Reporting season live updates: All the latest news from the ASX as companies deliver their financial reports
We’re now four days into the first big week of reporting season and most major companies have managed to either meet expectations or surprise to the upside.
No mean feat in this environment of higher-for-longer interest rates, sticky inflation and subdued consumer sentiment.
Commonwealth Bank’s profit may have slipped yesterday but it still delivered a profit of $9.5 billion for the full year and showered mum-and-dad investors with a record dividend. Cold comfort for those struggling to repay their mortgage to Australia’s biggest bank but great news for self-funded retirees raking in more monster payouts from a steady earner.
Today we’ll get a steer on how local mining contractors are managing to negotiate rising wage and inflation costs amid a booming WA resources sector when market mainstay NRW Holdings reports.
The company has been riding a wave of renewed investor optimism of late, despite a flurry of acquisitions over recent years that had left some scratching their heads - particularly when measured against CEO Jules Pemberton’s sky-high salary.
Side note, in November last year NRW’s remuneration report copped an extraordinary sixth consecutive pay strike - with almost 60 per cent of proxies objecting to executive pay packets ... and that was despite a record financial year. Ouch.
It was an achievement almost unheard of in the modern corporate landscape. Can NRW win over the naysayers today?
Also reporting their financial dirty laundry today will be market majors Telstra and Cochlear, along with Magellan Financial Group, Treasury Wine Estates and Arena REIT.
Let’s dive in ...
Santos ‘best placed’ as oil and gas reports loom
Barrenjoey reckons earnings are less likely to be a focus when Australia’s oil and gas players gear up for results in the coming weeks.
Instead, getting on top of operational issues and delivering growth are likely to underpin investment themes for the likes of Woodside, Santos, Karoon Energy and Cooper Energy, Barrenjoey said in a note.
“To this extent, we see STO as best placed for reporting season,” the note from Dale Koenders and April Lowis read.
They said Woodside meanwhile was in need of “rebuilding trust, and providing dividend certainity”. The company has lined up deals to buy the proposed Driftwood project and OCI Clean Ammonia project.
“Over the last month, WDS’s share price is also down >15 per cent as shareholders vote with their feet,” theys said.
“Clearly investors were wanting increased returns over M&A, in line with management’s prior comments on peak capex in 2023/24 and that returns would increase after.”
Japan’s economy bounces back
Japan’s economy has expanded by a much faster-than-expected annualised 3.1 per cent in the second quarter, rebounding from a slump at the start of the year thanks to a strong rise in consumption and backing the case for another near-term interest rate hike.
The Bank of Japan had forecast that a solid economic recovery will help inflation sustainably hit its 2 per cent target, and justify raising interest rates further after it hiked them last month in its continued quest to exit years of massive monetary stimulus.
The increase in gross domestic product (GDP) compared with a median market forecast for a 2.1 per cent gain, and followed an upwardly revised 2.3 per cent contraction in the first quarter, government data showed on Thursday.
The reading translates into a quarterly rise of 0.8 per cent, beating a 0.5 per cent increase expected by economists in the Reuters’ poll.
$340m contract wins for Monadelphous
Monadelphous has booked in another $340 million worth of work.
The contractor revealed to the market today it had picked up new construction contracts in the iron ore and renewable energy sectors.
In iron ore, the company’s engineering, procurement and construction joint venture with Lycopodium - Mondium - has been awarded a design and construct contract by Rio Tinto for a new sampling facility at a Pilbara port. Work is expected to be completed in mid-2026.
Monadelphous has also been awarded a construction contract by BHP’s WA Iron Ore unit, with the dewatering of surplus water from its Newman mining area. Work is expected to be completed in the second half of 2025.
Meanwhile, Zenviron - its renewable energy joint venture with ZEM Energy - has secured a contract with Queensland Government body CS Energy for the delivery of the Lotus Creek Wind Farm in Central Queensland.
In partnership with Vestas, Zenviron will deliver the balance-of-plant civil and electrical works along with the workers’ accommodation facility, with Vestas supplying and installing the wind turbines.
Work will commence immediately, with completion expected by the end of 2027.
Aussie bond yields hit 13-month low on bets RBA will break
Australia’s bond yields dropped to a 13-month low amid growing speculation that the nation’s Reserve Bank is inching closer to the start of interest rate cuts.
The benchmark 10-year yield fell as much as five basis points to 3.88 per cent, the lowest since July 2023. The policy-sensitive three-year yield also declined five basis points.
Bond investors are shrugging off a relatively hawkish stance from the Reserve Bank of Australia, at least compared to peers. The central bank kept interest rates at a 12-year high earlier this month and ruled out a rate cut in the next six months, splitting with global counterparts as it waits for inflation to abate.
Bets on RBA easing mounted after slowing inflation allowed the Reserve Bank of New Zealand to lower the official cash rate on Wednesday. Expectations that the Federal Reserve will slash interest rates as soon as next month also opened up the room for other major countries to loosen policies.
“Investors are reading through to Australia a combination of the RBNZ’s more-dovish-than-expected turn yesterday, the softer inflation data in the US,” said Kenneth Crompton, senior fixed income strategist at National Australia Bank in Sydney.
Now, investors’ focus is shifting to Australia’s jobs report due later Thursday to see if the labor market has loosened, a move that may also potentially boost the case for a rate cut.
Overnight-indexed swaps indicated that the RBA will embark on a series of rate reductions in December.
Bloomberg
ASX200’s agonisingly slow steps forward
A deep slump in one sector has not been deep enough to drag the market into the red.
Utilities dived 3.6 per cent shortly after the open but gains among financial, telco, IT and consumer stocks helped the ASX200 keep its head above water.
The index was just 3.5 points (0.05 per cent) higher at 7860.
Fortescue continued its fall after yesterday shedding 4.6 per cent as the price of iron ore remained below $US100 a tonne and the world’s biggest steel maker, China’s Baowu, warned of a long cold “winter” to come for the industry.
Andrew Forrest’s company was down a further 2.5 per cent to $16.88. It is now down moe than 40 per cent since the start of the year.
BHP lost another 2 per cent to $38.80 but Rio led the retreat, down 3.6 per cent to $108.37.
Loal contractor NRW’s shares soared 10 per cent on a record profit and revenue result and Telstra was up 2.8 per cent despite delivering a 13 per cent fall in profit for the full year.
Pilbara Minerals dropped 4.7 per cent after announcing a $560 million deal to snap up WA-based Latin Resources and its flagship lithium project in Brazil, which is still in the definitive feasibility study phase.
Treasury Wine profit slumps on writedowns
Australia’s biggest wine producer has posted mixed full-year results, with a significant 60 per cent slump in profit to $98.8 million due to non-cash impairment charges flagged earlier this month.
But Treasury Wine Estates — behind brands including Penfolds, Squealing Pig and Pepperjack — on Thursday revealed earnings before interest and tax lifted 12.8 per cent to $658.1m.
That was driven by strong luxury portfolio growth in Penfolds and Treasury Americas, as well as contributions from the recently acquired Californian wine operation DAOU Vineyards.
Date set for APM takeover vote
Embattled APM has set a date for shareholders to vote on a $1.45-a-share takeover bid from major private equity backer Madison Dearborn Capital Partners.
Scheduling of the September 18 meeting comes after independent experts Kroll Australia today declared the $1.33b offer “fair and reasonable” after assessed the value of APM shares between a range of $1.40 and $1.74.
A scheme booklet is due to be sent to shareholders on August 19.
The takeover is considered a cetainty, with APM founder and executive chair Megan Wynne — along with her Perth IVF specialist husband Bruce Bellinge — controlling about 34 per cent of the register and already stating she will sell into the buyout.
Madison Dearborn has a 30 pe rcent stake and institution investors have a handle on another 20 per cent of the stock.
The Michael Anghie-led human services provider last month confirmed a staggering slump in full-year earnings and profit, with both key measures set to just scrape into already-downgraded guidance ranges.
Origin profit spikes on higher prices
Power giant Origin Energy has posted a surge in full-year profit as households struggle to pay bigger electricity and gas bills.
Origin, one of the largest suppliers to the east coast domestic gas market, on Thursday reported a net profit of $1.397 billion for the year to June 30, up from $1.055 billion a year earlier.
Chief executive Frank Calabria said the balance sheet remains strong, with good cash generation supporting an increase in returns to shareholders and enabling capital to be reinvested into renewables and energy storage.
Origin forecast higher electricity demand on electrification, uptake of electric vehicles and the expansion of data centres.
Read the full story here ...
Gold declines as investors weigh scope of US monetary path
Gold erased an earlier gain after US data showed inflation eased in July, keeping the Federal Reserve on track to lower interest rates next month.
Bullion slipped as much as 0.9 per cent overnight Wednesday, though it’s still trading near the record high reached last month. While the US core consumer price index - which excludes food energy costs - rose on an annual basis, it was still the slowest pace since early 2021, the figures showed.
“Fed cuts were already priced into the markets - it’s just a question now of by how much,” said Rhona O’Connell, an analyst at StoneX. “There is probably a touch of profit taking going on here, with short-term moves belying the longer-term fundamentals.”
Gold is up 19 per cent this year, bolstered by mounting optimism on monetary easing and purchases by central banks. Lower interest rates are typically bullish for gold, which doesn’t pay any interest. Bullion’s appeal as a haven asset has also been boosted by tensions in the Middle East and Russia’s war with Ukraine.
Spot gold declined to $US2443.29 an ounce by early morning WA time. The Bloomberg Dollar Spot Index edged lower. Silver, platinum and palladium dropped.
Bloomberg
NRW delivers another record year
Civil and mining contractor NRW has turned in a record set of results, with revenue for the full year up 9 per cent to $2.9 billion and profit rising nearly 19 per cent to $123.8 million
It will pay out a fully franked final dividend of 9c a share, taking the year’s total distrubution to 15.5c - up 11 per cent on the previous year.
MD Jules Pemberton said another set of record figures reflected the strength of the different markets and sectors in which NRW operates across Australia and North America.
“More importantly, our EBITDA reached $334.8m, up 15.9 per cent, and our EBITA rose to a record $195.1m, a significant 17.4 per cent increase from FY23,” he said.
NRW said its pipeline of work stands at $5.5b, which is either in the order book or is expected as repeat business, noting “the outlook remains very positive”.
It is tipping revenue this financial year of $3.1b and before-tax earnings to increase to between $205m and $215m.
“Our record performance in FY24 ... is the third year of consecutive earnings growth post the COVID-impacted FY21 year,” Mr Pemberton said.
“Together with an order book of $5.5b, of which circa $2.9b will be delivered in FY25, and active tenders of $5.5b, I have great confidence in the group’s future performance and growth potential.”
Originally published on The West Australian
