Result Wrap for 5 Stocks : BHP Billiton, Rural Funds, Cedar Woods, Northern Star Resources & Aconex

BHP Billiton Ltd

BHP Details

Bumper result and launch of multi-currency bonds: BHP Billiton Ltd (ASX: BHP) reported a full-year 2017 net profit of $US5.89 billion ($7.42 billion) from a loss of $US6.385 billion reported last year, indicating a fivefold growth in profit. The group has also approved a global multi-currency bond repurchase plan. This plan has two separate transactions, one aiming certain bonds issued under the group’s U.S. debt capital markets program while the other one is aiming certain bonds issued under the Euro Medium-Term Notes Program. This plan is subject to a total cap of US$2.5 billion and would be funded via the group’s solid US$14.2 billion cash position. On the other side, the group enhanced their Net tangible assets per fully paid share to US$11.04 as of June 30^th, 2017, from US$10.51 in the prior corresponding year. BHP continued to achieve productivity gains of US$1.3 billion during the period leading to more than US$12 billion gains in the last five years. BHP is aiming for a more US$2 billion by the end of the 2019. Accordingly, the group enhanced their net operating cash flow by 58% year on year (yoy) to US$16.8 billion driven by better commodity prices coupled with solid operating performance.BHP cut their Capital and exploration expenditure by 32% to US$5.2 billion, but is targeting to keep the expenses below US$8 billion per annum for the 2019 and 2020 financial years.

 

BHP June fiscal year of 2017 performance (Source: Company reports)
 
BHP almost tripled its dividend and declared a final dividend of 43 US cents per share. Further, positive drilling results for petroleum, post the discovery of oil in multiple horizons at the Wildling-2 appraisal well in the Gulf of Mexico have been reported this month. BHP stock rose about 1.2% on August 22, 2017 post the positive results update. We maintain a “Buy” on the stock at the current price of $ 25.98



BHP Daily Chart (Source: Thomson Reuters) 

Rural Funds Group

RFF Details

Solid AFFO performance: Rural Funds Group (ASX: RFF) reported a strong Adjusted funds from operations (AFFO) per unit rise of 35% yoy to 12.51 cents for fiscal year of 2017, driven by acquisitions, development capex and a market rent review within the almond sector. Distributions per unit (DPU) rose 8% yoy to 9.64 cents, while adjusted total assets surged 44% yoy to $588 million. The group expects DPU to enhance 4% to 10.03 cents for fiscal year of 2018. The group sees more opportunity to expand the fund, especially in the cattle and cotton sectors which has the potential to grow while maintaining productivity and value. We recommend a “Hold” on the stock at the current price of $ 2.10



RFF Daily Chart (Source: Thomson Reuters)

Cedar Woods Properties Ltd

CWP Details

Delivered a decent bottom line growth: Cedar Woods Properties Ltd (ASX: CWP) reported a decent bottom line (net profit) growth of 4.2% yoy to $45.4 million for fiscal year of 2017 while declared a fully franked final dividend of 18.0 cents leading to a total fully franked dividend of 30.0 cents for FY2017. The group reported that their new projects would contribute to their earnings in FY2018 and FY2019 in Melbourne and Perth. CWP built strong presales which rose 40% yoy to $260 million, while the same would be settling in FY2018 and FY2019. The shares of CWP rose over 2.5% on August 22, 2017; and given the prospects, we maintain a “Buy” on the stock at the current price of $ 5.20



CWP Daily Chart (Source: Thomson Reuters)

Northern Star Resources Ltd

NST Details

Rise in net profit: Northern Star Resources Ltd (ASX: NST) has reported that their net profit after tax surged 42% yoy to A$215.3 million for FY17 and this rise is majorly driven by A$26.4 million profit on the Plutonic sale and is partly boosted by gold price movement. The group invested A$130 million to enhance production to 600,000ozpa in 2018 from organic sources. EBITDA rose 16% yoy to A$461.3 million while EBITDA margin reached 52% against 45% in the prior corresponding period. The group enhanced their final dividend by 50% to 6 cents per share. However, given the risks related to commodity price movement and conditions wherein the stock is already trading at higher levels, we maintain our “Expensive” recommendation at the current price of $ 4.98



NST Daily Chart (Source: Thomson Reuters) 

Aconex Ltd

ACX Details

Reported a mixed result: Aconex Ltd (ASX: ACX) expects a decent revenue growth of 15-19% for fiscal year of 2018 and expects revenue growth of more than 20% with rising EBITDA for the medium term. The group has reported a strong rise of 31% yoy in overall revenue to $161.2 million, while EBITDA from core operations, surged 10% to $15.0 million (excluding acquisition and integration costs and foreign currency gains and losses) for FY17. International revenue surged 45% driven by total contribution from Conject (54% on a constant currency basis).

 

Strong international performance (Source: Company reports)
 
Still the stock lost over 7.7% on August 22, 2017 owing to some concerns over their cash position, which fell to $33.9 million from $52.5 million. Moreover, the group is aiming to enhance their investment in product, sales, marketing and client service for growth which could pose further pressure on the cash. We maintain an “Expensive” recommendation on the stock at the current price of $ 4.14



ACX Daily Chart (Source: Thomson Reuters)

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