Top 100 WA companies worth $132bn
15 years of Deloitte WA Index shows how mining has shaped the state
3 August 2015: The value of the top 100 Western Australian–based listed companies has grown by 290% - to $131.9bn – over the last 15 years according to the 15th anniversary edition of the Deloitte WA Index.
The professional services firm 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 2015 financial year.
The anniversary edition confirms, and acknowledges, the significant role the mining industry has played in the growth of the WA economy over this period, highlights the highs and lows over 15 years, looks at potential opportunities and threats expected to emerge in coming years, and shines a spotlight on the top mining companies defined by market capitalisation.
Deloitte Clients and Markets Partner, Western Australia, Tim Richards said: “Despite some of the challenges faced in the WA economy over the past 15 years, market capitalisation growth of our top companies as demonstrated by the Deloitte WA Index has been phenomenal.”
“When we started out in June 2000, the combined market capitalisation of WA’s top 100 companies was $34.0bn. Today, that figure sits at $131.9bn, an extraordinary result compared to the general performance of equity markets, both locally and globally.
“On the resources front, the top 10 WA resource companies dominated then and dominate now, accounting for 40.0%, or $13.6bn, of the total market capitalisation of the Deloitte WA Index in June 2000, compared to 41.4%, or $54.6bn, at the end of June 2015.”
“This outstanding growth aside, FY15 has still been a challenging year. The Index shed 11.6%, driven by an overall slowdown in WA’s mining sector and led by unfavourable movements in commodity prices.”
“Significantly, the Index would have lost more ground if not for the listing of South32 in May which, at the time added $11.3bn, or 8.4%, to the market capitalisation of the top 100.”
“This was the single largest addition to the Index in recent years, and a significant vote of confidence in WA as a global resources centre.”
Overall, commodity prices had a disappointing FY15, largely due to the supply glut in global commodity markets as production of iron ore and crude oil, for example, continued to surpass demand.
The price of iron ore spiralled downward by 36.8% over the past 12 months to hit a 10-year low, trading at less than US$50/tonne, which weighed on the pure-play miners such as Fortescue Metals Group and Atlas Iron, both of which experienced falls in market capitalisation of 56.1% and 80.9% respectively.
Notably among the resources companies, Northern Star Resources and Sirius Resources bucked the trend. Northern Star increased its market capitalisation by 79.5% on the back of the resource expansion, and operational efficiency at its newly acquired WA assets. Sirius Resources’ acquisition by Independence Group in May 2015 saw its market capitalisation increase by 26.2%.
In the energy sector, Liquefied Natural Gas increased its market capitalisation by 100% as it continues to build its pipeline of mid-scale LNG projects in Australia, Canada and the United States.
Of all the commodities surveyed, crude oil prices were heaviest hit over the past 12 months, with the US shale gas boom lifting production dramatically, while OPEC maintained its production levels. Conversely, uranium was the top performer in FY15, increasing by 29.2% thanks to a rebound in demand from the Asian region.
Improvement in the US economy and appreciation of US dollar drew funds away from commodities, spurring investment in global equity markets and other industrial and financial sectors. This boosted the performance of the All Ordinaries which increased by 1.3% in FY15. The US S&P 500 and the Nikkei also increased, by 5.2% and 33.5% respectively, while the FTSE 100 decreased by 3.3%.
The Deloitte WA Index also acknowledges FY15 top performers that represent the current and immediate reshaping of the Index – Northern Star Resources and Independence Group – as well as one with the potential to reshape it in the future – Gold Road Resources.
The anniversary edition of the Deloitte WA Index also takes a closer look at South32, the miners in the top 15 companies by market capitalisation and a number of emerging economic and business issues:
- The emergence of South32. The listing of South32 is one of the most significant events in the recent history of the Deloitte WA Index, and certainly has reshaped the Index. In this article we take a look at South32, its operations, and what the company stands for.
- The future of mining: The innovation imperative. We consider innovation in light of the ongoing challenges faced by the industry, and the fact that companies are being forced to reshape their strategies and reconsider their focus in order to continue to deliver attractive returns and achieve sustainable growth
- Future workforce in mining. Mining companies are looking for new ways to best position their workforces in a demanding and changing environment. We explore the ideas of simplicity, diversity and an optimised organisational design, which could lead to safer, more productive and efficient operations.
Deloitte at Diggers & Dealers
The Deloitte team, and copies of the full Deloitte WA Index 15th anniversary report, will be available at the Deloitte booth (8) at Diggers & Dealers.
Deloitte is also hosting an event on the evening of Monday 3 August to celebrate this year’s award winners. Guests will have the opportunity to network with industry friends and take part in some interactive team games. For further information: http://www.deloitte.com/au/diggers2015
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