 percent, the Bureau of Statistics said in Sydney today. The result matches the median forecast of a Bloomberg survey of 17 economists. Inventories rose 0.2 percent. Economists had forecast a 0.6 percent gain.
Reserve Bank of Australia Governor Glenn Stevens will keep the benchmark interest rate unchanged at a half-century low of 3 percent tomorrow, according to 27 of 29 economists surveyed by Bloomberg News. A high currency has hurt earnings for industries like manufacturing, while an easing of commodity prices lowered the gains from exports and the nation’s terms of trade.
From a year earlier, profits declined 7.6 percent, today’s report showed.
Profits at mining companies fell 3.7 percent from the prior three months, manufacturers declined 6.3 percent, and construction slid 1.9 percent. Profit at retailers climbed 5.1 percent from the previous quarter.
Gross operating profit measures earnings before tax, interest, depreciation and amortization. It excludes asset sales and foreign-exchange gains or losses.
BHP Billiton Ltd., the world’s biggest mining company, last month reported a 58 percent decline in first-half profit, joining rival Rio Tinto Group in posting a drop in earnings as waning global growth last year prompted lower prices and some miners to slow expansion.
Coca-Cola Amatil Ltd., Australia’s largest soft-drink bottler, posted full-year profit that missed analyst estimates after taking A$146 million of writedowns on its packaged food business. Net income fell 22 percent to A$460 million in 2012, the Sydney-based Coke bottler said in a Feb. 19 statement.
Australia’s currency has remained above parity with the U.S. dollar for eight months, the longest stretch since it was freely floated in 1983, propelled by a mining boom and central bank asset purchases in major developed nations. The central bank has cut interest rates by 1.75 percentage points in the 14 months through December to 3 percent, matching a half-century low reached during the 2009 global recession. It left borrowing costs unchanged last month.
Australia’s economy probably grew 0.6 percent in the fourth quarter from the prior three months, and 3 percent from the year earlier period, a separate Bloomberg News survey showed before a March 6 government report.