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Briefcase: Business snippets from around SA

Business

In this week’s briefcase, Greater Adelaide’s jobless rate hits 5 per cent, switchroom manufacturer Mayfield Group Holdings lands a $10 million contract and Santos reports record sales figures for the June quarter.

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Jobless divide  widens across South Australia

Four of the state’s seven statistical area have recorded unemployment rates for June under five per cent while the jobless rate north of the city remains stubbornly high.

Southern Adelaide is the latest region to dip below the 5 per cent unemployment mark, according to the release of the latest regional jobs data by the Australian Bureau of Statistics.

The data released on Thursday shows the southern suburbs had a jobless rate of 4.5 per cent in June, down from 5.8 per cent in May.

The region joined the South East region of the state, the western suburbs of Adelaide and the Central and Hills regions, which takes in the eastern suburbs, below the five per cent threshold.

The eastern suburbs recorded an unemployment rate of just 3 per cent in June, down from 4.8 per cent in May, its lowest jobless result since 2012.

It was followed by the South East (3.5 per cent, down from 4.8 per cent in May) and the western suburbs (4.9 per cent, up from 4.5 per cent in May).

Statewide figures for June were released a week early on July 15 with South Australia’s unemployment rate falling to 5.3 per cent – its lowest level since 2012 – but is still the highest rate in the country.

Unemployment remains stubbornly high in the three regions north of Adelaide.

The Barossa, Yorke Peninsula. Mid North region recorded an unemployment rate of 8.1 per cent, a slight improvement on May’s 8.6 per cent.

The jobless rate in the Outback regions, which takes in the state’s Far North and Eyre Peninsula, had a jobless rate of 7.5 per cent in June, up from 6.2 per cent in May and the northern suburbs of Adelaide recorded a rate of 7 per cent in June, up from 6.7 per cent in May.

The SA rate is 0.5 per cent lower than in May and is the lowest since the 5.3 per cent recorded in November 2012.

The state’s youth unemployment rate fell below the national rate to 9.4 per cent, its lowest level since July 2011.

Job losses due to the latest coronavirus are not likely to be reflected in the unemployment stats until July’s unemployment stats are released on August 19.

Switchroom manufacturer strikes gold in Kalgoorlie

Electrical manufacturing business Mayfield Group Holdings has secured a $10 million contract to supply transportable switchrooms to Lynas for its rare earth project near Kalgoorlie in Western Australia.

Headquartered in Edinburgh north of Adelaide, Mayfield also has offices and manufacturing facilities in Perth, Brisbane, Sydney and Melbourne and has some 200 staff.

The total contract value is $10.3 million and includes the supply of a high voltage switchroom, seven low voltage switchrooms and 13 motor control centres, as well as a range of ancillary panels.

The equipment is expected to be delivered to Lynas in March 2022 and will involve Mayfield’s Adelaide and Perth facilities in the design and manufacture.

The company was founded in Adelaide in 1936 as FR Mayfield and provides a suite of electrical products and services for renewables, transmission and industrial infrastructure for a number of sectors including oil and gas, mining and defence.

It listed on the Australian Securities Exchange in November and has a market cap of $35 million.

The Mayfield group consists of four subsidiaries and an associated entity: Mayfield Industries; STE Solutions; Power Parameters, Walker Control; and a 40 per cent stake in ATI Australia.

The group designs, fabricates, installs, assembles and commissions its electrical infrastructure around Australia and has consistently achieved annual revenues of around $60 million in the past couple of years.

Rising gas, oil prices are good news for Santos

Improved commodity prices have helped Santos deliver record quarterly sales revenue of $1.49 billion (US$1.1 billion) and record first-half sales revenue of over $2.72 billion (US$2 billion).

The company’s second quarter 2021 report was released to the ASX on Thursday and showed a quarterly production of 22.5 million barrels of oil equivalent (mmboe) was 9 per cent lower than the first quarter.

It said this was primarily due to the completion of the 25 per cent sell down in Bayu-Undan and Darwin LNG to SK E&S on April 30. But this was partially offset by stronger gas production in Western Australia and Queensland.

First half production of 47.3 mmboe was 23 per cent above the corresponding period and sees 2021 guidance narrowed to the upper part of the range.

However, second quarter sales revenues were a record, reflecting improved commodity prices.

Santos Managing Director and Chief Executive Officer Kevin Gallagher said the company had delivered another strong quarter of production, sales volumes and revenues, as it benefited from stronger demand and higher prices.

“Our disciplined, low-cost operating model continues to drive strong performance with US$572 million of free cash flow generated in the first half, and the business remains on track to deliver a free cash flow breakeven oil price of US$25 per barrel this year,” he said.

“At current oil prices, Santos should generate over US$1.1 billion in free cash flow in 2021.”

The state’s largest listed company on March 30 announced it had reached a final investment decision on its $4.7 billion Barossa project northwest of Darwin, which it says represents the biggest investment in Australia’s oil and gas sector since 2012.

“Consistent with our 2021 strategic priorities, after taking the FID on Barossa in March, we completed the sell-downs in Bayu-Undan and Darwin LNG, and have now commenced all key workstreams on Barossa as well as entering FEED for the Dorado project,” Gallagher said.

“As I have always said, we will remain disciplined and cost-focused during this next phase of growth. Despite cost challenges across the industry, I am pleased that our continued focus on costs sees a lowering of our upstream production cost guidance.”

Santos will release its results for the half-year ended 30 June 2021 on Tuesday 17 August 2021.

Farm values a boost for Duxton

Listed agriculture company Duxton Broadacre Farms has increased its asset value by more than 11 per cent to $107.95 million, according to the company’s latest independent valuation.

Conducted by LAWD, the report shows the land, water, and structures owned by the Company June 30, 2021 increased in value in the financial year from $96.85 million on July 1, 2020.

The South Australia company owns eight farms in the central-west region of New South Wales.

It has recently purchased two more farms, West Plains and Lenborough, in the Forbes region, which settled last month.

The Stirling-based business sold its only SA farm in December last year for $22 million, 37.5 per cent above its indicated valuation.

The 1980-hectare Boorala property northeast of Naracoorte was home to 3000 ewes and 70 rams and also produced wheat, barley, canola and broad beans.

In a statement to the ASX last week, the company said the latest valuation report was particularly pleasing as it showed 16.1 per cent year-on-year growth for the properties owned by the company across both periods.

“Since its debut on the ASX in February 2018, DBF has endured three challenging drought years, with the Australian Bureau of Meteorology having labelled the period from January 2017 to December 2019 the driest 36-month period for the Murray-Darlin Basin since records began in 1900,” the company released in the statement.

“Although prevailing conditions have prevented DBF from achieving operational profitability in previous years, 2021 marks the fourth consecutive year of growth in the value of the Company’s property assets.”

Vintage Ale comes of age

Regency Park-based Coopers Brewery will launch the 21st edition of its Vintage Ale this month.

The limited-edition seasonal beer and in keeping with the heritage of the Vintage Ale, this year’s release is characterised by its hop selection.

The 2021 Vintage features the popular Cashmere, an American dual-purpose hop featuring citrus, fruity and floral notes.

The palate is enhanced by the addition of Ekuanot, a finishing hop with fruity aromas, and Eclipse, an Australian variety delivering citrus and pine flavours.

Coopers Managing Director and Chief Brewer, Dr Tim Cooper, said the 2021 Vintage Ale continued the Coopers tradition of developing premium quality, limited-edition beers that resonate with beer drinkers.

“Coopers Vintage Ale is eagerly awaited each year and we expect this 21st release to be no different,” Dr Cooper said.

“We’ve chosen a unique combination of hops in its creation and the result is a rich, balanced and full-bodied ale with floral and spice characters, along with tones of citrus and stone fruit.

“The 2021 Vintage Ale drinks well immediately, and if stored under cellar conditions, will become more complex over time as its flavours evolve and develop.”

A limited supply of kegs and cartons are available nationally.

Coopers 2021 Vintage Ale is the 21st in the series of Vintage Ales that commenced in 1998.

It has an alcohol level of 7.5% ABV and is expected to be available in liquor outlets 355ml bottles from late July in six packs and cartons.

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