Get up to 2 Years of free subscription by inviting your friends to KALKINE!

For every friend of yours who joins KALKINE, we'll give you 3 months of free subscription (up to a limit of 24 months free subscription). If you recommend 3 friends and they join within a month of you referring them, you get 1 year free subscription to KALKINE reports added to your account (up to a limit of 24 months free subscription). Simply reply to this email with their name, e-mail and phone number.
 

Earnings Season Video

Earnings Summary - Part 2

Today’s report covers the latest earnings releases by ten companies emerging either as frontrunners or sitting as deadbeats based on their profit results and other highlights.

FRONTRUNNERS

Magellan Financial Group (MFG): The results for the half year ended 31 December 2014 revealed a 115% increase in net operating profit after tax to $77.4 million as opposed to $36.1 million for the six months ended 31 December 2013. The fully diluted earnings per share increased by 113% to 45.3 cents in comparison to 21.3 cents per share for the six months to 31 December 2013. MFG has doubled its dividend given the rising funds under management. The interim dividend of 37.1 cents per share, fully-franked, will be paid on 9 March 2015. This helps the Company fulfill the target of returning up to 80% of net profit to investors as dividends. The investment assets of about $248.1 million have been reported with shareholders’ funds of about $273.0 million. The Magellan Global Fund is expected to be listed soon on the ASX, which will providing retail investors the direct access to MFG’s flagship fund.


MFG Profitability Summary (Source – Company Reports)

Tatts Group (TTS): TTS reported a strong profit growth in H1 FY15 with net profit after tax up 14.6% to $139.8 million. The lotteries online sales went up 18.4% now 10.8% of all sales and the wagering online sales went up 12.9% now 24.8% of all sales. Further, the lotteries EBIT margin lifted to 14.6% (H1 FY14 - 14.5%) and wagering EBIT margin lifted to 24.4% (H1 FY14 - 23.1%). Some progresses with regards to the lotteries expansion in Victoria, New Queensland wagering framework and wagering renewal program including launch of UBET.com, etc. have been highlighted. The new lottery product (Set For Life game) is expected to lift the earnings through its massive potential once launched. A dividend of 9 cents per share has been declared to be paid on 02 April 2015. 


TTS Results Summary (Source – Company Reports)

ERM Power (EPW): The Company reported a good result with regards to its first-half profit. There was a rise in the bottom line profit to $75 million from $14.1 million a year earlier. Underlying profit surged more than twice to $14.7 million. The Company’s power generation business witnessed a 6% increase in raw earnings and 30% rise in retailing earnings. Thrust in commercial and industrial market segment also supported the results. Fully franked interim dividend of 6.0 cents per share has been declared. The guidance for the full year has been restated with increasing supplies to core market, the industrial and commercial sector. Given the above, a rise in share price has been noted.


EPW Half Year Highlights (Source – Company Reports)

Western Areas (WSA): The first-half net income witnessed a heightened surge to $23.84 million from $3.2 million of the previous year corresponding period. Primarily, the higher nickel price helped in achieving such a first-half profit. The earnings before interest doubled to $42.2 million from $20.7 million. Further, a 15% rise in revenue to $164.94 million from $143.4 million was reported. Factors such as cost control efficiency and interest payment savings were supportive of such a result. Net cash increased $43.4m to $53.7m from 6 months ago. WSA declared to pay an interim dividend of 3 cents, i.e., a threefold increase on 1HFY14.


WSA Income statement Waterfalls (Source – Company Reports)

Investa Office Fund (IOF): IOF reported a solid result with net profit for the half year ended December 31 ascending 78% to $99.5 million. There was a 3% rise in funds from operations to 14.2c per unit given IOF’s capital re-deployment into two Sydney assets, namely, Piccadilly and 6 O'Connell Street, which have illustrated great performance. This has been due to stronger than expected leasing outcomes. 12% rise in net property income to $95.8 million was also reported. Full year guidance for FY15 has been upgraded from 27.3 cpu to 27.5cpu (3.8% growth) and distribution guidance of 19.25c is indicative of a FFO payout ratio of 70%.



IOF Material Valuation Movements (Source – Company Reports)


DEADBEATS

PanAust (PNA): The mining company reported a loss of $US178.1 million for the 12 months ended December 31 from a profit of $36.4 million year before. The after tax loss includes impairments of $US264.7 million including the Inca D’Oro asset in Chile. Revenue from sales of $US679 million which is lower from $US725 million a year ago has been reported. The Company declared to cut dividend for the first time in three years in view of poor results. This brings the total payout for the year to $A0.03 a share which is down from 6 cps a year ago. PNA has taken $US50 million of costs out of the business over the past four months with an expectation to have an improved performance throughout the full price cycle.


PNA Cash Flow from Operating Activities (Source – Company Reports)

Crown Resorts (CWN): 47.2% decline in half-year net profit to $201.8 million was reported. This was owing to the slump in performance for the gambling hub of Macau wherein Melco Crown operates two casinos. There was a 9.2% increase in statutory revenue to $1.7 billion. Further, normalised revenue increased 17.2% to $1.7 billion ahead of consensus approximations of $1.49 billion. A recovery in VIP revenue at Crown Melbourne has steered the half year result to beat expectations and bring a rise in shares. An interim dividend of 18 cps was declared. The Company revealed that a deal with the Victorian government that lowered tax rates on VIP gambling will enable CWN to offset falling earnings.


CWN EBITDA & EBIT (Source – Company Reports)

Wesfarmers (WES): WES reported a dip of 3.7% in net profit for the half year ended December 31 to $1.376 billion with total revenue of $31.97 billion indicating a 0.4% increase, as opposed to the corresponding period previous year. However, WES reported robust underlying earnings growth given strong performance in retail portfolio. This was equalized by condensed earnings from the industrial portfolio which was predominantly affected by lower commodity prices. An interim dividend of 89 cps has been declared. The overall result brought little disappointment as margin growth did not meet expectations to a large extent. While profits for Bunnings and Kmart surged; earnings in the chemicals, energy and fertilisers division and coal profits dropped quite a bit.



WES Half Year Results (Source – Company Reports)

Drillsearch Energy (DLS): The Company declared a 60% slip in first-half net profit after tax to $14.3 million with 42% drop in the underlying net profit to $32.4 million on HY2014. There was a 27% decline in revenue to $146.7 million. Even the production dipped 13% to 1.5mmboe. The balance sheet and cash flow was reported to be robust. The Company reported a plummet in half-year profit for the Cooper Basin oil and gas player owing to crude oil price tumbling. Total impairments and write-offs of $61.8m (pre-tax) impacted the results.


DLS HY2015 Net Profit after Tax (Source – Company Reports)

Origin Energy (ORG): The Company declared a 9% slump in first-half underlying profit to $346 million. A loss of $25 million on the bottom line was reported given the non-cash charges and interest expenses. There was a 4% decline in revenues to $6.95 billion.


ORG Highlights (Source – Company Reports)

An interim dividend of 25 cps was declared. ORG conveyed that robust returns are expected with benefits coming in play next year in view of the about to complete construction of $24.7 billion Australia Pacific LNG project in Queensland.