ASX reporting season: Mineral Resources’ Chris Ellison fronts analysts, media after huge loss shocker
Things have gone from bad to worse (and even worse) for WA mining magnate Chris Ellison.
Not only has he just been forced to pay back a whopping $3.8 million to Mineral Resources - the company he founded - over a tax dodge scandal that engulfed the lithium and iron ore major last year - but yesterday it was reported the $6.7b giant had booked a sensational $807 million net loss for the first half.
Lithium price carnage and the adverse effect of a strong US dollar on its huge debt pile were to blame for the carnage.
Damage caused to its troubled Onslow Iron haul road by a deluge has also whacked production guidance from its most important mining operation.
The reaction from investors was swift - and brutal. The company’s stock fell 17.6 per cent to $25.14 by 12.20pm — the lowest point since October 2020.
Ellison and CFO Mark Wilson fronted analysts and media this morning to talk through the results ... and face another barrage of questions over corporate governance and the CEO future role at MinRes.
You can read what happened in the feed below.
Key Events
Sandwich wars: RFG to bring Firehouse Subs to Australia
Listed Retail Food Group will bring US-based Firehouse Subs to Australia as it muscles its way into the growing $1.7 billion sandwich category.
The move announced on Wednesday pits the brand directly against Subway, which currently dominates the sub-style sandwich sector.
Already behind the Crust pizza chain and eateries Donut King and Gloria Jean’s, RFG said it planned to open 165 Firehouse Subs stores over the next 10 years. The first store is set to be opened in south east Queensland later this year.
The announcement came as RFG revealed net profit grew 74 per cent to $7.3 million in the first half of the financial year. Revenue rose 20.1 per cent to $69.6m.
“Firehouse Subs is a key pillar of our ambitious growth strategy and we are confident consumers will be excited by the brand’s high-quality sandwich product together with an excellent guest experience,” RFG chief executive Matt Marshall said.
What will Ellison have to say?
Chris Ellison is about 45 minutes away from fronting market analysist on a call after yesterday’s disasterous results for Mineral Resources.
Shares in MinRes on Wednesday morning plumbed depths not seen since November 2020, shedding 10 per cent to $27.46 by 8am. It also retreated 5.8 per cent on Tuesday.
MinRes, after market close on Tuesday, posted its financial results for the final six months of 2024 — revealing an $807 million net loss. This compared to a $530 million net profit after tax for the same period a year prior.
Read more here
Vicinity profit rises despite ‘flat’ retail environment
Shopping centre giant Vicinity Centres says net profit grew $270 million in the half-year in what it says was a relatively flat retail environment.
Vicinity - which owns Lakeside Joondalup, Morley Galleria and DFO Perth - revealed net profit in the six months to the end of December hit $492.6m, up from the $223.5m recorded a year ago.
Funds from operations, the property sector’s preferred measure for earnings, was stable at $344.1m.
“Having anticipated a relatively flat retail sales environment, we have been pleased with the continued resilience of our retail centres, especially in the context of a more challenged consumer environment more broadly,” the company said.
Vicinity said it had completed the integration of Lakeside Joondalup, which was acquired last August.
It reaffirmed its full-year earnings guidance, with FFO and adjusted FFO per security expected to be within the range of 14.5-14.8¢ and 12.3-12.6¢, respectively.
Easing construction costs build Cedar Woods profit
Falling construction costs and elevated sales have helped fuel a profit surge at residential developer Cedar Woods Properties, which is tipping a minimum 10 per cent increase in full-year earnings.
Cedar Woods said net profit for the first half jumped to $15 million from $2.8m previously as revenue leapt to $195.9m from $123.2m, helped by record pre-sales in the six-month period.
The interim dividend was increased to a fully franked 10c a share from 8c.
“Cedar Woods has seen a much improved first half and is expecting an even stronger second half based on forecast revenue,” chief executive Nathan Blackburne said.
“We remain on track to deliver a minimum 10 per cent uplift in the 2025 financial year, with second-half settlements largely derisked by pre-sales,” he said.
At the end of the year, pre-sales stood at an all-time peak of $624m. First-half gross sales were recorded at $732m, including $402m in the second quarter.
Cedar Woods shares were 2.2 per cent higher at $5.55 as at 7.50am.
Schaffer to shift gear in second half
Car leather and building materials group Schaffer Corporation expects a better second half for its key business after lifting interim profit.
Schaffer’s net earnings for the six months to December 31 jumped to $12.7 million from $8.8m, thanks to its Delta building materials business and unrealised gains on its investment portfolio.
The profit gain was despite flat revenue of $112.13m and a subdued earnings performance by its European-based car leather business, which services some of the world’s biggest luxury car brands.
Family-controlled Schaffer is tipping a better second half for the car leather division, which provides the lion’s shares of group revenue, but warned the global economic environment is showing signs of slowing.
Directors held the interim dividend steady at 45c a share
Lycopodium cuts dividend on 16 per cent profit fall
Construction engineer Lycopodium has slashed its dividend after a 16 per cent fall in first-half net profit to $25.2 million.
The group said today its directors had declared a fully franked interim dividend of 10c a share, down from the previous year’s bumper payout of 37c.
Revenue for the six months to December 31 was off 6 per cent at $167.4m.
Lycopodium has forecast full-year revenue of between $320m and $340m, with profit expected to come in between $37m and $43m, well down on the $50.7m profit recorded for the 2024 financial year.
Iluka profit sinks 33 per cent
Iluka Resources has reported a 33 per cent fall in net profit for the full year to the end of December, blaming “persistent inflation, subdued market conditions and ongoing geopolitical volatility” that “again affected our financial performance”.
The mineral sands miner today reported that reveue fell 9 per cent to $1.13 billion. Earnings before interest, tax, depreciation and amortisation dropped 18 per cent to $477m.
“Inflation in Australia was persistent throughout the year, which impacted our cost environment,” said manging director Tom O’Leary.
“By electing to run our mines at capacity, we optimised unit costs and maintained Iluka’s ability to service the premium zircon market, where demand is stronger.”
It declared a 4c-a-share final dividend, taking the full-yeat payout to 8c.
Iluka noted heighed geopolitical teniosn but said its $1.8b rare earth plant taking shape at Eneabba putit at the forefront of maintining crucial supplies.
“2024 saw over 3.5 billion people – nearly half the world’s population – take part in democratic elections, with a notable shift in political leadership in some key markets,” it said in its annual report.
“International fragmentation, combined with the possibility of some reconfiguration in trade flows, has heightened the imperative of governments to derisk reliance on any single country for the supply of critical minerals.
“Iluka is at the forefront of this megatrend through its development of an Australian rare earths industry in partnership with the Australian Government.”
Margin growth delivers Emeco bumper profit
Emeco has lifted net profit a stunning 73 per cent off the back of strong earnings and margin growth in the first half of the financial year.
The mining equipment supplier this morning reported group revenue of $387.3 million, up 11 per cent from the same period a year ago.
Statutory net profit hit $33.6m, compared to the previous first half of $19.4m.
No dividened was declared.
Managing director Ian Testrow said Emeco’s reset business model “has proven its resilience”.
“We have delivered a strong half with growth in earnings and margins,” he said.
“Following the reset of our business model in FY24, we are focused on our core capability and building on our competitive strengths - providing world-class equipment rental and onsite and offsite rebuild and maintenance services.
“This has enabled us to deliver improved cashflow and returns on our invested capital during the half.”
Mr Testrow said contract extension negotiations with long-term customers were well progressed and “we are well positioned to secure equipment redeployments with a solid pipeline of opportunities”.
But he warned Queensland floods and WA cyclone activity may continue to impact use and timing of pipeline opportunities.
EBITDA and EBIT margin increased from 32 per cent to 38 per cent and from 14 per cent to 18 per cent, respectively.
Rental revenue of $300m was up 13 per cent, driven by surface coal and underground base metal growth projects.
Surface equipment use averaged 85 per cent for the period whilst underground equipment useaveraged 50 per cent.
NAB profit down, business lender heats up
National Australia Bank’s earnings declined in its first quarter as margins and higher credit impairments at the nation’s biggest business lender weighed on profitability.
The lender reported unaudited net profit of $1.7 billion in the three months to the end of December 31 it revealed today.
Slower lending to businesses - traditionally NAB’s strong suit versus its closest peers - reflects how intense competition among Australia’s largest banks for home loans is spilling over to business loans as the economy’s outlook deteriorates.
“The economic outlook is improving but cost of living and interest rate challenges persisted” during the quarter, chief rxecutive Officer Andrew Irvine said.
Australia’s largest lender Commonwealth Bank of Australia grew its business loan book 11 per cent in December while NAB grew 7 per cent in a market that expanded 9 per cent, Bloomberg Intelligence wrote in a report.
