Sluggish demand for TV advertising and the success of Kerry
Stokes’s Seven Network last year have put the Ten Network and Publishing &
Broadcasting Ltd’s Nine Network in a weak position for the 2006 TV ratings
season, which starts in a fortnight, reports the Financial Review. Meanwhile, the Packer and Murdoch-backed pay-TV
group Foxtel has turned a bottom line profit for the first time in its often
tortuous ten-year history, says the paper’s Damon Kitney – the vaunted rollout
of its digital service having allowed it to trim losses much faster than
anticipated.

15 February – the date when BHP
Billiton is expected to deliver the largest interim profit in Australian
corporate history – looms as arguably the most important date in the reporting
season, says Robert
Guy in the Financial Review‘s
Due
Diligence. What with BHP Billiton serving as a pillar of
strength supporting the market’s 22% rally over the past 12 months, a
less-than-upbeat utterance from CEO Chip Goodyear could not only
knock the wind out of BHP’s share price but,
more importantly, seriously derail the market’s high-octane run of
record
closes.

Certainly, if Australia
has a genuine corporate icon BHP Billiton
is it, but it’s Rio that’s outperforming now, says
Malcolm Maiden in The Smage. And powerhouse commodity
prices and profits are masking the fact that compared with Rio Tinto, BHP
is a more complicated investment proposition in 2006. It’s not a pure miner.
It’s also a substantial oil and gas producer, and it is worth noting that Rio’s
shares began to outperform just after the oil price peaked above $US70 a barrel
at the end of August, when Hurricane Katrina belted the Gulf of
Mexico. Rio, on the other hand, has no oil.
And it has more exposure to one of the commodities most affected by China’s
boom: iron ore.

In other mining news, the $11 billion Gorgon gas project faces big delays after
warnings by its engineering advisers that placing the processing facilities on
Barrow Island may be too costly, reports Nigel Wilson in The Australian. Engineers are
looking again at whether gas from the Greater Gorgon reservoirs in the Indian
Ocean could be piped directly to the mainland – a solution previously
dismissed as being up to $800 million more expensive than the Barrow Island
option. The review is being undertaken amid concerns about higher costs,
including those of meeting stringent environmental standards for the
nature-protected Barrow Island.
Chevron and Shell, which own 75% of the project, have negotiated preliminary
sales agreements for 7.5 million tonnes of Gorgon liquefied natural gas output
for delivery from 2010.

Tourism’s importance to the economy is slipping, reports The Age‘s Josh Gordon,
as locals stay at home and traditional markets like Japan turn their backs
on Australia and head elsewhere. A new report from Tourism Australia
has found that one of Australia’s
biggest exports is under threat from fierce overseas competition, the high
Australian dollar and perceptions that Australia
is no longer an attractive destination.

Multiplex is set to enrage football fans and investors yet
again tomorrow when the embattled construction company releases an update on
its $1.8 billion reconstruction of London’s famed Wembley Stadium, reportsThe Sydney Morning Herald. As
pressure on Multiplex to complete the mecca for British football fans in time
for the FA Cup final on 13 May intensifies, analysts believe the company will
deliver more pain for shareholders desperate to see an end to the debacle.

And in international news, the US’s
most pivotal corporate fraud trial begins today in Houston,
where Ken Lay and Jeff Skilling, Enron’s two former chief executives, face
charges related to the 2001 bankruptcy of what was then the US’s
seventh-largest company. The fraud perpetrated by Enron was so far-reaching it
unleashed a backlash against corruption in corporate America,
leading to the Sarbanes Oxley Act, which tightened controls and accountability
in US corporate
life, reports the Financial Times. Yet the government’s campaign against corporate fraud is
riding on this trial. “I consider this to be the Super Bowl of corporate fraud
trials,” said Jacob Zamansky, a securities lawyer who has been following the
Enron trials. “In terms of a deterrent to future fraud, it is essential
that [the government] win.”

Peter Fray

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