WESTERN AREAS LIMITED (ASX: WSA) – The company with more than 4,000 meters of planned drilling at the Investigators Prospect, has resumed the diamond drill program at the Mt Alexander Project. Despite the lower sales volume, the EBITDA is up by 62% from FY 17 of A$51.9 million to EBITDA of A$84.0 million. The company’s cash at bank stands at A$ 151.6 million, with zero or no debt. The full year underlying NPAT is of A$11.8 million for FY 18. With 67,236 tons of ore at an average grade of 3.9% nickel for 2,625 nickel tons, production was best and represented the highest quarter production timeframe for FY18. The nickel prices that have soared above 50% in last one year benefitted the group. Within the FY18 guidance range provided, year to date unit cash cost of production was A$2.63/lb (US$2.03/lb). The company’s stock price as at September 3, 2018 is $2.430 down by -6.43%. The share market has undergone mixed performance across the sector.
BELLAMY’S AUSTRALIA LIMITED (ASX: BAL) – Bellamy’s has recently provided full year revised underlying segment EBITDA of $49,369,000 which is adjusted in Elims. The company recently announced full year results posting 37% increase in sales and 65% growth in normalized EBITDA, for the period ended 30 June 2018. Compared to $0.8 million net loss reported last year, the company reached to $42.8 million of net profit after tax, despite tough market conditions. The stock was down around 5% while negative sentiments are on the rise and regulatory uncertainties from Beijing, China hover around the group. Bellamy’s efforts to maintain strong growth continue with sales increasing up to 37% and EBITDA increasing up to 65%. The company has $88 million cash in hand with no debt and has also made $39 million in FY 2018 supply-chain investments. The company’s gross margin improved by 5.8% in 2H 2018. The company’s stock price as at September 3, 2018 is $10.410 down by -5.7%. The share market has undergone mixed performance across the sector.
RIO TINTO LIMITED (ASX: RIO) – Driven by higher pricing and increased volumes, the underlying EBITDA has increased from $9.0 billion in H1 2017 to $9.2 billion in H1 2018. The company is under no pressure from market or shareholders with regards to chasing M&A opportunities and says that in the next 5 years the miner might not buy anything big. Another focus was potential aluminum expansion and productivity and costs across all its business units for the miner. RIO continues to expect that the market demand would outperform the global GDP growth. The stock was trading at a market price of $72.035 and has undergone a performance change of over 7.22% over the past 12 months. This plunge could be attributed to the US class action which was launched against RIO and executives over the Guineagate affairs. The most recent dividend is 170.84c which is payable at September 20, 2018.
TELSTRA CORPORATION LIMITED (ASX: TLS) – There is an increase in competition from the recent merger talks of $15 billion, of TPG Telecom and Vodafone Hutchison which can take the market dominance from Telstra. Telecommunication giant Telstra failed to achieve the EBITDA threshold performance, as it declined to $10.12 billion in FY 18 from $10.67 billion in FY 17. On the other hand, total income grew 3% to $29.0 billion for the 12 months ended 30 June 2018, which is mainly attributable to significant growth in its mobile and fixed broadband customers. However, the company announced reduced net profit after tax of $3.5 billion for the year ended 30 June 2018. Due to nbn rollout and lower average revenue per user, this reflects a decline of 8.9% on previous year NPAT. As per the latest release, there are 4 senior members who will leave the company this year, and these include Warwick Bray, Stephen Elop, Will Irving and Joe Pollard. The company’s stock price as at September 3, 2018 is $3.030.
FORTESCUE METALS GROUP LTD (ASX: FMG) – The company’s revenue was below the market expectations at $US 6.89 billion while net profits were also below the consensus at $US 879 million, encountered in 2017-18, this is due to the wider than expected iron ore price penalties. There has been a significant reduction in its net debt in last five years and is at around $US 3 billion as at FY17. The aim is to reach a state of no debt repayments until 2022 with work towards the balance sheet. As at Q3 of 2018, FMG’s net debt has been reported around US $3.1bn while interest savings are of US$130mpa and shipped C1 costs have been US $12.43/wmt. For half year 2018, the group’s NPAT was US $681m with cash on hand of about US $892m. The interim dividend was a payout of 40% with US $0.22 as earnings per share. The group is trying to gain efficiency in managing operations to have better margins, and its free cash flows have been lowered. The company’s stock price as at September 3, 2018 is $3.700.
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