Beach Energy Ltd

Strong June 2018 quarterly performance: Beach Energy Ltd (ASX: BPT), an oil and gas explorer and producer, saw its stock falling 3.52% on August 10, 2018 after the fall of Australia’s energy index by approximately 1.6 percent due to weakness in crude prices on the back of worries over demand as the Sino-U.S. trade dispute barrels is on. On the other hand, the company during the June 2018 quarter expanded the production by 10 per cent to 7.23 MMboe  versus the March quarter. The increase in production is driven by increased output from the Cooper Basin JV (+12%), Otway Basin (+21%) and Bass Basin (+64%), offset by lower Western Flank (-2%) and New Zealand (-16%) volumes. The sales volumes grew 12% to 7.60 MMboe compared to March quarter, due to higher production volumes and growth in sales volumes from Cooper Basin due to shipment timing. The average realised oil price increased 11% to $103.2/bbl compared to the March quarter, which led to 20% increase in sales revenue to $471 million. In the June quarter, Liquids (oil, condensate, LPG) accounted for over 60% of revenues. Moreover, the company has reduced the net debt by $221 million to $639 million. The free cashflow increased to $149 million (excluding acquisitions) from $133 million in the March quarter. Meanwhile, BPT has completed the acquisition of additional interests in the Otway Gas Project and BassGas from Toyota Tsusho. Additionally, at the end of the June 2018 quarter, 1P reserves had increased by 152 MMboe (+405%) to 190 MMboe and 2P reserves increased by 239 MMboe (+320%) to 313 MMboe. In addition, for FY 18, the production was 18.8 MMboe, which is at the high end of guidance of 18.1 – 19.1 MMboe. The FY18 consolidated capital expenditure was $288 million, which is below prior guidance range of $294 – 324 million. As a result, stock has risen 18.10% in three months as on August 09, 2018. However, based on the foregoing in view of high run-up and latest volatility, we give an “Expensive” recommendation on the stock at the current price of $ 1.920.


Fourth Quarter 2018 Performance (Source: Company Reports)
 

Macquarie Telecom Group Ltd

Expansion of its existing Macquarie Park Intellicentre & FY 18 guidance:Macquarie Telecom Group Ltd. (ASX: MAQ) has planned the expansion of its existing Macquarie Park Intellicentre to a 43MW Campus, which will be undertaken in phases. The phase 1 is Macquarie Intellicentre 3 (IC3) East, which will enable the company to expand its data centre capacity from a total load of 10MW to 26 MW.  In other  phases the company will add a further 17 MW through the build-out of Macquarie IC3 West. The initial capital expenditure on the Intellicentre 3 East Data Centre will be approximately $75-80 million, of which major part of expenses will be incurred across calendar year 2019. However, this capex will be partially offset by a fee from Keppel DC REIT to the value of $26-36m for the development of IC3 (East) core and building shell. The Company is expected to sign a 20-year lease with Keppel including options to renew. This data centre development is planned to be funded by structured debt financing due to be finalised in Q1 FY’19. The development of IC3 West is however be subject to the usual approvals of both Macquarie and Keppel. The first data hall in the new Intellicentre Campus is projected to achieve practical completion in late calendar 2019 with an opening day mechanical, electrical and plant (MEP) of 2.4MW. Further investment in MEP will be funded by the debt facility. On the other hand, MAQ has raised the FY 18 EBITDA guidance, is now expected to be in the range of $47-48m EBITDA compared to the previous guidance of $44-46M due to one-off and abnormal items. Further, MAQ has planned to declare a final fully franked dividend of 25 cents per share for the FY 18. Meanwhile, MAQ stock has risen 29.36% in three months as on August 09, 2018 and is trading at a high P/E. The stock edged low on August 10, 2018 post the recent run-up of 16% in last five days. We give an “Expensive” recommendation on the stock at the current price of $ 24.070.

 
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