I still call Australia home, really. Westfield’s Frank Lowy wants to bring the soccer World Cup to Australia. Is that to thank Australia for underwriting the health of his group during the GFC? Lowy’s huge investments in British and American retailing (plus a bit in New Zealand) tanked in the slump, especially America, and at one stage threatened to damage the company — perhaps beyond repair. Lowy owes a lot to the Rudd government for the stimulus spending (and for bankrolling his World Cup ambitions); the Reserve Bank (where he sits as a board member) for low interest rates; local investors for taking up billions of dollars in new shares in the past two years; Australian shopkeepers in his 44 malls (for wearing rent rises when returns from the US, UK and NZ were falling); and local consumers for paying Westfield prices. The details are in the Westfield 2009 results, out this morning, but not without a fudge in the case of sales performance at the company’s eight UK malls …

Spot the Westfield fudge. Here are the key phrases: “For the year, comparable shopping centre net operating income for the portfolio grew by 1.6%, with the Australian and New Zealand portfolios growing by 5.9%, the United States portfolio declining 3.9% and the United Kingdom portfolio declining 4.2%. The 44 malls in Australia are almost fully leased (99.5%), US, and UK malls (the rest of the 119) had lower levels: America was around 93%. For 2009, comparable specialty retail sales for the group’s centres in Australia grew by 3.3%; in New Zealand by 0.4% and in the United States declined by 9.5%. In the United Kingdom, industry statistics show comparable retail sales for 2009 were up 1.5% nationally with London growing by 5.2%.” That’s the Westfield fudge, because the details of the report show UK comparable sales were down 2.2%, which is a lot worse than the rises implied by the company’s comments. But Australia’s role was vital …

A Westfield rip. Australia held the whole Lowy shebang aloft in 2009: operating income here grew by more than three times the group increase of 1.6%, much faster than inflation and much faster than sales growth for 2009. You can forget NZ; it’s lumped in there to make Australia look smaller than it actually was. If there had been slower growth in Australia, or no growth, Westfield would have been forced to report a fall in earnings. That can be seen from the sales growth: Australia, 3.3%, NZ, 0.4%. That’s just specialty stores and doesn’t include the likes of Woolies, Coles, David Jones and Myer. Westfield is thought to use those as loss leaders because they pay low rents for 15-20 years. According to the Australian Bureau of Statistics, retail sales in December 2009 were 3% above those in December 2008. That’s all retailers, large and small. Now what was that story about European tax havens and Frank Lowy again? Lichtenstein, wasn’t it…?

Beware of Greeks meeting deadlines. European finance ministers have given Greece a month to do better with its cutting. The new deadline (and who wants to bet that’s a flexible thing?) is March 16. The deadline gave heart to markets and we all had a great day: trading bonds, commodities, shares, selling off the US dollar and buying the Aussie and anything else with a smidge of risk. In defence of the existing reduction package, Greek finance minister George Papaconstantinou claimed the target (getting the deficit down from 12.7% of GDP to 3% by 2012) was credible because his country was due to receive about 16 billion euros ($US21.7 billion) in EU structural funds over the next three years and an economic recovery, founded on shipping and tourism, was expected to kick in from the second half of this year.

What’s Greek for fudge? EU! Greece is going to use more than $US21 billion of EU funds over the next three years to help it cut its budget deficit (that’s assuming Greece hasn’t used Goldman Sachs to securitise some of it already). Now this money has always been due to arrive, but it relieves the Greeks of the need to cut that much from the budget. Now here’s the real crunch: Greece has to find about €20 billion in April and May to redeem various bits of debt. No one will roll it over, unless there’s some sort of support from the EC. Not surprisingly, that’s the best guess for the bailout package, plus the extra $21 billion in grants. The Great Greek Fiddle goes on.

China light. China has lost its taste for US Treasury bonds, again selling in December, for the fifth month in a row and allowing Japan to resume the top spot in the list of holders of American government debt. The US Treasury figures China’s bond holdings dropped to $US755.4 billion in December, from $US789.6 billion in November. Japan’s holdings rose to $US768.8 billion from $US757.3 billion. China had become No.1 from Japan in September 2008. The report shows China has now been a net seller of some $US45 billion of US, mostly at the short-term securities. Britain is the third biggest holder of US Treasury bonds, worth $US302.5 billion in December, rising from $US277.6 billion in November.

Are these events unconnected? Yesterday, small resources sector engineer and constructor WDS revealed that CEO Gareth Mann was CEO no longer after resigning “effective immediately”. That was after the company told the ASX: “WDS advises that the results for January are $1.5 million (NPAT) less than anticipated under its guidance given to the market on 2nd February 2010, attributable to its Oil & Gas business, and the Board has instructed the new CEO, CFO and COO to undertake a detailed review of the business, up to June 2010 and for the 12 months beyond, with a view to determining the extent to which the previous guidance needs to be restated.” In other words, we don’t know what happened. In October, WDS said: “It is now expected that the FY10 NPAT will be in the range of $22 million-$24 million compared with the reported FY09 NPAT of $20.3 million. WDS notes that this may be lower than market consensus FY10 NPAT level (circa $26 million excluding Titeline acquisition) as that consensus will not have taken the new information into account.”  On February 2, it reported: “The revised FY10 guidance is for EBITDA of approximately $31 million and NPAT of approximately $7 million.” Yesterday it reported: “WDS expects to report results that are materially different to our previous October market update. The unaudited 1HFY10 results inclusive of Titeline are an EBITDA of $9.9 million and break even at the NPAT level.” In other words, a projected net profit blast October of $20.3 million has evaporated.

Kerry not so stoked #2. While West Australian Newspapers cut its dividend, National Hire, controlled by Kerry Stokes’ private company Westrac, isn’t paying one after reporting a sharp fall in first-half profit. While the guidance was given at the 2009 AGM, the result isn’t great. Net profit fell to just $2.8 million for the December half, down from $15.3 million for the previous corresponding period. The company said the decline was due mainly to the reduction in the share of profit from equity accounted investments, including Coates Hire, which was down to $1.9 million from $12.3 million in the previous corresponding period. Coates Hire’s result was impacted by a 19% drop in revenue, and losses incurred through the divestment of the Allied business. Tutt Bryant, which is in the same business, reported a poor result earlier in the week.