Indicative Result Summary
 

Telstra Corporation Ltd

9.5% increase in NPAT excluding the impairment in 1H 2018: Telstra Corporation Ltd.’s (ASX: TLS) stock rose 0.58% on February 15, 2018 after the company in 1H 2018, excluding the Ooyala impairment, has reported 9.5% increase in NPAT and 12.2% increase in basic EPS. Otherwise, net profit dropped by 5.8%. Further, on a guidance basis, there is a 5.4% increase in the total income and 2.4% increase in EBITDA. The company in 1H 2018 has increased the subscriber numbers on mobile and fixed, reduced the underlying core fixed costs and made progress under its strategic investment program. Additionally, TLS will pay a total fully franked interim dividend of 11 cents per share, comprising an interim ordinary dividend of 7.5 cents per share and an interim special dividend of 3.5 cents per share. TLS seems to be building well on its fundamentals despite the softness seen last year, and we give a “Buy” recommendation on the stock at the current price of $3.45
 

Financial Highlights (Source: Company Reports)
 

Origin Energy Ltd

51% growth in underlying EBITDA from continuing operations in 1H 2018 & higher FY18 underlying EBITDA forecast: Origin Energy Ltd.’s (ASX: ORG) stock rose 6.85% on February 15, 2018 after the company in the first half 2018 reported 51% growth in the underlying EBITDA from continuing operations to $1.49 billion. The underlying profit grew by $255 million to $428 million, due to the earnings growth in Energy Markets and Australia Pacific LNG. While, the company has posted statutory loss of $207 million, due to the impairment charges after tax of $533 million in the first half of FY 18. ORG had improved earnings from Energy Markets and Australia Pacific LNG has delivered higher production and revenue. Moreover, ORG has raised its full-year 2018 underlying EBITDA forecast for its energy markets business to between A$1.78 billion and A$1.85 billion from an earlier forecast of A$1.7 billion to A$1.8 billion. Additionally, ORG intends to redeem 500 million euros worth of capital securities due 2071 issued by subsidiary Origin Energy Finance Limited. We give a “Hold” recommendation on the stock at the current price of $8.88
 

1H 2018 Result (Source: Company Reports)
 

Suncorp Group Ltd

15.8% fall in the reported net profit after tax in 1H 2018: Suncorp Group Ltd.’s (ASX: SUN) stock fell 2.4% on February 15, 2018 after the company reported 15.8% fall in the reported net profit after tax (NPAT) to $452 million in 1H 2018. The profits fell due to the impact of natural hazards and timing of investments, including the Business Improvement Program and increased regulatory costs. However, SUN in 1H 2018 has reported 2.5% growth in the topline due to the strong momentum across Home and Motor Insurance and Banking. Further, SUN has projected a stronger full year result and will pay 33 cents interim dividend in April. As of now, we give a “Hold” recommendation on the stock at the current price of $13.00
 

Healthscope Ltd

Statutory NPAT from continuing operations fell 12.8% in 1H 2018: Healthscope Ltd.’s (ASX: HSO) stock fell 4.8% on February 15, 2018 after the company stated that its 1H 2018 Statutory NPAT from continuing operations fell 12.8% to $77.5 million. The Group Revenue grew 4.9% to $1,222.1 million in 1H 2018 from recently completed and maturing brownfield hospital expansions. Moreover, Hospitals Operating EBITDA projection for FY18 remains unchanged, which is expected to be broadly similar to FY17; and second half operating EBITDA is expected to witness growth. The group will pay a 3.2 cents dividend in March to its shareholders. Based on the foregoing, we have a “Hold” recommendation on the stock at the current price of $1.78
 

McGrath Ltd

Turnaround to Loss from Profit in 1H 2018: Mcgrath Ltd (ASX: MEA) in 1H 2018 has posted an interim loss on impairment charges on its sales segment assets. The net loss for 1H 2018 is of A$25.5 million compared to a profit of A$2.7 million a year ago. The revenue from ordinary activities fell to A$51.6 million from A$67.3 million a year ago. MEA stock has fallen 18.27% in three months as on February 14, 2018 and it will be better to avoid the stock at the moment.
 

South32 Ltd

Revenue grew 8% due to the higher realised prices in 1H 2018: South32 Ltd (ASX: S32) in 1H 2018 has reported 12% fall in the statutory profit after tax to US$543M while stronger commodity prices had more than offset the lower volumes and broader inflationary pressure, most notably in the aluminium supply chain. The corresponding period’s profit included the benefit from the recognition of a fair value gain on non-trading derivative instruments of US$189M. However, the revenue grew 8% due to the higher realised prices for most of the commodities during the period and the group intends to pay its shareholders about 7.3 cents per share as dividend including a special dividend. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $3.50
 

Guidance (Source: Company Reports)
 

Sonic Healthcare Ltd

US Business was impacted in 1H 2018: Sonic Healthcare Ltd (ASX: SHL) stock fell 1.8% on February 15, 2018, however, the company in 1H 2018 has reported 8% revenue growth to A$2.67 billion, 9% EBITDA growth and 16% growth in the statutory net profit to A$229 million. In 1H 2018, there were fewer working days compared to the comparative period and the group had the impact of two hurricanes on the US business. However, SHL expects to benefit from US tax reforms and is on track to achieve its full year guidance. SHL stock has risen 12.66% in three months as on February 14, 2018 and is trading at a high level. We give an “Expensive” recommendation on the stock at the current price of $23.77
 

IPH Ltd

Weak 1H 2018 results:Intellectual Property group, IPH Ltd.’s (ASX: IPH) stock fell 19.9% on February 15, 2018 after the company reported weak 1H 2018 results. In 1H 2018, there has been a fall of 8.8% in the underlying EBITDA to $33.2m with 11% fall in net profit after tax. The 1H 2018 is impacted due to the movement in foreign exchange rates, in particular the average USD exchange rate was 2.5c lower than the average rate during the prior comparative period. Further, all of the comparatives are impacted by the recording of a large unrealised foreign exchange gain on the revaluation of USD denominated balances. Based on the shortcomings, we give an “Expensive” recommendation on the stock at the current price of $4.10
 

Evoluton Mining Ltd

20% decline in AISC in 1H 2018:Evolution Mining Ltd (ASX: EVN) has posted 10% fall in the 1H 2018 statutory net profit after tax to A$122.5 million and 8% increase in the underlying profit after tax to A$124.7 million. Further, the 20% decline in AISC has contributed to higher EBITDA margins of 53% and a 20% increase in Group cash generated to A$176.8 million. EVN stock has risen 10.71% in three months as on February 14, 2018 but is trading at a high level. As a result, we give an “Expensive” recommendation on the stock at the current price of $2.85
 

HT&E Ltd

Mixed FY17 Financial Performance: HT&E Ltd.’s (ASX: HT1, formerly APN News & Media) stock surged 13.1% on February 15, 2018 after the company in FY17 reported 58% growth in the segment revenue from continuing operations to $472.3 million. There is a 28% increase in the underlying net profit after tax and before amortisation (NPATA) attributable to shareholders to $54.1 million for the period. However, the net loss after tax for the full year has risen to $117.5 million from a loss of $6 million in the previous year. Meanwhile, HT1 stock has fallen 6.87% in three months as on February 14, 2018. We give an “Expensive” recommendation on the stock at the current price of $1.765
 

ASX Ltd

5.1% growth in the net profit in 1H 2018: ASX Ltd (ASX: ASX) stock rose 3.4% on February 15, 2018 after the company reported 5.1% growth in the 1H 2018 net profit due to the 8% increase in the revenue to $501.5 million. Further, the profit grew due to higher secondary capital raisings, increased futures trading particularly from offshore customers and growth in the technical services connections and data feeds. The group expects $50 million as the capex for full year based on investment in technology while capex for half year was $13.4 million. However, ASX stock is trading at a high level and looks “Expensive” at the current price of $55.93
 

Strategic Initiatives (Source: Company Reports)

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