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Tough year for the Deloitte WA Index – a 10.9% fall


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5 August 2013: Deloitte today released a special edition of the Deloitte WA Index at the opening of the Diggers & Dealers Mining Forum in Kalgoorlie, highlighting the performance of WA listed companies in the 2013 financial year.

The Deloitte WA Index fell 10.9% in the year ended 30 June 2013, closing at AU$125.6bn.
Deloitte Lead Audit Partner Tim Richards said the result was driven largely by volatile commodity prices and uncertainty surrounding economic growth which had a combined impact on manufacturing activity and investment decisions.

“The sharp fall in iron ore prices most significantly affected key mining players Fortescue Metals Group and Atlas Iron, with AU$6.1bn and AU$1.2bn wiped off their market capitalisation respectively over the past 12 months,” he said.

“Major capital project delays and cancellations have led to significant flow on effects, with repercussions felt throughout the engineering, construction and other mining support service industries.”  

Many commodity prices fell significantly over the 12 month period, due in part to concerns about the strength of the global manufacturing economy and commodity oversupply, with most experiencing market saturation. Gold fell 23.9%, silver 30.4% and iron ore 14.4% during the financial year 2013, while palladium had the largest increase of 11.2%.

The share price gains from the December reporting season through to February 2013, were more than wiped out by the downward spiral experienced by WA markets from March through to June 2013.

“The performance of the WA Index is contrasted by the outperformance of financial institutions during the year. The Big Four banks were among the biggest gainers on the All Ordinaries Index which increased 15.5% in the year,” he said.

“Westpac Banking Corporation took the lead with growth in market capitalisation of 37.9%, followed closely by Commonwealth Bank of Australia, Australia & New Zealand Banking Group and National Australia Bank, which also posted high growth during the year.”

The 10.9% fall in the Deloitte WA Index over the year underperformed in comparison to major international indices surveyed. Japan’s Nikkei was the standout performer, experiencing an increase of 54.1% over the year. The US S&P 500 followed the trend with an increase of 20.9% and London’s FTSE 100 rose by 11.5%.

The Diggers & Dealers special edition of the Deloitte WA Index also analyses the state of the WA economy, outlines the ten pitfalls of mining project delivery and reviews labour productivity in Australia.

For a full copy of the report, please visit Deloitte at their Diggers & Dealers booth (8). Alternatively, you can download a copy here. 

Deloitte WA Index High Growth Awards 2013

The top five growth companies, in terms of market capitalisation, for the year ended June 30 2013 were:

- Sirius Resources NL (Sirius) increased its market capitalisation by 5,422.2% from AU$8m to AU$418m during the year ended 30 June 2013. As at 30 June 2013, Sirius was ranked 28th in the Deloitte WA Index. Sirius’ rise to fame came as a result of four key events; the Nova discovery in July 2012; the completion of an AU$44m capital raising in December 2012; the announcement of the maiden resource estimate for Nova in February 2013; and the Bollinger discovery in late February 2013.

- Atrum Coal NL (Atrum) saw an increase in its market capitalisation by 235.6% from AU$27m to AU$90m during the year ended 30 June 2013.  Atrum’s flagship Groundhog Coal Project is located in Canada’s Groundhog Coal Basin, 1200km by rail from Port of Prince Rupert or Vancouver Metro. Exploration activities have started at the site, with drilling commencing on 24 June 2013. The target is a planned program of 30 drill holes split across two phases for approximately 11,000 metres.

- Hot Chili Limited (Hot Chili) increased its market capitalisation by 74.1% from AU$83m to AU$144m during the year ended 30 June 2013, breaking into the ASX All Ordinaries Index and ranking 66th on the Deloitte WA Index. Hot Chili listed on the ASX in May 2010, and operates four major multi-commodity copper coastal projects, all of which are located in Chile’s Region III and IV and re targeting iron oxide copper gold ore deposits (IOCG). Hot Chili’s largest project is the 100% owned Productora Project where drilling commenced in August 2010.  

- BC Iron Limited (BCI) increased its market capitalisation by 53.4% from AU$260m to AU$398m during the year ended 30 June 2013, ranking 30th on the Deloitte WA Index, up from 62nd as of June 2012. In January 2013, BCI increased its stake in the Nullagine Iron Ore Joint Venture Project from 50% to 75%, while Fortescue Metals Group provided increased port & rail capacity to support a 6Mtpa operation.

- Base Resources Limited (Base) rose by AU31m, from AU$182m to AU$213m, through progress at its Kwale Mineral Sands Project in Kenya.  As of May 2013 construction of the project was 85% complete and on track to commence production in Q3 2013. The Kwale project is expected to have a significant impact on the Kenyan economy, with an expectation that the project should expand the mineral sector’s export earnings three-fold, add 0.8% to the country’s GDP and bring in over US$300m in tax and royalties.

Deloitte at Diggers & Dealers

The Deloitte team and copies of the full Deloitte WA Index report are available at the Deloitte booth (8) at the Diggers & Dealers Mining Forum in Kalgoorlie this week.

Deloitte is also hosting an event on the evening of Monday, 5 August 2013, to celebrate the Deloitte WA Index High Growth winners. Guests will have the opportunity to network with industry friends and take part in some interactive team games. Further information can be found at http://www.deloitte.com/au/diggers2013


WA’s top 100 listed companies as at 30 June 2013 - See the table in the downloadable version of the media release

NB: See our media releases and research at www.deloitte.com.au

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Contacts

Name:
Tim Richards
Company:
Deloitte Australia
Job Title:
Partner, Clients & Markets
Phone:
Tel: +61 8 9365 7248
Email
atrichards@deloitte.com.au
Name:
Warrick Hazeldine / Casey Hockey
Company:
Cannings Purple
Job Title:
Phone:
T: +61 8 6314 6300
Email
whazeldine@canningspurple.com.au, chockey@canningspurple.com.au

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