Maitland/AMO Morning Monitor – Thursday 20 August 2020
In the news
- BTec results pulled at last minute as UK exam chaos continues
- Russian opposition leader Alexei Navalny in intensive care after suspected poisoning
- Australia's Qantas calls for travel ‘clarity’ after posting $1.4bn full-year loss
- Kamala Harris accepts Democratic nomination for vice-president
- Manchester City in late-stage talks to buy French club ESTAC Troyes
- Health chiefs will meet this morning to decide whether new local lockdowns should be imposed on areas with growing coronavirus cases.
- Schools Minister Nick Gibb will this morning insist the release of GCSE results will not explode into a second exams nightmare.
Stock market moves
- In Europe, the FTSE 100 and the STOXX 600 both opened down by 1%.
- In Asia, Japan’s Topix index fell 0.8% while Australia’s benchmark S&P/ASX 200 lost 0.9%. South Korea’s Kospi dropped 2.9%. China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 1% and Hong Kong’s Hang Seng slipped 1.9%.
- The S&P 500 ended down 0.4% on Wednesday.
- Futures tipped US stocks to lose further ground when Wall Street opened later in the day, with the S&P 500 expected to drop 0.6%.
Corporate announcements* Maitland Client
Antofagasta PLC Half-year Report
- Revenue for the first half of 2020 was $2,138.8m, 15.3% lower (H1 2019: $2,525.6m).
- EBITDA was $1,012.8m, 22.4% lower (H1 2019: $1,305.9m).
- EPS decreased 55.3% to 13.7 cents (H1 2019: 30.7 cents).
- Iván Arriagada, CEO, said: “Work on our growth projects is now accelerating and we are maintaining our full year guidance at the lower end of the original 725-755,000 tonnes range, at a net cash cost of $1.20/lb. The interim dividend declared of 6.2 cents per share is consistent with our dividend policy of paying out a minimum of 35% of underlying net earnings. Our focus on copper, a critical metal for a modern low-carbon economy, our strong financial and operating position together with our portfolio of growth projects will allow us to deliver long-term value creation for all our stakeholders through the cycle.”
- Sales revenue decreased 3% to $12.2bn.
- EBITDA increased 2% to $1.6bn (H1 2019: $1.62bn).
- PBT decreased to $518m (H1 2019: $717m).
- Albert Manifold, CEO, said: “As a Group we took swift and comprehensive action in response to the COVID-19 crisis, and our ability to flex our cost base and deliver improved profitability, margins and cash generation in a rapidly evolving environment demonstrates the strength and resilience of our business. The outlook for the rest of the year and into 2021 remains uncertain and is dependent on an improving health situation across our markets.”
- Group revenue increased 6.9% to £3,957.4m (2019: £3,701.9m).
- Reported PBT declined 19.9% to £143.5m (2019: £179.2m).
- Reported basic EPS decreased 14.4% to 18.5p (2019: 21.6p).
- Outlook: “The Group now intends to invest in excess of £100 million in its digital elevation strategy. With a particular focus on Flannels and an enhanced customer experience, this investment will be integral in supporting the continued growth of our online channels. This commitment will support the Group’s wider ongoing elevation strategy. With digital transformation now at the forefront, the successful reopening of our stores after the Covid-19 lockdown and continuing strong web performance, we are confident in achieving between a 10% and 30% improvement in underlying EBITDA during FY21.”
- Operating income decreased 0.4% to GEL 514m (H1 2019: GEL 516m).
- PBT adjusted for one off costs decreased 95.8% to GEL 10m (H1 2019: GEL 244m).
- Total assets increased 18.9% to GEL 19,184m (June 2019: GEL 16,134m).
- Archil Gachechiladze, CEO, said: “Bank of Georgia Group’s performance has been very robust throughout the first half of the year, having taken a significant ECL provision in the first quarter that we continue to expect to cover all expected credit losses through the full economic cycle, relating to the COVID-19 impact. Our performance during the second quarter of 2020 has been extremely resilient, delivering strong profitability during a time when the Georgian economy has experienced its worst reduction in economic activity for more than a few decades”
- NAV dropped to £1,525m (30 June 2019: £1,599m).
- NAV per share dropped to 309p (30 June 2019: 325p).
- Total return decreased to -6% (30 June 2019: +3%).
- Ben Loomes, CEO, said: “The valuation of our portfolio provides a solid base from which to deliver attractive and more consistent and sustainable shareholder returns. We have an attractive portfolio with significant embedded value and, as we manage greenfield projects through to operation, good realisation opportunities at uplifts to book value. The Group’s expertise and long-term partner relationships enable it to access new opportunities, and create value for all stakeholders by investing in, and actively managing, sustainable infrastructure projects. A strategic review is well underway, that will ensure that we are well-positioned to capitalise on new investment opportunities and develop a healthy future pipeline.”
- The trading momentum announced at the time of our preliminary results in July has continued and the significant change in demand for AO’s products and services has been maintained.
- As a result, in the four months ended 31 July 2020 the Group has recorded strong year-on-year revenue growth in the UK of 58.9% to £401.3m and of 91.5% to €74.3m in Germany.
- Operationally, the business continues to support our customers at a time when social distancing and continued changes to official Covid-19 guidance become the new normal.
- The Group will updater further in its Interim Results currently scheduled for release in November 2020.