Black coal in the red. Peabody Energy Corp, a big US and Aussie coal miner, is slashing 300 jobs at its Aussie coal mines and cutting production by around 3 million tonnes a year of coking (metallurgical) coal, which is used in the steel industry in markets such as Japan, China and South Korea. The production cuts follow the announcement earlier this year by Glencore that it was cutting around 15 million tonnes of Australian coal production (and more than 100 jobs) because of weak prices for thermal (steaming) and lower quality metallurgical coal. Peabody’s cuts were announced in its June quarter report, released in the US overnight. Peabody gets more than a third of its total revenue from its Australian mining operations. It also cut 250 jobs in its US operations, and head office. The move by the company is its most dramatic response so far to the downturn in demand for coal and the slide in global prices. And remember Tony Abbott says coal is “good for humanity’’. At this rate it will be cheap enough to eat! — Glenn Dyer
Power steering. Car classifieds website Carsales has triumphed in its legal battle against News Corp-owned rival CarsGuide. The Victorian Supreme Court yesterday ruled that CarsGuide’s recent advertising campaign, which made a number of allegations about Carsales’ business practices, was misleading and likely to deceive consumers.
Carsales initiated legal action earlier this year, arguing its rival made “grossly misleading” representations in a series of television and radio advertisements. In particular, the website took issue with the allegation it sold its customers’ contact details to car dealers without their knowledge. Carsales chief executive Greg Roebuck said in a statement he welcomed the court’s decision.
“We saw the carsguide.com.au campaign as trying to damage the relationship of trust that Carsales has established with consumers over many years,” Roebuck said. “We see this decision as a win for both us and the consumer, who will now not be subjected to these misleading advertisements.”
Roebuck also tried to hose down concerns the legal battle was an example of a bigger business taking on a smaller one.
“Carsguide.com.au has tried to paint itself as David in a battle with Goliath, when this is simply not the case,” he said. “Carsguide.com.au is owned by News Corp Australia and some of the largest car dealerships in Australia. We are pleased with this outcome and expect that it will lead carsguide.com.au to take a different and more reasonable and balanced approach to its advertising campaigns in the future.” — Broede Carmody (read the rest at SmartCompany)
Big oil, big loss. As expected, BP reported a whopping June quarter loss, but it was much larger than expected. Thanks to the settlement of its Gulf of Mexico drilling disaster in 2010, the plunge in prices and several other write-downs, the company’s bottom line loss was US$6.27 billion, compared with a profit of US$3.18 billion in the same quarter of 2014. The result included a US$9.8 billion pre-tax charge as part of that US$18.7 billion settlement of the Deepwater Horizon disaster. Excluding one-off items, BP’s underlying net profit fell by nearly 50% in the second quarter of 2015 to US$510 million from US$1 billion a year earlier, thanks mostly to the plunge in oil prices in the quarter from a year ago. The fall would have been more had world oil prices not risen sharply in the quarter (they have since fallen back sharply). The fall in earnings mostly came from lower prices for oil and gas produced. But it was a different story for the company’s so-called “downstream” or its refining, retail and distribution operations. Pretax earnings in that part of the business jumped by just on 75% in the second quarter to US$1.6 billion compared with US$933 million a year earlier. And you can bet that was also the experience in Australia and a situation enjoyed by other oil companies (in fact Caltex Australia had the same solid June half improvement in its marketing profits). — Glenn Dyer
VeeDub rules. Volkswagen has overtaken (nice touch?) Toyota for the title as the world’s biggest carmaker (by volume). Figures released overnight show that the German giant grabbed the lead as the Japanese giant struggled with the fallout of the Takata airbag debacle. Volkswagen said it sold 5.04 million units around the world of its various marques (VW, Audi, Skoda, Seat, etc), while Toyota managed to sell 5.02 million units (Toyota, Lexus, etc). General Motors was third, with 4.86 million units.Toyota broke GM’s decades-long reign as the world’s top carmaker in 2008 but lost the lead as Japan’s 2011 earthquake-tsunami disaster hammered production and disrupted global car sales (even in Australia). Volkswagen (as well as GM) are doing very well in emerging economies such as China (but that market is slowing dramatically at the moment). Toyota remains No 1. in Australia, GM (Holden) is third and Volkswagen is eighth (in the June half year). — Glenn Dyer