Australian company gross operating profits fall 2.0 % in Q1

13:11, May 30, 2011      

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Gross operating profits at Australian companies fell 2.0 percent in the March quarter, official figures showed on Monday.

Company gross operating profits in current prices and seasonally adjusted terms rose 9.5 percent over the year, the Australian Bureau of Statistics (ABS) said.

Estimated business inventories rose 0.4 percent in the March quarter after rising 0.8 percent in the December quarter.

Economists were expecting inventories to have risen by 0.1 percent in the March quarter.

The estimate of income from sales by manufacturers in the March quarter was down 0.7 percent, the ABS said.

Estimated income from sales by wholesalers in the March quarter was up 1.3 percent.

Australian economists said on Monday that the figures were broadly in line with market expectations as flooding in Australia' s Queensland and Victoria over the summer dragged down company profits in the March quarter.

"In terms of company profits, the fall came despite rising commodity prices and that was because sales volumes were actually quite weak across the board," Australia's largest investment bank Macquarie Group senior economist Benjamin Dinte said.

"Obviously the impact of the floods has affected the numbers and affected sales growth in the quarter, across a range of sectors."

Dinte said the fact that inventories didn't increase by as much as they did in the previous quarter suggests that inventories would be a drag on growth.

Global financial services firm JP Morgan economist Ben Jarman said Monday's business indicators figures should not change economists' forecast for the GDP numbers.

"This is a number that is expected to be soft for quite a while now," he said.

"The last few quarters we have been seeing declines in mining profits."

Source: Xinhua
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