As the earnings season kicks into full gear, a full roundup will be provided here at MacroBusiness each week, with significant reports (e.g missed earnings or surprise results) reported daily.
Last week saw quite a few majors starting off the earnings season, including BHP-Billiton, (BHP) Rio Tinto (RIO) and Telstra (TLS), and Newcrest Mining (NCM) (covered below).
In addition, National Australia Bank (NAB) provided an update, whilst Macquarie Group (MQG) surprised with a profit downgrade.
So far, with only a small sample of companies reported so far, the better than expected results account for 47%, with worse than expected at 40%, according to AMP Capital. I wonder what lies ahead this week?
Here’s the round up of last week’s results:
Newcrest (NCM)
Australia’s largest gold miner announced a whopping 50% increase in statutory profit, with underlying profit up 167% to $611 million for the second half of last year. Operating margins remained strong, but have slipped slightly on the previous period, whereas underlying cash flow from operations has increased by some 9%:
The major revenue earner continues to be gold, up some 21%, whilst silver exploded up 68% its a small part of overall revenue, as copper remains the second largest revenue source. The company stated that fuel, energy, maintenance and labour costs added to the cost of sales, including the impact of absorbing the Lihir acquisition, which although impacted by weather is providing good growth in earnings.
Newcrest announced a substantial increase in its dividend policy, upping the interim dividend 20% to 12 cents per share, with franking expected in FY13 as its balance sheet and gearing profile remain very strong, having undergone a large bond raising in the US recently.
Here is Newcrest’s share price performance over the last 12 months:
BWP Trust
BWP Trust – the major holder of Bunnings Warehouse commercial property – reported net profit (after tax) down 41% to $32 million for the year ended 31 December 2011, compared to $54 million in the same period in 2010, on a 20% increase in revenue.
The revenue increase was due to growth in the property portfolio, mainly from acquisitions and rent growing over 3% and more rent reviews forthcoming. Operating cashflow increased substantially and gearing remained quite low at just below 19% of debt to assets.
The distribution declared was 6.6 cents compared with 6.18 cents last year, with some growth expected for the full year distribution, although note in the chart below that this is still well below trend. The stock is already ex-distribution, running at a high 7.1% yield, with no franking.
Here is BWP’s share price performance over the last 12 months:
BWP provided a solid outlook with stronger rental income expected although they noted a softer commercial property market and competition from Woolworths Masters DIY brand against Bunnings Warehouse may actually provide more acquisition opportunities.
Stockland
The largest residential property developer declared an 8% cut in underlying profit of $350.8 million compared to $380 million previously, mainly due to an realised $85 million loss in financial/currency hedging.
The company had net cash outflow of $154 million, due to a share buyback and distributions (this is poor capital management) and less than expected sales and timing, although the latter is expected to improve in this second half of FY12.
In their investor’s presentation pack, Stockland admitted that “underlying demand” was running at two thirds strength, thus impacting residential land sales:
And a move towards “affordable products” – i.e cheaper houses under $350,000 with lots of interest from First Home Buyers (FHB), with an accelerating trend towards smaller lots:
The developer announced a slight increase in distributions, up 2% to 12 cents per security, with no franking attached. This equates to roughly a 7.5% yield on Friday’s closing price (the stock is already ex-dividend).
Here is Stockland’s share price performance over the last 12 months:
Tabcorp (TAH)
Consensus bets were pleasantly off with Tabcorp announcing a big lift in profit to $189 million, up 14% and over $8 million above expectations.
Earnings across all divisions increased, with its core wagering business up over 6% to $132 million, as it will lose approx. $130 million when it loses its Victorian poker machine business later this year.
The company declared at 13 cent interim dividend per share, down on the previous period, but this is not comparable due to the spinoff of the casino business last year.
Here is Tabcorp’s share price performance over the last 12 months:
Australand (ALZ)
Australand Property Group reported net profit (after tax) down 15% to $140.6 million for the year ended 31 December 2011, compared to $165.8 million in the same period in 2010. Earnings per share actually increased some 6% however.
Revenues fell almost 9 percent to $692 million, although operating cash flow improved to $57.5 million from $38.8 million.
The earnings hit was due to revaluing 7 major development projects in Queensland and some loss on interest rate derivatives. The company said residential sales volumes rose some 15 percent compared to 2010, but indicated that the domestic economy remained subdued, with management clinging to the “strength of resource sector will have positive impact on broader economy” meme.
The final dividend declared was 11 cents, taking the full year dividend – which is unfranked – to 21.5 cents compared with 20.5 cents last year. The stock is already ex-dividend.
Here is Australand’s share price performance over the last 12 months:
After rising as high as $2.69 on the result, Australand closed yesterday up 0.4% to $2.64 per share.
Ansell
The occupational healthcare and protective product manufacturer reported a very marginal rise in HY profit, $64.9 million compared to $64.1 million previously.
Sales dropped (in AUD – up in USD terms), blamed mainly on IT problems, with the chief executive Magnus Nicolin saying they have disappointed customers.
The interim dividend was increased 1 cent to 15 cents, with the stock going ex-dividend on 13th February, its closing price yesterday of $14.84 implying a paltry 2.3% yield, with no franking credits available.
Here is Ansell’s share price performance over the last 12 months, which has been on a tear since October 2011:
Bradken
Bradken (BKN) is a manufacturing and distribution company providing consumable products for the mining, rail and energy sectors
A big increase in revenue, up almost 30%, with net profit up a stonking 65% to $43 million, but below consensus expectations. This means earnings per share (EPS) rose to 26.2 cents from 18.7 cents over the same period last year.
The company also announced a nice increase to their dividend, rising some 5% to 19.5 cents per share (fully franked and going ex-dividend on the 14th of February). This equates to a 5% dividend yield, or 7.2% grossed up with franking credits for the yield chasers.
Here is Bradken’s (BKN) share price performance over the last 12 months:
BKN – 1 year daily price chart with 200 day moving average
Bradken reaffirmed full year guidance for earnings growth in the 25-30% range, meaning net profit growth of 35-40%, dependent upon maintaining their high order book and high margins. The market weren’t happy with the result, pushing the stock down some 2.7% in trading yesterday.
Transurban
The leading toll road operator announced a strong increase in revenue for the half year yesterday, with earnings before interest/tax increasing by 7.5%, mainly due to strong revenue growth at its Citylink asset. This equated to a 27 per cent increase in profit for the second half of last year.
Toll revenue on all Transurban roads increased by 6 per cent to $473.8 million.
A 14.5c distribution to shareholders was declared which included a fully franked component for the first time of 3.5 cents, the stapled security going ex-dividend this Friday.
Here is Transurban’s (TCL) share price performance over the last 12 months:
TCL – 1 year daily chart with 200 day moving average
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