Home

RECAP: News and analysis from ASX companies reporting earnings season results today

The West Australian
CommentsComments
As other metals wilt in the past few months on concerns of slowing growth, lithium is holding up.
Camera IconAs other metals wilt in the past few months on concerns of slowing growth, lithium is holding up. Credit: Supplied/Getty Images

Well, Friday is drawing to a close and so is our live blog for this week! Thanks for coming along for the ride.

For those of you who didn’t follow along, here’s what you missed …

SQM – which is partnering with Wesfarmers on the Covalent joint venture near Southern Cross – has projected at least a 35 per cent jump in demand for lithium this year.

WA mining company Newcrest became the latest to warn of higher labour costs amid a near 50-year low in the jobless rate, with its net profit plunging 25 per cent to $872 million, down from $1.16 billion a year earlier.

There were no real surprises with AGL Energy, which posted an expected fall in full-year underlying earnings amid “unprecedented” market volatility and suspension, while UBS analysts said royalties shone through last financial year for Iluka spin-off Deterra thanks to BHPs Mining Area C.

In not the best start to a potential deal, takeover target MACA rejected claims that NRW Holdings “superior” $375m counter offer was given short shrift. Gold Road Resources also hosed down expectations of a takeover bid for De Grey Mining despite increasing its stake in the Pilbara gold player to 19.99 per cent.

Perth-based internet services provider Pentanet said a 54 per cent jump in revenue to $16.8m helped improve its financial results in the year to June 30.

And gas pipeline company APA Group apologised to its staff after paying them $32m over seven years.

Join us again on Monday for earnings reports from companies including Star Entertainment Group, Adairs, Ampol, LendLease, and Southern Cross Media Group.

The ASX closed up 1.7 points, or 0.02 per cent on Friday at 7114.50.

Battery boom keeps lithium recession proof for Wesfarmers partner SQM

The good times will keep rolling for lithium producers in a market free of the slowdown fears that rattled other commodities in recent months, according to the second-biggest supplier of the battery metal.

Reporting record quarterly earnings, SQM - which is partnering with Wesfarmers on the Covalent joint venture near Southern Cross - has projected at least a 35 per cent jump in demand this year, noting “very strong” electric-car sales in China in recent months.

All that when new lithium supply has been slow to come onstream.

“As a result of this, we believe that the supply/demand balance will be tight for the remainder of the year and that this high price environment could continue throughout 2022,” the Chilian company said.

The second quarter is showing the full impact of the lithium boom for SQM, just as the Santiago-based firm lifts output at a desert salt flat that is the world’s richest source of the metal.

As the clean-energy transition gains momentum, the company has been able to lock in high prices in contract renewals, cushioning the blow of cost inflation. Earnings before items surged sixfold to a record $US1.3 billion in the second quarter.

Adjusted profit came in slightly below expectations.

As other metals wilt in the past few months on concerns of slowing growth, lithium is holding up.

Wesfarmers and SQM are each spending $1.9b to bring Mt Holland, 105km south of Southern Cross, into production in 2024.

The mine would feed a new refinery being built in Kwinana that would turn out up to 50,000t a year of lithium hydroxide for use in batteries for electric cars.

While the lithium supply-side generally is struggling to keep pace with demand, SQM raised its sales guidance for this year to at least 145,000t, saying it’s close to reaching lithium carbonate capacity of 180,000t en route to its 210,000t target.

- with Bloomberg

Hang in there ...

We’ve seen A LOT of results presentations this week.

But this page from Penfolds owner Treasury Wine Estates on Thursday gave us hope the weekend was almost here.

The ASX is still closed on Saturday and Sunday, right?

A page from Treasury Wine Estates' results presentation.
Camera IconA page from Treasury Wine Estates' results presentation. Credit: Treasury Wine Estates

Stepping on the gas ...

APA admits to short-changing staff $33m

APA Group has unreservedly apologised to its staff after underpaying them $32 million over seven years.

The gas pipeline company coughed up to its payroll bungle after initiating an independent review which picked up the “system errors” which related to seven enterprise agreements

“APA apologises unreservedly to those affected and is committed to meeting all its employee obligations,” the company said in a statement.

APA has commenced a process to remediate the errors for affected employees and will include a provision of $32m in its financial statements for the year ended June 30.

The consideration includes associated superannuation and interest payments to employee entitlements under all seven of APA’s enterprise agreements, with the majority relating to periods prior to last financial year.

Read more here ...

Accent Group share price jumps despite 59pc profit drop

Specialty footwear retailer Accent Group says trading conditions in the first seven weeks of the new financial year were up strongly following the loss of $95 million in sales in 2022 on the back of major store closures.

The company — which owns The Athletes Foot, Platypus and Hype DC — reported group revenue for the year ending June 26 reached $1.1 billion, up 14 per cent on the prior year.

In a statement to the ASX on Friday, Accent said total online sales rose 25.7 per cent to $263.8m, contributing 24.4 per cent of total retail sales.

Despite reporting a 59.1 per cent decrease in its net profit after tax to just $31.5m, shares in Accent has climbed 7.3 per cent, or 10¢, at $1.61 at 11am.

The retailer also met its July guidance for earnings before interest and tax of $62.3m, including previously flagged $7.6m of one-off, non-cash charges.

Gold Road lifts De Grey stake, but hoses down takeover talk

Gold Road Resources has hosed down expectations of a takeover bid for De Grey Mining despite increasing its stake in the Pilbara gold player to 19.99 per cent.

The company bought an additional 4.67 per cent of De Grey as part of a strategic derivative transaction arranged by Credit Suisse late on Thursday.

The acquisition failed to excite investors on Friday with De Grey trading down 2¢ at 98¢ at 11.20am while Gold Road was up 2¢ to $1.36.

Read more here ...

​​

​​

Danielle Le Messurier

Strong growth in telco subscribers lifts Pentanet revenue

Perth-based internet services provider Pentanet says a 54 per cent jump in revenue to $16.8 million helped improve its financial results in the year to June 30.

Strong growth in the telco business, up 34 per cent to 16,674 subscribers, helped lift revenue and gross profit over the 12-month period, the company said in its full-year results on Friday.

Fixed wireless customers comprised 39 per cent of total subscribers.

Pentanet reported a net loss of $7.9m, down from $13.7m the previous year. The figure for the 2021 financial year included one-off costs of $8.4m related to the company’s initial public offering, pre-IPO funding and staff equity payments.

Increased operating expenses related to investment in staff, marketing and network coverage expansion efforts saw earnings before interest, tax, depreciation and amortisation fall $2m year-on-year to a loss of $4.4m.

Managing director Stephen Cornish said Pentanet’s 2022 result was achieved “during a period of significant investment in network capacity” and establishing the first-to-market cloud gaming business, GeForce NOW.

“Pentanet is so much more than just another telco. With our ongoing focus on impactful innovation, we are not only contributing to the development of Australia’s digital future but also improving and increasing the ways we connect digitally and IRL (in real life),” Mr Cornish said in a statement.

Pentanet said it was well positioned to continue growing with $13.4m in net cash at year-end, following significant investment in expanded network capacity and cloud gaming.

No dividend was declared.

MACA fires back after NRW bid

The MACA board did not state (as alleged in the NRW announcement) that ‘MACA does not propose to engage in further discussions’.

Well, that’s perhaps NOT the best start to a potential deal.

Read the full story here ...

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails