There was plenty of corporate news to digest on a jam-packed reporting season day, but the ASX finished barely changed from yesterday’s record high. The Australian share market pulled back slightly from record highs as investors digested a jam-packed day of earnings reports, with a significant miner and bank weighing on the bourse. At the same time, a retailer’s trading update proved particularly intriguing.
The S&P/ASX200 closed just 3.9 points lower at 7588.2, while the All Ordinaries Index dipped 5.9 points to 7860.5. CommSec analyst Steve Daghlian noted it came after a remarkable 11-month positive run, with new records set multiple times recently. Unsurprisingly, Rio Tinto was a significant weight on the market, which went ex-dividend with its biggest shareholder payout ever.
Mr. Daghlian said $7.60 per share was more than three times what the miner paid investors a year earlier. “This is about 5.9 percent of its share price, hence the tumble today,” he said. Rio fell 6.88 percent to $120.26 while BHP firmed 0.9 percent to $52.99. Another significant weight was Commonwealth Bank, which gave up 2.12 percent to $105.88 after Citi slapped a sell recommendation, with a target price of $94.50. It said it saw better value with the other central banks.
ANZ added 0.4 percent to $29.35, Westpac inched one cent lower to $25.76, and National Australia Bank gained 0.18 percent to $27.27 after booking a $1.65bn unaudited statutory net profit for the June quarter, up from $1.5bn for the same period last year. After Myer’s major shareholder demanded a trading update ahead of a planned board overhaul, the department store chain revealed it expected to return to second-half profitability for the first time in four years.
Solomon Lew’s Premier Investments had been pointing to Myer’s net loss last year in its push to install two of its nominees to the board along with other candidates it had been in talks with, but says it has no current intention launching a takeover offer. Myer shares leaped 9.57 percent to 51.5 cents. Premier, which owns Smiggle and Peter Alexander brands, rose 3 percent to $27.15.
Telstra reported a “turning point” in its financial performance, booking a 3.4 percent rise in full-year net profit to $1.9bn and saying the underlying business would return to full-year growth in 2021-22. But the continuation of “NBN headwinds” was harmful, Ord Minnett noted, with fixed enterprise and fixed wholesale experiencing higher-than-expected declines.
Financial services giant AMP reported $181m in first-half underlying net profit – which strips out non-recurring revenue and expenses – up from $115m for the same period last year. Telstra also announced shareholders would receive up to $1.35bn in the form of an on-market buyback and declared a final dividend of 8 cents per share. Telstra shares climbed 3.66 percent to $3.97.
Citi said the result was below estimates, while Ord Minnett said a key positive was strong bank trends, with good loan growth. But there was disappointment AMP did not declare a dividend. “Most would have expected a return to dividends in FY21 as previously foreshadowed,” Ord Minnett said. Shares in AMP gained 3.24 percent to $1.11.
Insurer QBE booked a first-half statutory net profit of $441m, compared with a net loss of $712m for the prior period, saying there had been a material turnaround in underwriting and investment returns. “Insurance groups have broadly been able to increase their margins this year with people off the roads and out of the streets,” OMG chief executive Ivan Tchourilov said.
Moody’s Investors Service vice-president Frank Mirenzi said the much-improved results were driven by robust premium growth and favorable development of reserving for prior years’ claims. Shares in QBE jumped 8.12 percent to $12.51. Engineering group Downer EDI reported a 21.4 percent rise in full-year underlying net profit to $261m, saying its urban services businesses performed well.
Ord Minnett described the result as vital. Industrial property giant Goodman Group delivered a nearly54 percent leap in full-year statutory profit to $2.3bn, saying it enjoyed high occupancy, rental growth, and strong investment returns. Downer EDI shares lifted 4.15 percent to $5.77.
Moody’s Investors Service senior vice-president Matthew Moore said demand for Goodman’s assets and developments remained robust. Logistics and data storage benefited from changing consumer behaviors, increased data usage, and a greater focus on supply chains. Shares in Goodman declined 2.25 percent to $22.64. GrainCorp rocketed 11.7 percent to $6.11 after substantially upgrading its full-year guidance thanks to “excellent” demand for high-quality Australian grain.
AGL booked a $2.05bn full-year statutory net loss, a whopping reversal of fortunes from a $1.007bn net profit previously, blaming lower wholesale electricity prices, reduced electricity generation output at peak periods, and the roll-off of legacy supply contracts in wholesale gas.
“This might come as a shock to anyone who has looked at their electricity bill lately since we pay some of the highest energy prices in the world,” Mr. Tchourilov said. AGL Shares, planning a radical demerger focused on lower carbon-emitting energy sources, slumped 5.53 percent to $7.18.
Property developer Mirvac posted a 61 percent jump in full-year statutory profit to $901m, saying momentum had accelerated “across the business”. Mirvac shares edged 0.67 percent lower to $2.98. The Aussie dollar fetched 73.64 US cents, 53.08 British pence, and 62.69 Euro cents in afternoon trade. Published initially as the Australian sharemarket barely changed as investors digest bumper day of corporate earnings reports
