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Lateline Business -

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(generated from captions) months before key mid-term elections. Oh nice! Oh! first family is on a symbolic

24-hour holiday, reclaiming in

front of the cameras the BP oil spill-affected vacation coastline of Florida. Hole in

one! Political holes in one

are rarer as the President found at a White House ceremony

marking Ramadan. As a citizen

and as President, I believe

that Muslims have the right to

practise their religion as everyone else in this country. (APPLAUSE)

country. (APPLAUSE) And that

includes the right to build a

place of worship in a community

centre on private property in Lower there has been fierce

opposition to the construction

of a mosque in an old clothing

store two blocks from New York

's Ground Zero. Its pron

opponents say it will be a home

for all people yearning for

understanding, healing and

peace. Opinion polls suggest

more than two-thirds of Americans oppose the Muslim

It's right in the shadow of

Ground Zero. We think that's

care about the mosque. They can being insensitive. I don't

build it. I'm not build

discriminating religion but not here. There's a fair amount of

insensitivity involved with

having the mosque built here, being that 19 of the 9/11

terrorists were Muslim. The White House had previously

skirted around the controversy, which has divided some leading

Republicans. New York mayor

Michael Bloomberg is in favour

of the project, while former Vice-Presidential candidate

Sarah Palin and former house

represent tifs leader newt

gring rich want it stopped.

With the November mid-term elections coming up President Obama subsequently felt the

need to clarify his views on

the mosque. Well, my intention

was to simply let people know

what I thought. Which was that

in this country, we treat

everybody equally. In accordance with the

Regardless of race or religion.

I will not comment on the

wisdom of making a decision to

put a mosque there. I was

commenting very specifically on

the right that people have that

dates back to our

founding. Barack Obama's

intervention is now being used

by Republicans to paint the President as out of touch and

he is being accused of back

pedalling, fence silt ng and vagueness. What the President should've said is the Muslim community has the right construct the mosque but they also have the responsibility to

the talk with the families and for

the President to ignore that

and just talk in

about rights totally missed

point. Many commentators want

religion out of the argument

but the fact remains there was

a Muslim prayer room in the

World Trade Center. There was a prayer room in the World Trade Center, in World Trade Center

No. 2. Most people don't know

that. They don't know that Muslims were milled as well. I come a day every

day. And just so happens that

day I came a little early. So I

just missed those planes. I

would've been in that rubble as well. It's a local planning

issue that President Obama may

regret ever stepping into.

economy has The growth of the Japanese

economy has slowed markedly,

with gross domestic product

increasing by just .1% for the

quarter ending in June giving

an annualised rate of .4%. Weak global demand for exports was behind the slowdown

and now threatens the country's

already shaky recovery. Beyond the July-September quarter, growth will slow

as the effects of economic stimulus on the Japanese

economy fade away fully. The

current quarter's figures just

illustrate the first effects of

this. Today's figures mean

that China is now almost

certain to overtake Japan as

the world's second largest economy this year, behind the

United States. Now to the

weather. Partly cloudy but dry

in Melbourne and Hobart.

That's all from us. If you

want to look back at

discussion with Bob Katter and

Tony Windsor or review any of 'Lateline''s stories or transcripts you can visit the

web sites and also follow us on

twit twipt and Facebook. I will

see you again tomorrow.

Goodnight.

Closed Captions by CSI This Program Is Captioned

Live.

Good evening. Welcome to

Lateline Business. I'm Ticky

Fullerton. Tonight - we talk to

Wal King, boss of construction

giant Leighton Holdings, whose

big profits and bullish outlook

for his company boosted for his company boosted the market. Like any major

earthquakes there is residual

effects. We have residual

effects in our property market

and also in the Middle East.

But over time that will But over

subside. And I daresay in three

or four years we'll look back

on the global financial crisis

as a blip. Also tonight - a

takeover battle for AWB.

Canadian giant Agrium trumps GrainCorp, but is either out -- outcome satisfactory? Either

you want a monopolistic

attitude or foreign ownership

here. And Newcrest proves it's

mineing a rich seam. We had

profits increase substantially

to the 12 months to June that

was the underpinning

improvement for the company. To

the markets.

A sbriz bidder has emerged

for Australia's biggest wheat

exporter AWB. Canadian

weighed in with an all-cash bid

worth $1.2 billion, trumping an

all-share offer from GrainCorp.

Also surprising the market today, Sigma Pharmaceuticals which has agreed to sell its

drug business for $900 million.

AWB has been seeking a suitor

since it lost its monopoly over

the country's bulk wheat

exports two years ago, and now

it has two to choose from.

Trumping a merger proposal with

made a rival offer of $1.2 GrainCorp, Canada's

billion, pricing AWB at $1.50 a

share. It's trying to pick up a

distressed asset towards the

bottom of its earnings cycle W

wheat prices shooting to

two-year highs in the last

couple of trading sessions, its

got dollar signs in its eyes.

said: A statement to the market AWB

The board has two very

different offers to

consider. With the GrainCorp

bid you're creating a grain

handling company that will

concern for the ACCC. But then control close to 50% which is a

you have Agrium, an offshore

company, so there might be a

concern with FIRB. Agrium's

bid is the latest foreign play

for Australian assets, and follows Canada's Vitera's

purchase of ABB Grain. Jonathan

Barratt says he's not sure how

much more consolidation the sector can take. How many more

companies are there to be sold?

The wheat market has been

pretty tight in terms of the fraimt. After this you will

probably find once it's settled

that the sector will settle

down and hopefully they'll get

on to the task of actually selling the wheat that we

grow. AWB shares soared by almost a third. GrainCorp's

shares finished 4% stronger.

It's believed it won't up its

offer but it could lose out if

there is truth behind rumours

morbiders may emerge. Agrium's

proposal is conditional on due diligence and foreign

investment approval. As weighs up potential takeover offers,

offers, struggling pharmaceuticals company Sigma is selling its pharmaceutical s

division to South Africa's Pharmacare for $900 million.

The deal wipes away the

company's debt leaving extra

cash on the balance sheet and

its profitable health care and

retail division. It lets the

company grow in an area it has

core competency in. The PBS has

been growing strongly in recent

years. Sigma's wholesale

business has been growing on

the strength of that and I think it to continue to grow. Sigma

first began attracting interest

in April, after a major

writedown of its generic

business and a

sent its share price into

freefall and resulted in a

management shake-up which cost

the CEO his job. Aspen

initially made a bid for the entire company but after considering a range of offers,

Sigma's board decided this was

the best fit. In a statement, Chairman Brian Jameson said:

And relieved investors bid

the stock up 4% by the close.

The sale still needs share

holdered and regulatory approval. Now to the profit

reporting season and shares in Australia's Australia's biggest construction firm Leighton

Holdings soared today. Profits

came in at $612 million, up 39% on has plenty of work in hand. I spoke to Leighton Holdings' CEO Wal King about the way ahead and how policy is

infrastructure, mine ng and

resource markets. Welcome to

Lateline Business. Thank you.

The market loved the results today. That must feel

particularly good given particularly good given the

slide that Lleytons have had of

24% over the years so far? It

reflects the positive nature of

the company. The reflect Australia's place in Asia. Asia is developing. This

is going to be Asia's century.

If you look at the work order

and the momentum and the cash

flow, a net cash flow of flow, a net cash flow of $1.74

billion for the year is really an excellent result. Presumably

the market will also have liked

your timely announcement from

your subsidiary December on the

hunter expressway? We have

$41.5 billion worth of work in hand.

work in hand is up upwards and the momentum is in that

direction. We have about $10

billion worth of work where

we're preferred bidder on.

That's like one-on-one negotiations. We have another $20 billion

we have a high probability of winning. So I mean our

aspirational goals of having a

$50 billion order book by

2014/15 we think is very, very

realistic and achievable, so

the company's got a lot of

momentum. I think at the half

year they were marked down because they were a bit the amount that was expected in

terms of work in hand. But

we're not about 30th of June

dates. We're about a momentum,

a forward momentum. The company

has a huge amount of momentum

in its work in hand and its

opportunity is coming towards

it. You said to watch for a

rocky road as we get through

the financial crisis V you got any particular concerns there? Well, like any major

earthquakes there is residual

effects. We have residual

effects in our property and also in the Middle East but

over time that will pub side

and I daresay in three or four

years we'll look back on the global financial crisis as a

blip in the development. But I think the world is changing in

a very rapid rate. And Asia is

becoming more important. I think the GFC has actually

accelerated the move towards accelerated the move towards

the Asian country. Your

contract mining side is going

very well. How do you see the

whole mining tax drama from

your point of view and if Labor sort of impact will the mining

tax have on you? I think the

tax was a drama. You said the

word drama. It is a drama. I

mean the way it

the abrupt nature of the abrupt nature of it, without proper consultation,

really undermined confidence

and I think the sovereign risk

in Australia has increased

either in perception or reality

but at the end of the day,

perception becomes reality. Big

mining companies are looking at

elsewhere investing in the

world. I don't think anyone

likes the surprises. has a huge amount of resources

and will be a continued

provider for the resources that

are needed to power the world

along. But Australia hasn't

resources to itself. There is

other places in the world to

invest, as we see in Mongolia, Mongolia is developing very,

very rapidly, and we believe

that within a few years we'll

be doing 30, 40 million tonne

of mining of coal there. That

will be in direct competition

with Australia. We already have

ord ers to move to 20 million a

tonne of year. Every tonne

taken from Mongolia is direct

competition with Australia. the concept that Australia has the resource on its own and

should be milked is a ridiculous proposition snoochl as someone who sees infrastructure as so vital to driving the economy, the government's Building the

Education Revolution program,

do you think the sort of

failings that were found by Brad Orgill were to be expected

in a roll-out of that

xwind? You have to keep a

balanced perspective says that

stimulus was needed. It was

rolled out very quickly and

there have been some

imperfections found. The concept of blowing those

imperfections into a gigantic space is wrong. You have to

take a balanced perspective.

In the main the stimulus

package was good in providing

infrastructure and the like.

But there has been some

problems. And finally your chairman response to the Australian

Stock Exchange today about an Australian newspaper article on

succession planning. We all

know you're irreplaceable. Was it the share it the share price and the

impact on it that he was

concerned about? Well, the

papers, the media think it's a

great topic to engage in about

speculation planning. I'm just

doing my job. Every day is

closer to rain. One lie I will the AGM for shareholders? It's

a developing story. Speculation is in no-one's interest. Wal

King, thanks very much for talking to Lateline Business. Thank you very Australia's biggest goal miner Newcrest has posted

record full year profits thanks to increased gold production and higher commodity prices.

The company's boss is now keen

to finalise the merger with smaller rival one of the world's biggest gold

companies. The strong demand

for gold during these uncertain

economic times has helped make

the 2010 financial year a

glittering one for Australia's

largest goldminer. This is a

very solid result. We have a

great base toys move forward

over the next 15, 20 years. Newcrest's full-year

of almost $557 million is more

than double last year's figure

of 248 million and the

underlying profit of $763 million exceeded the expectations of most analysts. Commodity prices were

clearly the biggest driver for

the improved profitability for

Newcrest, and we had both

copper and gold prices increase

substantially in the 12 months

to June, and that was really the underpinning improvement

for the company. In fact, the average gold year 2010 was up 7% on last

year, and the average copper

price 18% higher. That more than made up for the negative

impact of the strong impact of the strong Australian dollar. Newcrest dollar. Newcrest says keeping costs down was almost a key

factor in the result. If you go

back three or four years,

Newcrest haven't been the best

producers in the world with

regards to their costs, so I think hopefully they've learned

from past experience and are

putting together a much better

outfit than two or three years

ago. Newcrest is ago. Newcrest is now poised to expand its presence on the

global stage as its merger with

Lihir Gold nears completion.

Lihir shareholders are due to

vote next Monday. This

requires court approval in

Papua New Guinea, where the

bulk of Lihir's assets lie. Two

weeks from today all going well

we take over day-to-day

management. A short time after

that, a fortnight after that, the wrap-up of the total

transaction. Even at this late

stage a rival bidder could

emerge but that's considered unlikely.Age lift Mark Neuter

says if the deal goes ahead as planned the measure of planned the measure of success

will be the ability to make the most of most of the synergys that tie up offers. They have a lot of

cash a lot of available credit.

I think it's around $1 billion

elsewhere apart from the cash

that they have. Lines of credit

available. So they're well

positioned for the future as

long as they keep things under

control which I think they

will. Newcrest says it's

already on track to lift annual

gold production from 1.7

million ounces to 2.3 million

over the next five years. But

it will give updated guidance

on the outlook for the

integrated company in the new

year. From the yellow metal to

the grey one

Steel has turned around last

year's losses posting a profit

this year of $126 million with

aggressive cost cutting helping the bottom line. But with iron

ore prices riding high, is the

company right to be so bullish

about the year ahead? Earlier I

spoke to the CEO Paul O'Malley.

Your results were given great

impetus by your Asian

operation. We spent a years trying to work out the

best way of being successful in

Asia and we're very happy with

both the improved earnings out

of Asia, well over $120 million

turnaround year on year and the sustainability of those

earnings at the moment. So it's

not been easy but we're geting

there. They were more than your

domestic operations. For the

first time ever the performance

out of Asia has been the performing segment for BlueScope. That's certainly a

record. And you believe that

the steel price has now

bottomed? Look the steel price

goes up and goes down. We've

over the last couple over the last couple of months

we have seen $100 a tonne drop

in our export business but it's

ticked up a bit in the last

week or so by about 20 to $40 a

tonne. So on that basis I think

it has bottomed for the

moment. What's if going to

take for steel prices to really

improve now? Because the

Chinese are very competitors as well as your customers, aren't they? China

represents the largest steel

industry in the world at the

moment. Global steel demand is

about 1.3 billion tonnes. Of

which half is produced and consumed in China but China

does a good job of keeping its

still sphrooel a production

perspective within China. If

you step outside of China and

look at the rest of the world,

we need a rebound in the

developed economies in Europe

and the US to see a sustained rally in steel-making Your guidance was pretty upbeat

but you talk about margins being squeezed and raw

materialses prices rising much

faster than steel prices. Isn't this this a concern going forward? Look, we see a

continued good performance out

of our Asian businesses, we

think we'll see the continued

benefit of our cost reduction

activities but there is no

doubt that we had a very good Q

4 because of margin expansion,

but I think we're seeing

margins squeezed in the first

quarter. And that's what we

talked about a bit did also announce that the

board had made a decision to

reinstate the dividend and I

think that takes a view that

the medium to long-term future looks reasonably looks reasonably good. If Labor do win in election and the minerals resources rent tax

comes in, presumably there's an

issue there for you because of

the knock-on effect of an

increase in iron ore prices? As

a company, we've seen our raw

material costs increase by a

factor of three over the last

five years. We spend around $2

billion a year in Australia now on iron ore coking comb and

other raw materials. As a steel

maker in Australia it's

fundamentally important that we

maintain our cost competitiveness relative to

international steel players so

we will be talking to whoever's

in government to ensure that they understand the importance

of BlueScope Steel being cost competitive. One of your new

strategies is to consider raw

material opportunities that

reduce your raw material cost

base. Presumably buying an iron

ore miner would be in the mix

tonnes of iron ore a year. At

$140 a tonne, that's a

billion-dollar spend. We billion-dollar spend. We have to look at ways through the

cycle of ensuring that we lower

that cost. We need to do what

we could to ensure that more mines are developed, more iron

ore gets to the market, better

access to infrastructure, and

in that involves some type of investment, we'll consider

that. But only if it delivers

us a lower cost of iron ore

through the cycle. And BHP

won't think much of that imagine? We have to do what's

in the best interests of

BlueScope and its

shareholders. OneSteel will be

reporting tomorrow. As a

potential investors, what's the attraction of BlueScope attraction of BlueScope over OneSteel, because they actually

own their own iron ore piner. We have an iron ore mine in our New Zealand steel

business. I will claim some

investment opportunity for

BlueScope shareholders as well.

We have a world class, world

scale steel works that produces really really good-quality product

product. In our Asian business

we have what we think is a

great growth platform to sell steel into the building and

construction markets of some of the of the fastest growing

regions into the world. We see opportunities

opportunities to take some of

that experience into other high

growth developing economies.

But we have to maintain our

cost competitiveness. That's our day job. Paul O'Malley,

thanks very much for talking to Lateline Business. Thanks for your time.

Lend Lease has returned to

profit but says conditions overseas are overseas are still challenging. Net profit at Australia's largest property developer came

in at $327 million on solid

earnings here and in Asia.

There were none of the

writedowns that contributed to

last year's $650 million loss.

Revenues were down, though. And

with overseas markets still

subdued, the company has been cutting cutting costs aggressively to

boost profits. For the rest of

the action on the local

markets, I spoke to Charlie

Aitken from Southern Cross

Aitken from Southern Cross

Equities. The market is softer

but is it as bad as it

seems? Interesting start to the

week. The market was down 21

points of which 11 points were

the Commonwealth Bank going ex-dividend. The broader market

only down 11 points. We had 80

stocks up, 12 flat and 100 down

in the ASX 200. An even split

there the stocks that reported

were all reasonable and a on the day. Not as bad as it looked. Woodside has announced

a gas find in Western

Australia. How significant is

that? The market thought it was

quite significant.

thought that the Pluto

expansion was lacking gas but obviously they've found

something significant here 400 kilometres

kilometres off Western Australia. The market put

Woodside shares up about 3.5,

4% on the fact that this gas

discovery was made. I think it

was quite significant for

Woodside. And the fast-growing telecommunications company iinet has released profit figures. You have to remember

that iinet shares are down

about 10 or 15% since Telstra the thousand pound gorilla in telecommunications decideed it would become more competitive

last week. But iinet, very good

numbers. And the market just

thought that the threat from

Telstra's probably a fair way

away. Speaking of Telstra, its

shares crept back up again.

Some respite for long suffering shareholders there, really? If

you can call 1 c refight. If

you drop a dead cat from a high

enough height, it bounces somewhat. But Telstra's are just seeing people die the

dividend. Stock goes ex-dividend on 23 August.

Unfortunately for Telstra

shareholders when that happens

we will be seeing lower

prices. I can't let you go

without following up on the

forecast you made last week.

How it the bumper week go? That

wasn't my best call. The market

lost 120 points. I thought Commonwealth Bank result and a

few other things. But strangely

enough, if you take out what

happened in American and here I

am covering up my bad forecast,

everything that was relevant to

Australia was pretty good. I thought the Commonwealth Bank

result was good. Iron ore price

went up to $150 a tonne. German

GDP on Friday night was up 9%.

Australian unemployment grew

23%. It was all the good news I

expected. Unfortunately we got sidetracked by the Federal

Reserve meeting. We'll see how

we go this optimistic for the Australian

equity market. That's a good

response. Thanks for joining us

again. To the other major

movers on the local share market:

Shopping centre owner Direct

Factory Outlets is reportedly

close to collapse, with a

consortium of banks refusing to

grant the company more credit and appointing insolvency

experts as advisers. An Apple with selling secrets to Asian suppliers of the tech giant in

exchange for at least $1

million in kickbacks. And a key European Central Bank official

says despite surging growth Germany, Europe's economic

recovery is still gradual. Now for a look at tomorrow's business diary.

A look at what's making business news in overseas

newspapers. The 'Wall Street

Journal' says China is on track

to overtake Japan as the

world's second biggest economy

this year. London's 'Financial

Times' says Hollywood is

thinking again about 3D films as a slew

That's all for tonight. You can watch Lateline Business Monday

to Thursday at 8.30 each night

on ABC News 24 as well as after

'Lateline' on ABC1. I'm Ticky

Fullerton. Thanks for watching.

Goodnight. Closed Captions by CSI

MAN: We were all granted about 10 days' leave for our final visit to our homes. This was around the middle of April 1944. So I went up to Luverne to see my parents and my brothers and sisters. It was a very difficult time because I knew, I had the orders in my possession

that would be sending me to the European Theatre of Operations and I knew that we'd been assigned to fight this terribly dangerous type of combat mission. So, when I was leaving, and saying goodbye to my mother and dad, we went to the train station in Luverne to catch the midnight train. My sister, Mavis, was with me and I took her aside and we walked down the platform for a whiz and I told her what my assignment had been. And that the odds were pretty great that I would be killed. So I had told her to be very much aware of this possibility and that she should be prepared to help my parents.

THEATRE MUSIC MOVIE NARRATOR: This immense piling up of war supplies in Britain is massed for the giant blow designed to knock out the Nazi.

An astounding panorama of everything that you can think of, and more. HEROIC MILITARY MUSIC Invasion shipping massed in British harbours along the English Channel. Barges and boats. Imagine those stacked-up amphibious craft

when they stream in swarms for the landing. Bombers which in the ground invasion, must keep on hammering. Gliders for air-borne troops. And myriad fighter planes for the monster air battles of the offensive designed to be the final phase of the European war. Acres of planes reaching far into the distance. SLOW JAZZ MUSIC

By the late spring of 1944, on both sides of the world, there were signs that the tide of war had begun to turn. The Allies had stopped Japan's expansion in the Pacific. They had taken Guadalcanal in the Solomons

and Tarawa in the Gilberts, had savaged the enemy fleet at Midway and had begun the long climb from island to island towards the Japanese homeland. In the European Theatre, the Allies had cleared North Africa of Axis forces

and taken Rome. Allied war planes were still bombing Germany night and day.

The battle of the Atlantic had been won.

The sea lanes were now open and men and weapons and supplies were flooding into Britain. And in the East, the Red Army had driven the Germans from the Ukraine and was moving into Poland. Back home, in places like Luverne, Minnesota,

Waterbury, Connecticut, Mobile, Alabama, and Sacramento, California,

Americans did their best to go about their normal lives. # Kiss me once, then kiss me twice Then kiss me once again # It's been a long, long time # Haven't felt like this, my dear # Since I can't remember when # It's been a long, long time But in the back of everyone's mind, hope was combined with dread. In spite of the progress that had been made, everything that had happened so far in the war had been a mere preliminary. The Japanese Empire had begun to shrink. But its rulers seemed determined to defend to the death every island that remained. Rome may have fallen. But everyone knew that Hitler's grip on Europe

could not be broken until Allied troops crossed the English Channel, smashed the German defences and drove the Nazis out of France. Hundreds of thousands of sons and fathers and husbands would be called upon to gamble their lives for the sake of victory. # You'll never know how many dreams I dreamed about you # Or just how empty they all seemed without you # So kiss me once... Naval ensign Joseph Vaghi of Bethel, Connecticut, just up the road from Waterbury, went home to say goodbye to his family that spring. He had his orders to go overseas and it seemed to him and to them that he would likely be one of those who'd be asked to run that terrible risk. MAN: It was very difficult because I had two other brothers already in the service and my poor mother, she knew all of us were going to go eventually and as it turned out, we all did go. All of us were in the service and that was kind of rough.

But leaving, she had her chin up, you know, we spoke in Italian. She spoke English very well but she said all the sentimental things in Italian. Said, (Speaks in Italian) And it was like that. MILITARISTIC TRUMPET MUSIC