Company Gross Profits QoQ

Company Gross Profits QoQ is the quarterly percent change in underlying production profits for private Australian businesses, not before-tax or after-tax profit. It is published in Business Indicators, Australia in current prices only. It covers private businesses on the ABS Business Register. It uses a stratified sample of about 12,750 businesses grouped by industry, state and size, with large firms always included.

It excludes the public sector, micro non-employing businesses, Agriculture, Forestry and Fishing, General Government, Life Insurance, Superannuation Funds and private households employing staff. Profits of firms with fewer than 20 employees are estimated from sales ratios. It is not the National Accounts surplus, the wider official gauge, and it has no threshold: positive means expansion and negative means contraction.

Responses cover 1 financial quarter at a time and are completed during the 8 to 9 weeks after the quarter ends. Results are generally released on the 1st Monday of the 3rd month after the quarter, at 11:30am Canberra time. Each release also publishes wages and salaries, sales, inventories, industry splits, original, seasonally adjusted and trend, meaning smoothed direction, figures plus ratios and tables. New-quarter figures revise when reports replace estimates for missing replies, plus seasonal, trend, base-year and provision updates.

No fixed weights exist: the total sums profits across industries, shares shift each quarter, and Mining, the largest driver, swings most.

• Mining: captures resource profits and swings with commodity prices.
• Manufacturing: captures core goods-making profits.
• Wholesale and retail trade with accommodation and food services: captures reseller, shop, lodging and food-service profits.
• Utilities, construction, transport and communications: captures power, gas, water, waste, building, freight and telecom profits.
• Professional, administrative, rental and auxiliary finance services: captures expert, support, property and finance-support profits, the only finance part in scope.
• Arts, recreation and other services: captures leisure and personal-service profits.

The September 4, 2023 release for the June 2023 quarter showed seasonally adjusted profits down 13.1% on the quarter. They fell 11.8% on the year to $131,517m from $151,403m. Mining led the fall, down 21.3% to $59,495m from $75,558m.

Mining wages still rose 2.6% and total wages rose 1.8% to $179,934m from $176,727m, while inventories fell 1.9%. The Inventories Valuation Adjustment (IVA) was -$857m after +$1,385m, with no such fix applied to CGOP.

So Mining can whipsaw the total, quarterly and yearly moves can oppose after a boom, and CGOP will not match National Accounts surplus moves. In the December 4, 2023 release for the September 2023 quarter, profits fell a further 1.3% to $131,103m. Mining fell a further 7.7% to $54,873m while wages rose 2.7% in the same pattern.

1. Collect profits before income tax: QBIS web forms collect income, expenses and profits from firms with 20 or more employees. Smaller firms are estimated from sales ratios, missing replies are filled with estimates and replaced when reports arrive.
2. Strip to underlying profit: deduct depreciation and amortisation (wear), net interest, currency gains or losses, asset-sale gains or losses and unrealised revaluation gains or losses.
3. Adjust for seasons and trend: apply concurrent seasonal adjustment (fresh factors each quarter) and smooth with a 7-term Henderson average. Use ARIMA modelling where appropriate.
4. Compute the headline: divide the change by the prior quarter and multiply by 100 on seasonally adjusted current-price profits; yearly change is also shown.
5. Worked illustration: For illustration, take $100m profits before tax. Deduct $15m depreciation and amortisation, $5m net interest, a $2m currency gain, a $3m revaluation gain and a $1m asset-sale gain to give $74m. If the prior quarter gave $70m, the reading is (74 minus 70) divided by 70 times 100, or +5.7% QoQ.