UPDATE 2-Australia's Asciano, suitor report weaker sales as commodities downturn bites

Tue Feb 23, 2016 10:24pm EST
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* Asciano, Qube both report H1 lower revenue on commodities rout

* Qube says still in talks with Brookfield in joint Asciano bid (Releads to include Qube results, adds shares, comments)

By Byron Kaye

SYDNEY, Feb 24 (Reuters) - Australian freight giant Asciano and the smaller rival trying to buy it for A$9 billion ($6.5 billion) both posted lower first half sales on Wednesday, strengthening the case for consolidation in a sector hammered by a commodities rout.

A day after revealing that its two long-standing suitors were now weighing a joint tilt, Asciano reported a 4.3 percent drop in revenue for the period, while net profit rose 5.3 percent due to cost cutting.

Suitor and cargo handler Qube Holdings Ltd also said sales fell 3.7 percent for the six months to Dec. 31 while profit eased just 1.7 percent, also as a result of reduced overheads.

Qube was vying with Canadian infrastructure fund Brookfield Asset Management to buy Asciano, which revealed on Tuesday that the two companies were now weighing a joint bid to end the fiercest takeover battle currently being waged in the Asia Pacific.

The results of both Qube and Asciano underscore the downturn in global commodities demand which has hit Australia's resource-reliant economy, and how companies must now rely on consolidation and cost-cutting to survive.

The iron ore industry has particularly suffered as main customer China cut back on purchases, resulting in shuttered mines and constrained haulage volumes for logistics companies.   Continued...