Origin Energy & Santos S&P moving the goal posts

Transcription

1 AUSTRALIA Origin Energy funding picture Source: Macquarie Research, November 2012 Santos funding picture Source: Macquarie Research, November November 2012 Macquarie Securities (Australia) Limited S&P moving the goal posts Event S&P has indicated that it is reviewing the equity credit that it applies to hybrid securities and that this review could lead to a revision of the equity content for some existing instruments from high to either intermediate or minimal equity content. This suggests these new regulations could apply retrospectively to existing securities, dramatically affecting the forecast LNG development funding gaps for both ORG and STO. Impact Little clarity: S&P is shedding little light on these proposed changes ahead of its formal request for comment process later in the month with the final verdicts not due until January or February next year (suggesting we may have to live with this uncertainty for some time). Such significant changes to existing policies is understandably frustrating for both ORG and STO given that both companies have seemingly set up their balance sheets to suit the S&P criteria during these sensitive development periods. Perhaps less wedded to BBB+: Perceived funding gaps for ORG and STO were driven by management wanting to preserve their respective BBB+ credit ratings. As a result, with S&P now potentially re-classifying aggregate equity of up to A$2.8bn, funding shortfalls look set to grow significantly. This could see ORG and STO question the significance of preserving their BBB+ ratings given the growing cost of compliance and pressure for downgrades (although both are likely to do whatever is required to remain investment grade). Outlook STO (Outperform, A$16/sh): Along with the recent U$2.5bn GLNG capex acceleration, this potential change to S&P metrics is likely to tighten STO s once comfortable funding position further. Specifically, assuming on-time and on-budget deliveries of GLNG and PNG LNG along with an underwritten DRP (none of which are assured) we estimate STO s current A$1.3m funding surplus would shrink to a surplus of A$600m or shortfall A$550m depending on wether its hybrids are given 50% or 0% equity credit. Management however stress that, having already secured all necessary funding (none of which contains any credit rating triggers) STO s financial resilience or liquidity position would not change as a result of any changes to S&P criteria. That said, management remains wedded to an investment grade rating (but we note that this does not necessarily mean BBB+). ORG (Outperform, A$15.50/sh): Given its existing funding gap, ORG would seemingly be the most affected by any change to hybrid classifications. While under a worst case scenario (hybrids given 0% equity credit and its current 37.5% APLNG stake) we estimate a funding gap of ~A$2bn (or A$1.2bn with 50% equity credit) which would make ORG s balance sheet uncomfortably exposed to any potential development hiccups at APLNG. However, with growing suggestion that management could let the credit rating slip during the APLNG development period to reduce pressure on the balance sheet, along with the proposed APLNG sell-down or a potential equity raising (or now possibly both) ORG still has some funding tools to deal with its current predicament, but it s getting harder. As a result, ORG s balance sheet could prevent a share price recovery until this review process is complete. Please refer to the important disclosures and analyst certification on inside back cover of this document, or on our website

2 Macquarie Private Wealth Fig 1 Origin Energy and Santos funding gap based upon S&P s equity treatment of Hybrids STO s balance sheet looks manageable even if faced with a change in treatment, while ORG is facing an even larger funding gap Hybrids and Convertible Notes Equity Credit Funding Shortfall/(Surplus) assuming a DRP and no cost overrun Funding Shortfall/(Surplus) assuming a DRP and 20% cost overrun Equity Treatment 0% 50% 100% 0% 50% 100% ORG 500m 100% A$900m 100% $2,115 $1,166 $839 $3,463 $2,514 $1,564 STO 1,000m 100% $555 -$624 -$1,343 $1,242 -$198 -$791 Source: Company Data, S&P, Macquarie Research, November 2012 Fig 2 We estimate STO s current A$1.3m funding surplus would shrink to a surplus of A$600m or shortfall A$550m depending on whether its hybrids are given 50% or 0% equity credit Fig 3 However, under a scenario where S&P give no equity credit for hybrids and assuming a 20% cost overrun, the shortfall grows to A$1.2bn Fig 4 ORG is already facing a ~A$800m funding gap assuming an underwritten DRP and no cost overrun at APLNG), however this grows to ~A$2bn if S&P give no equity credit for existing hybrids and notes Fig 5 Assuming a 20% cost overrun at APLNG, ORG could be facing a material A$3.4bn assuming 0% equity credit, which would require a combination of a larger equity sell-down in APLNG and an equity raising S&P likely to show short-term leniency; S&P likely to show short-term leniency; Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Source: Company Data, S&P, Macquarie Research, November November

3 Macquarie Private Wealth Fig 6 Santos financials Santos (STO-AU) Share Price: A$11.37 Outperform Shares: 958.8m Profit & Loss 1H12A 2H12E 2011A 2012E 2013E 2014E Price Assumptions 1H12A 2H12E 2011A 2012E 2013E 2014E Sales revenue A$m 1,493 1,713 2,530 3,206 3,786 4,370 US$/A$ add other income A$m Domestic gas A$/Gj Total revenue A$m 1,523 1,752 2,641 3,275 3,868 4,457 Oil-Brent US$/bbl less operating costs A$m (649) (694) (1,060) (1,343) (1,605) (1,742) EBITDAX A$m 874 1,059 1,581 1,933 2,263 2,715 Production 1H12A 2H12E 2011A 2012E 2013E 2014E less exploration expensed A$m (86) (111) (167) (197) (160) (160) Natural gas PJ EBITDA A$m ,414 1,735 2,103 2,555 Crude mmbbl less dep. & amort. A$m (377) (416) (641) (793) (896) (960) Condensate mmbbl less other non-cash costs A$m LPG k tonnes EBIT A$m ,207 1,595 LNG k tonnes less net interest A$m Total production mmboe Pre-tax operating profit A$m ,031 1,297 1,603 Third party sales mmboe less tax expense (incl PRRT) A$m (182) (268) (413) (450) (602) (789) Total sales mmboe Net operating profit A$m add non-recurring items A$m (21) (21) - - Reported profit A$m add (goodwill amm - pref div) A$m Adjusted profit A$m EPS (Adjusted) Acps EPS Growth % 26% 4% 12% 21% 18% 16% DPS (Ordinary & Special) Acps Franking % 100% 100% 100% 100% 100% 100% EFPOWA shares on issue m Cashflow Analysis 1H12A 2H12E 2011A 2012E 2013E 2014E Reserves 2011A 2012E 2013E 2014E Cash receipts from operations A$m 3,397 3,528 3,067 3,528 3,920 4,466 Natural gas PJ 3,458 3,248 3,016 2,783 less operating costs A$m (1,572) (1,543) (1,263) (1,543) (1,605) (1,742) Oil mmbbl less gross interest paid A$m (96) (28) (175) (124) 38 (1) Condensate mmbbl less tax paid A$m (42) (242) (357) (284) (520) (646) LPG k tonnes 2,070 1,865 1,596 1,316 Cashflow from operations A$m ,234 1,545 1,792 2,033 Total 2P reserves mmboe 1,364 1,311 1,253 1,192 less development & exploration A$m (1,434) (2,089) (2,915) (3,523) (4,205) (2,417) Contingent resources mmbbl 2,162 2,162 2,162 2,162 less acq./inv. A$m (73) - (60) (73) - - Total reserves & resources mmboe 3,526 3,473 3,415 3,354 add divestment A$m less dividends paid A$m (78) (143) (155) (221) (288) (291) 2P reserve life years add debt movements A$m (31) 426 1, EV/ 1P reserves A$/boe add equity movements/other A$m EV / 2P reserves A$/boe Net cashflow A$m (411) (1,163) (979) (1,574) (1,566) 43 EV / Total resources A$/boe add exchange rate adj. A$m (6) - (8) (6) - - EV/ 1P reserves US$/boe Increase in cash A$m (417) (1,163) (987) (1,580) (1,566) 43 EV / 2P reserves US$/boe Net debt at year end A$m 616 1,958 (71) 1,958 4,545 5,103 EV / Total resources US$/boe Balance Sheet 1H12A 2H12E 2011A 2012E 2013E 2014E Per Barrel Statistics 1H12A 2H12E 2011A 2012E 2013E 2014E Cash & cash eq. A$m 2,915 1,752 3,332 1, Sales revenue / boe US$/boe Current assets A$m 4,123 2,960 4,752 2,960 1,394 1,437 EBIT / boe US$/boe Fixed assets A$m 12,451 14,031 11,062 14,031 17,221 18,561 Profit / boe US$/boe Total assets A$m 16,574 16,991 15,814 16,991 18,614 19,998 Opex/boe US$/boe Current liabilities A$m 1,362 1,388 1,524 1,388 1,469 1,612 Capex/boe US$/boe Total liabilities A$m 7,284 7,489 6,851 7,489 8,590 9,334 DDA/boe US$/boe Shareholder equity A$m 9,290 9,502 8,963 9,502 10,024 10,664 Cash flow/boe US$/boe Ratio Analysis 1H12A 2H12E 2011A 2012E 2013E 2014E WACC of 10.6% ND/ND+E % 6% 17% -1% 17% 31% 32% Producing assets A$m A$ps % Interest cover x 9.9 x 10.2 x 9.3 x 10.0 x 12.1 x 10.7 x Cooper Basin Area 2, Dividend payout ratio % 50% 48% 36% 51% 42% 36% Onshore Queensland CSG Assets ROA % 3% 3% 5% 6% 7% 8% Otway Gas ROE % 3% 3% 5% 6% 7% 8% WA Gas 2, ROIC % 3% 3% 5% 5% 5% 5% WA Oil Effective tax rate % 30% 37% 37% 34% 33% 34% South East Asia 1, EBITDA margin % 53% 55% 56% 54% 56% 58% Bayu-Undan 1, EBIT margin % 28% 31% 31% 30% 32% 37% Developing assets Free cash flow A$m (401) (1,273) (1,050) (1,674) (2,462) (348) Kipper risked 100% Glastone LNG train 1&2 risked 100% Valuation 1H12A 2H12E 2011A 2012E 2013E 2014E Cooper Basin - 2C risked 50% 1, EV/EBITDAX ratio x 15.0 x 10.9 x 6.8 x 6.0 x 5.1 x 4.2 x Cooper Basin/GLNG gas supply risked 100% EV/DACF ratio x 18.7 x 14.3 x 9.3 x 7.6 x 6.6 x 5.8 x Fletcher/Finucane risked 100% P/E ratio x 44.3 x 36.5 x 22.5 x 18.6 x 15.8 x 13.6 x PNG LNG trains 1 & 2 risked 100% 3, P/CEPS ratio x 33.6 x 26.4 x 8.1 x 6.9 x 6.3 x 5.7 x Static assets & exploration FCF yield % nmf nmf nmf nmf nmf nmf PNG LNG train 3 risked 50% Dividend yield % 1.1% 1.3% 2.6% 2.6% 2.6% 2.6% Discoveries 1, Exploration Sensitivities (Adjusted Earnings) Valuation 2011A 2012E 2013E 2014E Financial assets Oil price (+US$1/bbl) A$m Corporate/tariffs/other (405) (0.50) delta Cash & Investments 2, % 0.0% 0.3% 1.2% 1.4% Debt (2,557) (2.65) Currency (+1c) A$m Risked NPV 17, delta Shareprice prem/(disc) to NPV -36% 0.0% 0.0% -0.2% -0.9% -1.0% - core NPV per share (A$) risked NPV per share (A$) unrisked NPV per share (A$) mmboe Gas Crude Condensate LPG LNG Source: Company data, Macquarie Research, November November

4 Macquarie Private Wealth Fig 7 Origin Energy financials Origin Energy (ORG-AU) Share Price: A$11.00 Outperform Shares: m Profit & Loss 2H12A 1H13E 2012A 2013E 2014E 2015E Assumptions 2H12A 1H13E 2012A 2013E 2014E 2015E Total Revenue $m 6,436 6,400 12,935 13,372 14,435 15,008 USD/AUD c less operating costs $m (5,382) (5,368) (10,752) (11,087) (11,966) (12,465) AUD/NZD c EBITDA $m 1,054 1,033 2,183 2,285 2,470 2,543 WTI oil prices US$/bbl less dep. & amort. $m (306) (315) (614) (634) (647) (659) EBIT $m ,569 1,652 1,823 1,884 E&P Production 2H12A 1H13E 2012A 2013E 2014E 2015E less net interest expense $m (110) (163) (217) (331) (414) (476) Natural gas (inc Ethane) PJ add share in associates (inc. APLNG) $m Crude kbbls Profit before tax $m ,381 1,409 1,560 1,650 Condensate kbbls , , , ,608.8 less tax expense $m (188) (182) (415) (434) (475) (499) LPG ktonnes Net profit $m ,084 1,151 APLNG PJe less minorities $m (41) (36) (73) (73) (88) (100) Total production (inc APLNG) PJe Adjusted profit $m ,051 add net abnormals $m (218) (22) 87 (54) (81) (89) E&P Reserves 2H12A 1H13E 2012A 2013E 2014E 2015E add amortisation of goodwill $m P Reserves PJe 1, Reported profit $m P Reserves PJe 6,037 5,948 5,861 5,772 3P Reserves PJe 9,817 9,728 9,641 9,551 EPS (Adjusted) Acps P reserves life yrs EPS Growth % 7.4% -21.6% 16.2% 0.0% 9.6% 4.8% Generation 4.23 Retail 8.32 EPS (Reported) c Contact Generation NPV breakdown ,000 A$m Segment EBITDA DPS (Ordinary & Special) Acps E&P % Franking % 100% 100% 100% 100% 100% 100% APLNG ,000 EFPOWA shares on issue m 1, , , , , ,107.6 Other 0.99 Retail 4,000 Other 38% 4% Cash Flow Statement 2H12A 1H13E 2012A 2013E 2014E 2015E 3,000 Total revenue $m 6,436 6,400 12,935 13,372 14,435 15,008 less operating expenses $m (5,382) (5,368) (10,752) (11,087) (11,966) (12,465) 2,000 less net interest expense $m (192) (195) (366) (408) (531) (604) APLNG 19% less tax payable $m (26) (192) (39) (448) (479) (479) 1,000 Total payments $m (5,600) (5,755) (11,157) (11,943) (12,975) (13,548) Contact E&P - 9% Gross cash flow $m ,778 1,430 1,460 1,460 11% add proceeds from sales $m add capital raisings/debt drawdowns $m 2,813 1,167 7,579 1,491 1,522 2,586 Energy Networks APLNG Exploration and Production Energy Markets Contact less debt repaid $m (2,120) (150) (6,330) (158) (150) (2,320) 20% RoFe RoFe by division 3,000 A$m Segmental Capex less capital expenditure $m (1,030) (1,771) (1,556) (1,253) (627) (731) 18% less dividends paid $m (249) (272) (411) (546) (607) (614) 16% 2,500 14% add change in working capital 52 (70) (307) (140) (82) (35) 2,000 12% add other $m (818) 880 (1,161) (1,147) (1,571) (295) 10% 1,500 Net cash flow $m (480) 473 (367) (279) (54) 52 8% Cash at Beginning of Period $m ,000 6% Cash at end of period $m % 500 2% Balance Sheet 2H12A 1H13E 2012A 2013E 2014E 2015E - 0% Cash Fixed Assets 10,895 11,313 10,895 11,470 11,450 11,523 E&P Energy Markets Contact Exploration and Production Contact Energy Corporate Energy Markets APLNG Exploration Assets Intangibles Valuation 2H12A 1H13E 2012A 2013E 2014E 2015E Other 15,266 15,356 15,266 16,592 18,482 19,132 EV/EBITDA ratio x 7.8 x 7.8 x 7.6 x 7.1 x 6.3 x 5.8 x Total Assets 27,981 28,962 27,981 29,602 31,419 32,192 EV/EBIT ratio x 11.0 x 11.3 x 10.6 x 9.8 x 8.5 x 7.8 x Senior Debt 4,296 5,275 4,296 5,553 6,841 7,024 P/E ratio x 16.8 x 16.2 x 16.5 x 13.3 x 12.1 x 11.6 x Total Liabilities 13,523 14,354 13,523 14,692 16,030 16,272 P/CEPS ratio x 8.0 x 8.6 x 10.0 x 8.1 x 8.7 x 8.5 x Total S/Holders Funds 14,458 14,608 14,458 14,910 15,389 15,921 FCF yield x % -3.09% -4.98% -5.27% 0.20% 11.66% Dividend yield x 3.78% 4.55% 3.66% 4.92% 4.94% 5.17% Key Ratios 2H12A 1H13E 2012A 2013E 2014E 2015E Net Debt/Equity % 28% 29% 28% 32% 35% 35% WACC of 9.3% Net Debt/(Net Debt+Equity) % 38% 41% 38% 47% 55% 54% Base business A$m A$ps % Debt Coverage Ratio % 6.0 x 4.3 x 6.2 x 4.8 x 4.4 x 3.9 x Generation 4, Enterprise Value $m 19,918 18,049 20,368 19,098 20,521 20,737 E&P 2, Effective tax rate % 28% 30% 30% 30% 30% 30% Retail 9, EBITDA margin % 16.4% 16.1% 16.9% 17.1% 17.1% 16.9% Contact 2, EBIT margin % 11.6% 11.2% 12.1% 12.4% 12.6% 12.6% Developing assets ROA % 5.8% 5.5% 6.0% 6.2% 6.8% 7.2% APLNG Domgas risked 100% ROE % 7.3% 6.3% 7.4% 7.2% 7.8% 8.0% APLNG tr 1 risked 100% 1, ROIC % 4.1% 2.9% 4.6% 3.8% 3.7% 3.7% APLNG tr 2 risked 100% 2, Free cash flow $m (784) (185) (740) (634) 25 1,421 APLNG tr 3 risked 15% ATP 788P risked 50% Segmental EBITDA 2H12A 1H13E 2012A 2013E 2014E 2015E GLNG supply contract risked 75% E&P Trefoil (T/18P - Bass Gas) risked 50% Energy Markets ,562 1,653 1,697 1,729 Redback South-1 (Perth) risked 75% Contact Energy Redback South-2 (Perth) risked 75% APLNG Mbawa-1 (L8 - offshore Kenya) risked 10% Corporate (46) (46) (86) (93) (94) (95) Static Assets Total EBITDA (inc. associates) 1,095 1,089 2,252 2,420 2,709 2,948 Generation options risked 12% Underlying EBITDA growth -5.4% -0.5% 26.4% 7.5% 11.9% 8.8% Financial Assets Cash Debt (5,546) (5.11) Solar Power Corporate overheads (226) (0.21) Risked NPV 19, Shareprice prem/(disc) to NPV -37% Source: Company data, Macquarie Research, November November

5 Macquarie Private Wealth Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie First South - South Africa Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3000 index return Neutral (Hold) return within 5% of Russell 3000 index return Underperform (Sell) return >5% below Russell 3000 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down % in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 60% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 40% in a year. Low medium stock should be expected to move up or down at least 25 30% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 30 Sept 2012 AU/NZ Asia RSA USA CA EUR Outperform 50.00% 56.85% 61.54% 41.38% 63.19% 44.15% (for US coverage by MCUSA, 7.35% of stocks covered are investment banking clients) Neutral 36.62% 25.14% 27.69% 52.13% 30.77% 30.57% (for US coverage by MCUSA, 9.31% of stocks covered are investment banking clients) Underperform 13.38% 18.02% 10.77% 6.49% 6.04% 25.28% (for US coverage by MCUSA, 0.00% of stocks covered are investment banking clients) Company Specific Disclosures: Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Origin Energy Limited's equity securities. Macquarie acted as Joint Lead Manager to Origin Energy Limited for an offer of dated, unsecured, subordinated, cumulative notes to raise $500 million with the ability to raise more or less. The Macquarie Group acted as financial advisor to Origin Energy in relation to its acquisition of the retail businesses of Integral Energy and Country Energy as announced on 15 December The Macquarie acted as joint lead manager, underwriter and joint bookrunner to Origin Energy Limited on a pro-rata renounceable entitlement offer as announced on 15 March Within the last 12 months, Macquarie Group has received compensation for investment advisory services from Origin Energy Limited. Macquarie Bank Limited makes a market in the securities in respect of Origin Energy Limited. Macquarie Bank Limited makes a market in the securities in respect of Santos Limited. Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Santos Limited's equity securities. Important disclosure information regarding the subject companies covered in this report is available at Analyst Certification: The views expressed in this research reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Macquarie Group Ltd (ABN , AFSL No ) ( MGL ) and its related entities (the Macquarie Group ) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. General Disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN , AFSL No ) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN , AFSL No ) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN , AFSL No ) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return and delete the document. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at 6 November