The first major week of February’s earnings season offered investors an insight into how some of the largest businesses on the bourse have weathered the COVID storm.
Investors would be heartened by the resurgence of dividends at Commonwealth Bank and Telstra’s bullish earnings targets, but in sectors such as energy and retail tough conditions continue. Here’s what you need to know about the key results this week.
Commonwealth Bank of Australia
NPAT: $3.9 billion
Dividend: $1.50 per share, fully franked
Investors would have been relieved as the bank boosted its interim dividend to $1.50, with fund managers suggesting further jumps in payouts could be on the horizon. Net profit dropped 11 per cent on a year earlier, with the result helped by customers on loan repayment holidays resuming their payments.
NPAT: $1.1 billion
Dividend: 8¢ per share
Earnings fell at the telco giant due to a $170 million hit from COVID-19, along with large payments to NBN Co. Chief executive Andy Penn had a positive message for investors, however, with upbeat earnings targets as the telco prepares to reap the benefits of its T22 restructure program. Penn said underlying earnings would be between $7.5 billion and $8.5 billion by 2023, above consensus forecasts.
Statutory loss: $2.3 billion
Dividend: 31¢ dividend, 10¢ special dividend
The energy giant’s shock $2.7 billion in writedowns last week swung AGL to a $2.3 billion loss for the half, with chief executive Brett Redman warning lower wholesale energy prices will have a sustained impact on the business.
A major shake-up of the energy giant’s structure could be on the cards, with the company telling investors it is “assessing” its business model and will provide more details to investors in March. Analysts agreed that energy market conditions will make things tough for the business for some time. “We think AGL is a difficult investment proposition right now,” RBC Capital markets analyst James Nevin said.
NPAT: $177 million for 2020
AMP shares lost 11 per cent on Thursday, with news that US investment firm Ares had pulled its takeover bid for the company. Shareholders remained unimpressed when the company revealed full year financials, revealing assets under management had declined throughout the year. Chief executive Francesco De Ferrari said he was determined to “stay the course” on the firm’s turnaround plan. Shares have declined 25 per cent over the past 12 months.
Westfield (Unibail Rodamco)
NPAT: Recurring profit €1.06b ($1.6b)
The European retail empire that took over Frank Lowy’s international Westfield business in 2017 told investors it won’t pay a dividend until 2023 as it grapples with the long-term impacts of the pandemic on international retail. Unibail Rodamco, which is based in France but has a dual listing on the ASX, reported a 40 per cent drop in recurring profit to €1.06 billion and will exit its US business in the coming year.
Asset values across the company’s network fell 11 per cent, with Macquarie analyst Stuart McLean observing “we anticipate continued asset value declines from here”.
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Source: Thanks smh.com