Good morning

News yesterday of the Greek bailout scheme was enough to get our market rocking and rolling….but underneath this knee jerk action was a string of good corporate profits especially from Mining services companies like MND,MAH,BLY and EDI…this is the real world..the Greek deal is another attempt to kick the can down the road..the austerity measures will kill the country and the growth that these bailouts are based on are like neverland…the Greek economy will never be able to become competitive whilst the country remains in the Euro…In Australia we have a similar situation with our currency…the strong Aussie dollar is based on the growth in the West and it is crippling the business prospects in the East…so swap West and East for North and South and this gives you a clue to where the East Coast economy is going..

I am still bemused by our RBA and enigmatic statements from Glen and the boys..they have a mandate as the RBA to focus on three things..I know I saw it in the brochure.

1.GDP Growth

2.Unemployment Rate

3.Inflation targets

Not the Greek debt crisis Glen!!Getting the Aussie dollar back below 1.00 should be a goal too..otherwise there will just be a hole in the ground in WA and everyone peering in and asking where did the economy go!

Expect our market to lose some of yesterdays enthusiasm but dips will  be buying opportunities as Greece recedes. The Dow pushing through 13,000 was greeted with a cheer albeit briefly before falling..

Results yesterday from the Mining services sector highlight the boom. There’s money in selling shovels to the miners..Cecil Rhodes knew what he was doing!

Good article on CPB in the Herald today..Market Cap of nearly $4bn!!

Boart Longyear (BLY)

Boart Longyear’s fiscal 2011 NPAT rose 89% to US$160m, and EBITDA rose 60% to US$356m vs US$330 million guidance. More significantly, fiscal 2012 guidance of US$2.2 billion revenue and US$460 million EBITDA was 9% above the market consensus of US$422 million.

Downer EDI (DOW)

Downer EDI swung to a first-half profit as Australia’s continuing mining boom helped boost the engineering company’s revenue and it didn’t reveal any more write-downs related to a troubled train-building contract. A net profit for the six months to December 31 of $84.9m compared to a $103.8m net loss a year earlier that included a $250m provision for the Waratah train contract. The $84.9m profit is 19% higher than an underlying figure last year of $71.2m and is a little higher than forecasts this week of $80.7m. As expected, Downer EDI stuck to its full year guidance for a net profit of around $180m and an earnings before interest and tax of around $340m. First-half EBIT was $160.4m. The government of New South Wales state recently agreed to step in and restructure the troubled Waratah project’s debt, removing some of the uncertainty surrounding the contract to build 78 passenger trains for Sydney’s suburban rail network. Downer’s revenue from ordinary activities rose 13.3% to $3.71bn.

Monadelphous (MND)

Monadelphous Group reported a 26.3% rise in first-half net profit, and said a tight market for skilled labour will remain as several multibillion dollar resources projects start construction in Australia. Monadelphous said its net profit for the six months to December 31 rose to a record $57.5m from $45.5m, and it declared a 25% higher interim dividend of $0.50 per share. “With a historically high level of large-scale resources and energy projects currently in the execution phase throughout Australia and a healthy pipeline of projects in planning stages–particularly for iron ore, coal and LNG developments–Monadelphous expects the strong revenue momentum achieved in the first half will continue for the remainder of the financial year,” the company said in a statement. Monadelphous, which recently secured a contract worth around $290m from BHP Billiton for construction at its Port Hedland inner harbour project in Western Australia state, said it expects full-year revenue growth to be similar to the 25.6% growth achieved in the first half.

Research on some mining Service companies available…worth a read..none are cheap but then nor is a Mercedes!

Clarence

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