Maitland/AMO Morning Monitor – Friday 30 October 2020
In the news
- Amazon's latest results have shown a tripling of profits and a 37% increase in earnings with revenue better than analysts expected at $96.15bn
- Big tech, including Google and Facebook, have added $163bn to market values despite the ongoing pandemic
- The IMF has urged Britain should increase spending to tackle the second wave of the coronavirus without worrying about increasing debt levels
- France enters its second national lockdown
- Nottinghamshire moves into top tier of coronavirus restrictions
Stock market moves
- In the US, futures following the Nasdaq 100 index were down 2.4% while those tracking the broader S&P 500 dropped 1.8%.
- Whilst in Europe, the FTSE100 and Stoxx 600 are both trading down in early hours.
- In Asia, markets have closed down with the Shanghai Composite down -1.47%.
- This week’s decline in global equities comes as investors have grown increasingly concerned over rising Covid-19 cases in western Europe and the US.
Corporate announcements* Maitland Client
NatWest Group PLC Q3 Interim Management Statement
- Q3 2020 operating profit before tax of £355m and an attributable profit to ordinary shareholders of £61m including a £324m loss on redemption of own debt.
- In comparison to Q3 2019, across the retail and commercial businesses income decreased by 12.1%.
- The company believes the full year impairment charge is likely to be at the lower end of the £3.5-4.5bn range following the limited level of defaults across lending portfolios and associated ECL stage migration within the Q3.
- Alison Rose, CEO, said: “Although impairments were relatively low in the quarter and we have seen some positive trends across our customer base, the full impact of Covid-19 remains very unclear. Challenging times lie ahead, especially as the current government support schemes come to an end and as new Covid-19 related restrictions are introduced.”
- Own sourced copper production of 934,700 tonnes was 81,100 tonnes (8%) lower than the comparable prior period.
- Own sourced cobalt production of 21,600 tonnes was 12,800 tonnes (37%) lower than the comparable prior period.
- Own source zinc production of 860,100 tonnes was 50,900 tonnes (6%) higher than the comparable prior period.
- The generally strong sequential quarterly production performance, in large part, reflects reversal of the various short-term Covid-19 related shutdowns in Q2, as mandated by several national/local governments.
- In response to the high uncertainty of the current environment IAG now plans for capacity in Q4 to be no more than 30% compared to 2019. As a result, the Group no longer expects to reach breakeven in terms of Net cash flows from operating activities during Q4.
- Total revenue down 66% at €6,565m (2019: €19,282m).
- Operating loss before exceptional items for the nine months €3,200m (2019 operating profit: €2,520m).
- Luis Gallego, CEO, said: “These results demonstrate the negative impact of COVID 19 on our business but they’re exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business effectively.
- Group revenue increased 71% to $522.7m (2019: $305.3m).
- Underlying EBITDA increased 96% to $192.6m (2019:$98.5m).
- Total gold produced increased 42%.
- James W Cameron Jr, Chairman, said: “EBITDA almost doubled from the first half of 2019 to US$193m, benefitting from higher gold prices and increased production.”
- Total operating expenses increased by approximately $11.4m for the six months ended June 30, 2019 to $41.1m for the six months ended June 30, 2020.
- Research and development expenses increased by approximately $5.8m for the six months ended June 30, 2019 to $29.4m.
- General and administrative expenses increased by $5.3m for the six months ended June 30, 2019, to $11.3m for the six months ended June 30, 2020.
- Theresa Heggie, CEO, said: “2020 has been a transformative year for Freeline, marked by encouraging clinical progress in our Haemophilia B and Fabry programmes, a strengthened management team and the successful completion of our Series C round and Nasdaq initial public offering.”
- The quarter finished as the company had anticipated when it reported its Interim Results on 9 September 2020 and it ishighly pleased with the performance, as a whole, across all its major geographies.
- The Board is very comfortable with its current expectations for the full year as it has entered Q4 with good short-term visibility and a strong backlog of orders.
- Further to its announcement that followed the shareholder vote held on the same day by Pivot Technology Solutions, Inc., in Canada, the group is pleased that Pivot will become part of Computacenter on Monday 2 November 2020.
- On the same day the group will also complete the transaction to acquire BT Services France which will be renamed Computacenter Network & Systems and become a wholly owned subsidiary of Computacenter France SAS.
- These acquisitions will have a marginal positive effect on the groups 2020 results but should, together in aggregate, add significantly to 2021.
- Recent experience has seen further improvement, with average weekly order intake running at just above 60% of prior year level over the last four weeks.
- Average order values have continued to run higher than historical comparatives, resulting in average weekly revenue over the same four week period of around 65% of prior year.
- The Group remains in a strong financial position, with a cash balance of $40.1m at the October 2020 accounting month end and no debt.
- Although the group has seen encouraging signs in recent weeks, the inherent uncertainty resulting from the COVID-19 situation means that it is too early to provide any forward guidance at this point. The company remains very confident in its strategy, business model, competitive positioning and ultimately its ability to deliver sustainable value for all stakeholders.
- Q3 Gross cash profit of $187m was in line with the prior year (Q3 19: $189m).
- Higher Q3 unit margins of $75 per thousand litres (Q3 19: $71) offset 7% lower Q3 volumes.
- Completed inaugural $350m bond offering to refinance existing amortising long-term debt.
- Payment of previously withdrawn 2019 final dividend of 2.7 cents per share, with dividends in respect of 2020 performance to be determined at full year results.
- Christian Chammas, CEO, said: “We remain cautiously optimistic and believe that with our diversified and resilient business model, and attractive long term growth opportunities across Africa, we are well positioned for the future.”
- Normalised revenue up 4% to £92.2m (2019: £88.3m); reported revenue of £91.2m (2019: £87.1m).
- Normalised operating profit reduced to £5.0m (2019: £19.8m); reported operating loss of £3.4m (2019: operating profit of £16.0m).
- Current trading: since the end of June, loan volumes and collections at branch-based lending and home credit have been better than previously expected while the performance at guarantor loans is below expectations; as a result, the Group’s overall financial performance is broadly in line with management’s expectations.
- John van Kuffeler, CEO, said: “The current tiered system of lockdowns across the country is continuing to present operational challenges, but our staff are demonstrating significant resolve to overcome these hurdles and continue to support the needs of our customers in these unprecedented times.”