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Let’s do a speed-run through some of the bigger names reporting 1H FY24 reports today.
BHP Group (ASX:BHP)
BHP actually reports on February 20, but given it’s Australia’s biggest stock, I’m starting here.
The company issued a warning today, telling investors to brace for serious re-valuation of its nickel assets.
Nickel mines across the country have been shuttered, mothballed, or curtailed, as nickel prices absolutely tank. Indonesia now produces 1Mtpa+ and nobody really knows how to counter that.
“This is an uncertain time for the Western Australia nickel industry and we are taking action to address the current market conditions,” BHP CEO Mike Henry said.
“We are reducing operating costs at Western Australia Nickel and reviewing our capital plans for Nickel West and West Musgrave.”
A statement that oozes confidence. We’ll circle back to this on the 20th.
Wesfarmers (ASX:WES)
Wesfarmers, the everything company (former agriculture giant) that owns Bunnings, K-Mart, and Officeworks, could have a decent run, though, posted largely flat metrics pcp.
- Revenue: $22.6 billion (up 0.5 per cent pcp)
- Dividend: 91 cents (vs 88 cents pcp)
- Operating cash per share: $2.56 (vs $1.74 pcp)
- Outlook: “For the first five weeks of the second half of the 2024 financial year, Kmart Group has continued to deliver strong sales growth … Bunnings [and Officeworks] remained broadly in line with results for the first half … Domestic cost pressures in Australia and New Zealand are expected to remain elevated … [the company is] monitoring ongoing pressures in international supply chains and key shipping routes.”
Origin Energy (ASX:ORG)
Origin Energy is absolutely set to be a winner of this reporting season. The company has benefitted from higher wholesale gas prices, more gas produced, more sales, and overall better strategy. Check out some of these numbers:
- Statutory profit: $995 million (vs. $399 million pcp)
- Interim dividend: 27.5 cents (vs. 16.5 cents pcp)
- Earnings per share: 57.8 cents (vs 23.2 cents pcp)
- Outlook: “We expect Origin’s strong first-half performance to carry over into the second half and this is reflected in improved guidance for Energy Markets EBITDA for FY2024.”
South32 (ASX:S32)
Uh-oh. South32 has posted among the weakest results from the mining majors yet. Truth be told, the exact story of what’s gone on here isn’t immediately clear, though, the company does insist that one read its 1HFY24 report in conjunction with a release from 2023.
Sure, we’re all gonna do that. The company has also cancelled a share buy-back plan. Uh-oh.
- Underlying revenue: US$3.88 billion (vs US$4.52 billion pcp; down 14 per cent)
- Profit after tax: US$53 million (vs US$685 million pcp; down 92 per cent)
- Underlying earnings: US$40 million (vs US$560M pcp; down 93 per cent)
- Dividend: 0.4 cents (vs 4.9 cents pcp; down 92 per cent)
- Outlook: “Looking forward, we remain focused on driving operating performance and cost efficiencies across our business. This focus, combined with our expected 7 per cent production uplift in the second half, places us in a strong position to capture higher margins as market conditions improve.”
Telstra (ASX:TLS)
The love-them-or-hate-them telecom (mostly hate) has posted its 1H FY24 results today, with good news on the whole.
- Net profit after tax: $1 billion (up 11.5 per cent vs pcp)
- Earnings per share: 8.4 cents (up 12 per cent vs pcp)
- Interim dividend: 9 cents (up 5.9 per cent vs pcp)
- Outlook: “We have remained disciplined on reducing our costs, particularly considering the external economic environment … We remain absolutely committed to capital discipline … While we’re being challenged by cost pressure, we still expect to achieve the large majority of our cost out ambition by the end of FY25.”
