Search ForexCrunch

The Australia and New Zealand Banking Group (ANZ) analysts are out with their quick reaction to the Australian Q2 Company Operating Profits data released earlier today.

Key Quotes:

“Q2 business indicators were mixed with the decline in inventories offsetting stronger than expected wages numbers, and solid headline profits. Non-mining profits were disappointing though, in contrast to the relatively solid 2019-20 capex plans.

 Company profits posted a strong headline rise (+4.5% q/q) in Q2, following an upwardly revised rise of 2.6% in Q1 (initially reported as +1.7%). After adjusting for inventory valuations, the result is less strong, with non-financial profits on a GDP basis rising 2.3% q/q.

Once again, the resources sector drove profits with mining profits up a strong 11% q/q and 32% y/y. Non-mining profits rose just 0.3% q/q, and are up only 1.5% over the past year. Across the non-mining sectors, weakness was most apparent in utilities (-11% q/q) and manufacturing (-3.4%).  

Together, these numbers make us feel comfortable with our forecast for a modest rise of 0.2% q/q in Q2 GDP, due on Wednesday.”