Australian Agricultural CEO’s shock resignation, APA sells gas plant to Cooper Energy, and surging energy prices cause Boral pain
After more than four years as chief executive officer of Australian Agricultural Company, Hugh Killen has resigned.
Australian Agricultural Company (ASX: AAC) has announced its chief executive officer and managing director Hugh Killen will step down this week, effective immediately.
Mr Killon was appointed managing director and chief executive officer of the company in 2018 – steering the company through some of the worst droughts and floods it has ever seen.
However, Mr Killen believes now is the appropriate time to start a fresh leadership transition.
AAC company chairman Donald McGauchie said Mr Killon’s contributions to the organisation were significant.
He said as well as guiding the company through drought and floods, he navigated the impacts of COVID-19 and market fluctuations.
“He has focussed on delivering Australian Agricultural Company’s branded beef strategy, built a team encompassing the next generation of leadership and led the turnaround of the company’s performance.”
While the company kicks off its search for a new leader, the interim role will be held by the company’s chief operating officer Dave Harris.
APA
APA Group (ASX: APA) has announced the sale of its Orbost gas processing plant to Cooper Energy (ASX: COE) for US$228.9 million (A$330 million).
Australia’s biggest natural gas infrastructure business APA will receive A$210 million upfront with the remaining to be handed over as deferred payments.
APA chief executive officer and managing director Rob Wheals said the results of the plant should not go under appreciated.
“We have been very pleased with the recent performance of the plant and the exceptional work done by the APA team who have worked tirelessly to achieve ongoing performance improvements.”
Meanwhile, Cooper Energy’s managing director David Maxwell said the purchase of the plant in Victoria would be “transformative” for the company.
“It accelerates our strategic position in the Gippsland Basin and strengthens our end-to-end capability to produce, process and deliver gas to our high-quality domestic customers and the spot market,” he said.
“The acquisition represents the next step in Cooper Energy’s twin gas supply hub position and is underpinned by attractive market dynamics through the tightening southeast Australia gas supply.”
APA will carry on operating the plant until the plant’s Major Hazard Facility Licence (MHFL) is transferred to Cooper Energy, which could take up to 12 months.
Iluka Resources
lluka Resources (ASX: ILU) has announced the proposed demerger of Sierra Rutile – urging shareholders to back the plan.
The mineral sands miner and critical minerals developer has asked shareholders to get behind the demerger, suggesting it will pave the way for the creation of a standalone rare earths operation in WA.
Under the demerger, two separate ASX listed companies will be created: Iluka and Sierra Rutile.
Iluka directors said the demerger would be in the best interests of the shareholders and will deliver greater value to them over the course of time.
“In arriving at this view, the Iluka board has considered a range of alternatives, with the demerger providing a balance between the benefits of separating the business, and Iluka shareholders having the option to retain longer term exposure to its future development and growth,” the board stated.
Iluka will continue to be a leading global supplier of critical minerals such as rare earths, while Sierra Rutile will focus on producing mineral sands from its West African operations.
Boral
One of Australia’s top makers of construction materials, Boral (ASX: BLD) has cut back production due to a surge in energy prices across the country.
Sanctions on Russia have caused impacted energy prices to rocket across the globe as well.
Boral said “the speed and magnitude of the change in energy prices” was the main reason why the company felt the need to cut back its operations.
Boral chief executive officer Zlatko Todorcevski said there were no alternatives and the impact on customers was considered.
“We have been forced to temporarily curtail some areas of our operations and unfortunately have been left with no other option than to pass increases onto customers directly,” he said.
“We have also had to accelerate plans to review our overheads as we offset these inflationary challenges.”
Qantas
Qantas (ASX: QAN) and Airbus will spend nearly $290 million towards developing a sustainable aviation fuel industry in Australia through biofuels.
Compared to kerosene, biofuels cut greenhouse gas emissions by around 80% and Qantas is targeting 10% of sustainable fuels to make up its energy mix by 2030.
Qantas chief executive Alan Joyce said the transition is necessary to keep the country from falling behind other countries.
“Without swift action, Australia is at risk of being left behind,” he said.
“This investment will help kickstart a local biofuels industry in Australia and hopefully encourage additional investment from governments and other business, and build more momentum for the industry as a whole.”
The agreement, which was signed on Sunday between both parties, was agreed on for five years. It will encourage projects that are commercially viable and align with a strict set of criteria surrounding environmental sustainability.
Mr Joyce hopes that by driving down the cost of biofuels it will allow airfares to remain affordable to all customers.