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Earnings Season Video

Earnings Snapshot (Early 2015 Releases)

Commonwealth Bank (CBA): The Bank reported its statutory net profit after tax for the half year ended 31 December 2014 of $4,535mn representing an 8% increase on prior corresponding period. Cash NPAT was $4,623mn (8% increase again). Cash Return on Equity was reported to be 18.6%. The profit increase was owing to 5% increase in revenue in spite of lending market being submissive. An interim dividend of $1.98 per share indicating an 8% rise on 2014 interim dividend, was declared. Slight dip in shares seen post a healthy course.

Bendigo and Adelaide Bank (BEN): The Bank reported a net first half profit of $227.9mn indicative of an increase from $180.7mn in the previous corresponding period. The cash earnings rose ~11% to $217.9mn. Revenue growth supported by a $24mn from the Rural Finance Corporation of Victoria acquisition. CET1 ratio increased from 7.9% to 8.1%. Further, the results was steered by net interest margins and balance sheet growth. An increase in customers paying down their debts was seen while strong demand for housing loans was witnessed. Loan impairments contracted by $79.1mn over the past year. The interim dividend was raised by 2 cents to 33 cps. The result is not found to be encouraging owing to which the share price dip has been perceived.


Domino’s Pizza (DMP): A 44% surge in first-half profits to $29.1mn has been reported by the Company leading to a good rise of more than 20% in share price. The profit emanated from digital and product innovation, record store count growth, overseas earnings from Japan, economies of scale and crowdsourcing initiatives. With 92 new stores, a record number of openings in Australia, New Zealand, Europe and Japan. An interim dividend of 24.6 cps which indicates a 39% rise on the prior corresponding period has been declared. DMP has further upgraded EBITDA growth Guidance to 30% and NPAT growth Guidance to 32.5%.


DMP Earnings per Share (Source – Company Reports)

AGL Energy (AGL): The Company reported its half year results for the six months ended 31 Dec’ 14 with statutory net profit after tax of amco$308mn reflecting an 18% increase and underlying profit up 24.8% at $302mn. The revenue was down by 2% at $5,183mn. Statutory EPS of 48.6 cps with an increase of 7.8% and underlying EPS of 47.7 cps with a 14.1% rise were reported. FY15 interim dividend of 30.0 cps (100% franked) remained unchanged. Underlying operating cash flow before interest & tax was down $128mn. AGL reaffirmed underlying profit guidance of $575mn to $635mn for the 12 months ending 30 June 2015. Retail market competition is said to remain intense. The results led to a slight jump in shares.

Stockland (SGP): Strong half year results have been delivered with net profit up 55%. Underlying profit of $290mn (8.5% increase on 1H14) and statutory profit of $462mn were reported. Strong residential sector and housing activity led to the profits. The thriving residential business led to SGP recording its strongest first-quarter result by collecting more than 1,650 deposits in the first three months to September 2014. Underlying EPS of 12.4 cents, up 6.9% was noted. Shares witnessed an improvement. SGP seems to be on track to achieve FY15 EPS growth of 6.75 – 7.5% above FY14 subject to market conditions remaining same. Recent announcement of becoming a substantial holder from CBA is also a high point.


Rio Tinto (RIO): The Company witnessed 78% increase in full year net profit for 2014 amounting to $US6.5bn despite the falling prices of iron ore and coal. Underlying earnings of $9.3bn has been reported. In fact, net debt reduced by $5.6bn to $12.5bn. Cost reduction initiatives and supply ramp-up enabled doubling of after tax profit for 2014. Sky-touching share prices, although with a little dip now, emanate from higher dividends.


RIO Material Increase in Cash Returns to Shareholders (Source – Company Reports)

Telstra (TLS): The Company reported a spike in first half net profit with 22% increase to $2.1bn owing to lower finance costs. EPS increased 23.4% to 16.9 cents. There was 0.5% increase in EBITDA to $5.3bn. An interim dividend of 15 cents was noted. Reintroduction of DRP is indicated from next full-year results. However, the revenue growth remained submissive. The shares levelled more or less flat following a short period of upsurge. TLS expects continued low single digit income and EBITDA growth to balance the absence of CSL 2014 operating revenue and EBITDA, i.e., a flat guidance.

Transurban (TCL): The Company reported a $354mn loss which is 540% decrease on last year’s 1H profit of $80mn, owing to the $7bn acquisition of Queensland Motorways and the $406mn in transaction costs. The normalised half-yearly profit was $51mn, which was below market expectations. Free cash was $378mn indicative of 57.5% rise compared to pcp. The interim dividend rise from 17 cents to 19.5 cents with full-year guidance to 39.5 cents per security has been an important aspect. The shares remained slightly flat.

Newcrest Mining (NCM): Net profit up 400% on no impairments was witnessed by the goldminer. Development of the Cadia East mine in New South Wales led to the majority of profit growth. Underlying profit of $200mn which is marginally down on last year’s $207mn was reported. Higher copper sales and cost cutting efforts (11%) equipoised the lower gold sales. NCM reported 6% decrease in gold production (1,139koz) given lower grade ore being mined at its Lihir operation. There was a 19% surge in copper production (50.3 thousand tonnes) given higher grades of ore from Australian operations. The Company’s forecast gold production for the year is of between 2.3 to 2.5 million ounces and copper production in the range of 90,000 to 100,000 tonnes. No interim dividend was paid. Share sentiments were not great.

Coca-Cola Amatil (CCL): The Company reported a 241% rise in full year profit to $272.1mn. Underlying earnings dipped 23% owing to a 2% decline in sales revenue to $4.9bn. The Australian beverage business earnings declined 21.3% while Indonesian and PNG businesses delivered strong volume growth and market share gains. New Zealand & Fiji earnings rose by 6.7%. There was a 25% reduction in full year dividend to 42 cps. Despite mixed results, a bounce in shares was noticed.

Amcor (AMC): The first half profit increase of 6.7% to $US321.3mn has been reported. Financial strength with robust balance sheet and net cash generation of $205mn helped in raising interim dividend by 9% to 19 US cents. The Company also announced $US500mn share buy-back. EBIT/Sales margins were up from 10.3% to 10.8%. AMC has completed 16 acquisitions in last four years and has been involved in various organic growth investments. The underlying organic profit growth of 3-3.5% has been reported. The share price surged a little given the positives.

Sonic Healthcare (SHL): The first half profit dropped 1.9% to $170mn resulting in some level of disappointment even when there was a 6% rise in revenue. There was a 2 cents rise in dividends to 29 cps. Pathology volume growth strengthened in Australia and the USA. Interest expenses are also continuing to decrease. SHL has maintained its guidance. The flat performance up till now has led to a little setback to shares despite the fact that currency movements may augment reported results in near future.

Insurance Australia Group Limited (IAG): The first half profits dropped 9.8% to $579mn. Revenue saw a rise of 17% to $5.6bn owing to the inclusion of Wesfarmers insurance business in the accounts. The 13 cps of interim dividend has been maintained by IAG. The full year outlook with Gross Written Premium growth at lower end of 17-20% guidance range and insurance margin guidance at 13.5-15.5% has been conveyed. Reserves releases are trending towards long-term expectations. The share play was not very remarkable from market standpoint.

Iluka Resources (ILU): The Company declared a full-year loss of $62.5mn as compared to last year’s $18.5mn profit owing to a previously announced $87mn impairment charge in the US. Free cash flow generation of $196mn and a disciplined cash cost performance with unit cash costs down 10% was reported. A slight increase in final dividend is being declared with a figure of 13 cps which brings the full year payout to 19 cents indicative of 40% payout of free cash flow. The balance sheet strength is good with?gearing of 3.9%. ILU has maintained solid margins and demand for Zircon is likely to improve with recovery expected for titanium dioxide feedstocks. The shares soared given a good play.