Talking Business August 20 2021

The economic cost of lockdowns is expected to surge past $20 billion if Greater Sydney’s stay-at-home orders are extended beyond August,


Welcome to Talking Business, a podcast produced in Melbourne Australia. The podcast is available on the Acast app, the Apple Podcast store or wherever you go to get your podcasts. Or you can get it at the Business Acumen website at

I am Leon Gettler. My job is to review and monitor      the week’s news in business, finance and economics. I bring it all to you, every week.

This is episode number 29 in our series for 2021 and today’s date is Friday August 20.

First, I’ll  be talking to Tommy Huppert, the CEO of medical marijuana company Cannaterek. And I’ll be talking to AMP Capital chief economist Shane Oliver about the profit reporting season and the state of the economy.

But now, let’s talk to Tommy Huppert.


The economic cost of lockdowns is expected to surge past $20 billion if Greater Sydney’s stay-at-home orders are extended beyond August, further deepening the September-quarter economic contraction. Economists are again questioning whether the Reserve Bank’s decision to push ahead with scaling back its weekly bond-buying program from September is sustainable. AMP Capital chief economist Shane Oliver said lockdown restrictions imposed since May were already expected to cost about $17 billion, and ending restrictions in Sydney in August was “looking unlikely”. AMP’s economic activity tracker last week dipped to its lowest level since the first national lockdown. Extended lockdowns of Sydney and Melbourne, as well as fresh stay-at-home orders in parts of Queensland, ACT and regional NSW are expected to further weigh on activity.


The Reserve Bank has declared it is ready to step in and do more to support the economy should the Delta crisis worsen and lead to a “more significant setback” for the recovery, minutes from the bank’s most recent meeting have revealed.  The commitment came despite the central bank acknowledging that fiscal support via the Commonwealth and state governments was the “more appropriate” tool to help businesses and workers stay afloat through lockdowns which are now in place in New South Wales, Victoria, the ACT and parts of the Northern Territory. Nonetheless, minutes from the RBA’s August 3 board meeting, , showed “the board would be prepared to act in response to further bad news on the health front should that lead to a more significant setback for the economic recovery”.


Qantas will make COVID-19 vaccinations mandatory for all staff from at least mid-November after a survey showed three quarters of staff backed the move, in a major step for one of Australia’s largest employers.  Frontline staff like cabin crew, pilots and airport workers will need to have gotten the jab by November 15, and the remainder of the airlines 20,000 employees will need it by the end of March 2022. Qantas said it would consider medical exemptions.




Television networks have seen advertising revenues soar during the pandemic as Australians spend much more time at home watching screens. Australians have turned to TV through all the twists and turns of this horrible health crisis; whether to watch trusted, timely news or, when it all gets a bit overwhelming, for light relief, entertainment or to cheer on their favourite sports teams. New figures released by ThinkTV, which compiles research into marketing and technology, revealed the streaming arm of TV networks’ BVOD (Broadcaster-Video-On-Demand) services (excluding SBS) also significantly increased, climbing by 63.4% to $278m in the same period. These included record-breaking performances by both free-to-air and subscription services’ BVOD platforms including 7 plus, 9 Now, 10 Play, Foxtel Go, Foxtel Now and Kayo. In the six months to June, TV advertising revenues rose to $1.9bn – an increase of 27.2% when compared to the same period in 2020. Free-to-air metropolitan advertising revenue rose in the 12-month period by 11.5% to $2.6 billion, while for regional free-to-air services revenue climbed by 4.9% to $640 million. The radio industry has also seen advertising revenue soar – latest figures from Commercial Radio Australia showed revenue in July was up 19.3% compared to July last year. Advertising revenue in the five major capital cities – Sydney, Melbourne, Brisbane, Adelaide and Perth – totalled $48.5m in July compared to $40.7m in July 2020.

The seasonally adjusted Wage Price Index (WPI) rose 0.4% in June quarter 2021, with the annual growth rate at 1.7%, according to figures released today by the Australian Bureau of Statistics.


Sydney Airport has rejected a revised takeover bid from a consortium of superannuation fund investors worth about $23 billion. The airport advised the ASX on Monday it received a revised indicative, conditional and non-binding proposal from the Sydney Aviation Alliance. Sydney Airport said it’s prepared to hold discussions with suitors over the  takeover offer The airport said Monday it’s “open to engaging” with the bidders, led by IFM Investors, if they make an offer that reflects “long-term value.” Sydney Airport’s rejected suitors are relying on the company’s investors, including UniSuper, to pressure it into talks after a second takeover approach worth $22.8 billion from a consortium led by IFM Investors and Global Infrastructure Partners was knocked back. UniSuper would keep its equity stake in Sydney Airport if the consortium’s takeover proposal succeeds as part of conditions for a scheme of arrangement outlined by the bidders. Jamie Hannah, deputy head of investments and capital markets at VanEck, said that while the revised offer of $8.45 per share was still too low, the consortium – which now also includes AustralianSuper – should be given access to the airport’s books.

The competition watchdog’s novel criminal case against the CFMEU over alleged cartel conduct has collapsed following questions about witnesses’ memories and documents withheld from the union. Commonwealth prosecutors, during a committal hearing on Tuesday, withdrew criminal charges against Construction, Forestry, Maritime, Mining and Energy Union ACT secretary Jason O’Mara that alleged he had engaged in price-fixing in the steelfixing and scaffolding industries in 2012-13. The case, which could have resulted in up to 10 years jail, was one of the first times that competition laws had applied to negotiations in industrial relations and was expected to mark a precedent for further cases. Australian Competition and Consumer Commission chairman Rod Sims said prosecutors’ decision to withdraw was “made in the context of the extended period of time which has elapsed since the alleged conduct occurred, and the challenges that posed for witnesses’ memories of relevant events”. However, CFMEU national secretary Dave Noonan blasted the agency and said the failed case “raises serious questions about the ACCC’s behaviour in the matter”. The cartel case was in response to the 2015 Heydon Royal Commission and claims that the CFMEU ACT had organised meetings with contractors over concerns they were winning jobs at “ridiculously low prices”. Officials allegedly told scaffolding companies they needed to bring their prices up to meet the cost of the CFMEU’s 2013 enterprise agreement and told them the union had done the same thing for steel fixer companies. The CFMEU denied claims of price-fixing and said the conduct was part of normal pattern bargaining for workers’ pay and conditions.



. BHP says it will be better placed to invest in a lower carbon world after announcing its dual-listing structure will be unified in Australia and its capital-heavy petroleum division hived off to Woodside Petroleum. BHP chief Mike Henry said a desire to play a bigger role in the global “mega-trends” around decarbonisation and food security were behind the decision to merge its petroleum division with Woodside, unify its dual-listed structure and spend $US5.7 billion ($7.8 billion) on a new potash mine in Canada. BHP has been two companies operating with the appearance of a single entity since the 2001 merger of Australia’s BHP and London-listed Billiton. Unification of that structure has long been anticipated and will be executed through a mechanism where the Australian-listed half of BHP acquires the London-listed half. BHP said its shares would still trade in London and South Africa in future, but the company might lose its place in London’s FTSE100 index. Mr Henry said the simplification offered by unification would make it easier to operate amid the challenges of the pandemic and would also make potential acquisitions easier to execute. Exiting the petroleum business will rapidly accelerate the decarbonisation of BHP’s portfolio, given it has also spent the past year trying to sell its thermal coal mines and its lower-quality coking coal mines.

Telstra is rewarding staff with the equivalent of $200 if they have both doses of Covid-19 vaccine. It is offering staff 200 Telstra “Appreciate points” which is Telstra’s internal staff rewards program. The offer is equivalent to $200.  Staff can log into Telstra’s online “Appreciate Store” and convert their points to Woolworths and Coles vouchers, vouchers for buying goods at a range of Australian retail stores, and ‘experiences’. They can also pay Telstra bills. The scheme will be applied retrospectively so that those who already have had the two jabs won’t miss out. The scheme will begin with Australian employees, and will be open until at least December 31. Getting the jab at Telstra is voluntary for now.


And the profit reporting season continues. Domino’s Pizza Enterprises delivered a 29% increase in net profit to $188.2 million for the 12 months ending June. Coles revenue rose $38.9 billion while EBIT firmed 6.3% to $1.87 billion and profit advanced 2.8% to $1 billion. CSL reported a 13% increase in revenue to $US10.3 billion while net profit firmed 13% to $US2.375 billion. BHP reported an 88% increase in attributable profit, to $US17 billion. Woodside reported a 31% increase in revenue to $2.5 billion while net profit rose to $317 million, rebounding from a $4.1 billion loss a year earlier. Tabcorp reported statutory net profit after tax of $269 million following an $870 million loss last financial year. Packaging giant Amcor has hiked its full-year profit 53% to $US939 million on sales of $US12.68 billion. Bendigo and Adelaide Bank has delivered a 51.5% surge in cash profit to $457.2 million. JB Hi-Fi’s net profit soared 67.4% to $506.1 million in the 12 months ending June as consumers switched from setting up their home offices to keeping themselves entertained at home during lockdowns.’s revenue from continuing operations rose 8.4% to $427.2 million while its net profit climbed 14% to $130.7 million. Global mining tech company IMDEX revenue rose 11.2% to $264 million during the financial year while EBITDA climbed 38.8% to $75.5 million. Net profit after tax rose 45.5% to $31.7 million. Bluescope Steel booked a $US1.19bn after-tax profit for the financial year, on underlying earnings of $US1.72bn and revenue of $12.87bn, its best financial result since breaking away from BHP in 2002. GPT Group’s total revenue rose 179.6% to $989.1 million while net profit soared 246.1% to $760.5 million. GWA Group’s total revenue from ordinary activities rose 1.8% to $405.7 million while total EBIT slid 16.1% to $59 million and total net profit dipped 20.1%  to $35.1 million. Oil producer Beach Energy has reported a full year net profit down 37% to $316.5 million on revenue down 10% to $1.56 billion. Backing out a $117 million non-cash impairment from the statutory profit it’s underlying profit finished down 21% to $363 million. Lendlease reported statutory profit after tax of $222 million for the period, following a $310 million loss in the 2020 financial year. Core operating profit after tax increased 83% to $377 million. Seven West Media reported financial 2021 net profit of $318.1 million from a loss of $201.2 million on a statutory basis, and underlying net profit of $125.5 million up 240% from $36.9 million. Steadfast Group’s revenue rose 11% to $751.1 million while EBITA climbed 18% to $262.7 million. Net profit rose 359% to $143 million. Four wheeled drive accessories group ARB grew profits on an after tax basis 97% to $112.9 million for the year until June 30 on the back of bumper demand for its products. Venture capital group Bailador swung to a full-year net profit of $28 million, versus a loss of $4 million in the prior year. Charter Hall Retail REIT reported statutory profit of $291.2 million, up from $44.2 million in the previous financial year, while operating earnings increased 9.5% to $156.2 million. The Dexus Diversified Trust grew net profits after tax attributable to security holders by 17% to $1.1 billion in the year until June 30. Domain Holdings revenue rose 10.7% to $289.6 million while EBITDA firmed 21.1% to $100.6 million and net profit climbed 66.4% to $32.9 million. Santos revenue rose 22% to $US2.04 billion during the first half while profit was $US354 million, recovering from a $US289 million loss a year ago. Global kitchen appliance maker Breville Group reported a 42.3% rise in full-year net profit to $91.0 million, boosted by strong demand for coffee makers and mixers from people spending more time at home. Magellan’s net profit declined 33% to $265.2 million on a statutory basis, and fell 6% to $412.7 million on an adjusted basis, reflecting the direct investments made via Magellan Capital Partners and Magellan’s own growth strategies and new products. Global metals and electronics recycler Sims reported a profit of $229.3 million – compared to a loss of $265.3 million loss a year ago – as revenue rose 20.5% to $5.92 billion. Gold miner Silver Lake Resources revenue rose 5% to $598.3 million while EBITDA firmed 12% to $290.8 million and profit after tax fell 62% to $98.2 million. Pharmaceutical wholesaler EBOS Group’s revenue for the period was up 5% to $9 billion, while statutory (audited) net profit after tax climbed 14% to $185.3 million. Spark New Zealand’s revenue slid 0.8% to $NZ3.59 billion while net profit dipped 8.6% to $NZ384 million. Auckland-based Fletcher Building has swung to a net profit of $NZ305 million, versus a loss of $NZ196 million in the prior corresponding period. Nearmap revenue rose 17% to $113.4 million while net profit dipped 49% to $18.8 million. Super Retail Group has nearly tripled its full-year net profit to $110.2 million on sales up 22.2% to $3.45 billion. Domino’s Pizza grew underlying earnings before interest and tax 27% to $293 million in the financial year to the end of June. Deterra Royalties has reported revenue of $145.2 million for the 2021 financial year with net profit after tax of $94.3 million. Emeco Holdings’ revenue rose 14.8% to $620.5 million while net profit slid 68.7% to $20.7 million. It reported operating EBITDA of $238 million and operating EBIT of $119 million. Copper and gold miner OZ Minerals has hiked its net profit 236.6% to $268.6 million on sales up 71.3% to $986.1 million for the six months to June 30, 2021. Abacus Property saw group statutory profit soar 336% in the 2021 financial year to $369.4 million, while funds from operations (FFO) jumped 9.5% to $136.4 million. Southern Cross Media revenue fell 2.2% to $529.1 million and EBITDA rose 16.4% to $125.9 million. Auto parts supplier Bapcor has posted a record net profit up 50% to $118.8 million on sales up 20.4% to $1.7 billion for financial 2021. APN Industria’s revenue rose 8.9% to $67.4 million while profit soared 117.4 million to $119.3 million. Real estate and retail asset manager Vicinity Centres has narrowed its full-year net loss to $258 million on revenue down 3.7%  to $1.17 billion. Corporate Travel’s revenue tumbled 45% to $174 million and it reported a net loss of $55.4 million. A year ago, it reported a loss of $8.2 million. Residential property development group Ingenia has lifted its net profit 131% to $72.7 million on sales up 21% to $295.6 million for financial 2021. Aventus Group funds from operation (FFO) per security growth.was up 9.6% for the period to $110 million. Peter Warren Automotive Holdings’ sales volumes and gross profit exceeded expectations, the company said, and pro forma net profit before tax was $75.7 million for the 2021 Pacific Smiles reported an increase of 27% in revenue to $153.2 million for FY21 and underlying net profit after tax of $14 million, up 72.8%. EBITDA rose 40.8% to $33.1 million. MA Financial Group, which used to be called Moelis Australia, reported 60.3% growth in net profit to $14.3 million for the first half. Retailer McPherson’s has reported a full-year loss of $3.3 million, impacted by a $6.7 million impairment for unsaleable hand sanitiser.



And that’s it for this week. And next week, I’ll be talking to Alicia Kennedy, managing director of Naked Wines. And I’ll be talking to Indeed economist Callam Pickering about the latest jobs figures.

In the meantime you can catch me on Facebook, Twitter and LinkedIn. And if you want leave a comment. Wishing you all a safe and healthy week. And looking forward to bringing you Talking Business next week