ASX 200 Industrials down by 81 points; A Quick look at four Industrial Sector Stocks

  • Jan 28, 2020 AEDT
  • Team Kalkine
ASX 200 Industrials down by 81 points; A Quick look at four Industrial Sector Stocks

The Australian economy has kick-started new year with a series of positive economic developments including retail sales, trade surplus, dwelling approvals, property prices and unemployment data. ASX is currently flooded with business updates across the sectors. Today, various industrial sector players released their ASX updates. Notably S&P/ASX 200 Industrials (Sector) was down by 81 points during today’s trade.

Let us look at some trending updates released on ASX today-

Bingo Industries Limited (ASX: BIN)

Australia’s recycling and waste management company, Bingo Industries Limited is part of investigation done by Australian competition watchdog ACCC which is looking into the matters of Building and Demolition (B&D) waste sector in New South Wales.

In an update provided on 28 January 2020, Bingo informed that Australian Competition and Consumer Commission (ACCC) is conducting an investigation into the Building and Demolition (B&D) waste sector in New South Wales.

“We will continue to be transparent and co-operative in our dealings with the ACCC, our shareholders and all our stakeholders” commented Bingo’s Managing Director and CEO, Daniel Tartak while announcing the news.  In addition to this, the company has reaffirmed its FY20 underlying EBITDA guidance range of $159 - $164 million.

During today’s intraday trade, Bingo’s stock price moved slightly up by 0.351% to close at $2.860. BIN stock is currently trading very near to its 52 weeks high price of $3.095. Notably, in the last three months, BIN stock has provided a return of $18.26% to its shareholders.

Emeco Holdings Limited (ASX: EHL)

Leading credit rating agency Moody’s Investors Service has upgraded Emeco’s corporate family and senior secured debt ratings to “B1” and has changed outlook on all ratings to stable from positive, reflecting improvement in the company’s credit profile, supported by improved earnings and margins that are facilitating ongoing deleveraging.

As per Moodys press release, Emeco’s improved earnings reflect the improvement in the Australian mining equipment rental market and the earnings accretive acquisitions that have been carried out over the last 18 months.

Emeco’s securities were put in Trading Halt today at the request of the company as it expects to release an announcement in connection with a proposed acquisition and capital raising comprising an entitlement offer of ordinary shares on a pro rata basis to existing shareholders.

Few days back, the company had responded to a media speculation wherein it confirmed that it is exploring opportunities to add value to the Emeco Group and its shareholders on an ongoing basis and that it is in compliance with ASX Listing Rule 3.1. EHL stock last traded at a market price of $2.300 with a market cap of around $743.39 million.

Air New Zealand Limited (ASX: AIZ)

Airline company Air New Zealand has provided an update on other significant items that will be reflected in the airline’s reported financial results for the 2020 financial year.

The company is expecting to report three components within other significant items:

  • A gain of around $21 million resulting from the partial sale of airport slots at London’s Heathrow Airport to an undisclosed party, following the 23 October 2019 announcement of the airline’s withdrawal from the Los Angeles to London route. The remaining sale of airport slots is expected to be recognised in the airline’s 2021 financial year for a value of approximately $21 million, bringing the total value for the transaction to approximately $42 million;
  • Reorganisation costs in the range of $20 million to $25 million resulting from business transformation activities previously communicated by the airline in March and August 2019 as part of its two-year cost reduction programme, as well as expected costs associated with the withdrawal from the Los Angeles to London route;
  • A non-cash accounting charge of approximately $46 million resulting from the disestablishment of certain USD denominated debt as fair value hedges.

A summary of the expected reporting for the above items is provided in the table below:

(Source: Company Reports)

Guidance

  • Air New Zealand has amended its earnings guidance definition for the current financial year to make it clear that these items are not included in the earnings guidance numbers;
  • The company is targeting earnings before other significant items and taxation in the range of $350 million to $450 million;
  • Based upon current market conditions and assuming an average jet fuel price of US$75 per barrel, the company is expecting its earnings before taxation to be in the range of $350 million to $450 million.

Last month, the company opened a refurbished domestic lounge at Wellington Airport and opened a new regional lounge in Nelson. A new triple in size regional lounge was also opened in Auckland in November 2019.

At market close on 28 January 2020, AIZ stock was trading at a price of $2.790, down by 3.125% intraday, with a market cap of $3.23 billion.

NRW Holdings Limited (ASX: NWH)

Leading diversified provider of contract services NRW Holdings Limited has informed about an accident that happened on 27 January 2020, resulting in the death of one of its employees.

Further one employee, of NRW’s wholly owned subsidiary DIAB Engineering Pty Ltd (DIAB), sustained serious injuries following an accident at the Roy Hill Iron Ore Mine in Western Australia and he was subsequently flown by the Royal Flying Doctor Service to Perth for treatment in hospital but tragically died of his injuries last night. The company has reaffirmed that its number one priority is the safety and well-being of its workforce and it has extended its support to the worker’s family and his colleagues.

Following the release of this news, NWH stock price decreased by over 7% on ASX. Excluding today’s impact, NWH’s stock has provided a return of 43% to its shareholders. At market close on 28 January 2020, NWH stock was trading at $3.120.

Last month, the company’s recently acquired BGC Contracting was awarded an infrastructure contract with Fortescue Metals Group at its Eliwana Mine and Rail project to support the development of 143km of rail for the Eliwana project.


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