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COVID-19, which initially targeted Wuhan city in China in December 2019, has so far infected over 180,000 people worldwide, resulting in a horrifying death toll of more than 7,100 people so far. Even in Australia, the deadly virus has been found positive in over 370 people till date since January 2020. What’s more frightening is that the coronavirus cases seems to be almost doubling in every three days in the nation.
Besides taking a toll over the lives of individuals, the coronavirus pandemic has weighed heavily on the Australian equity market, which has been facing huge selling pressure for the last few days in an effort to evade potential losses. Most of the stocks remained in red territory, especially during the last week, owing to negative investor sentiment.
However, the equity market appears to be reviving after a massive downfall, as depicted by the S&P/ASX 200 index, which surged by ~5.8 per cent on 17th March 2020. The gains in the benchmark index were supported by several announcements, which induced positive investor sentiments amidst market uncertainty.
Given this backdrop, let’s scroll through two such companies, which have recently announced their business updates to the market, in response to the current market conditions:
Select Harvests Reports Favourable Almond Market Conditions in Australia
One of the world’s largest vertically integrated almond business operator, Select Harvests Ltd (ASX:SHV) has reported the existence of favourable market conditions in Australia for the almond crop.
The Company notified that the Australian Almond Board has released the Australian January Export shipment report, revealing a surge of 40 per cent in the month on month shipments during the period Mar’19 to Jan’20. The report also highlighted an increase of 26 per cent in YTD shipments for the period.
In addition, the Company mentioned that the domestic and export shipment report released by the Californian Almond Board for the period Aug’19 to Feb’20 underlined that the 2019 crop will be about 2.55 billion pounds. The board also reported a rise of 7.9 per cent in the month on month shipments and 5 per cent in YTD shipments, declaring Feb’20 shipments as record results.
The Company added that the world demand from domestic customers and major almond importers still remains strong. Moreover, the Chinese customers have also commenced production post the closure of extended Lunar New Year in the wake of coronavirus.
The Company’s 2020 harvest is advancing very well, and its 2020 crop is more than 65 per cent committed for sale at prices within the range of $8.00 - $8.50/kg. The Company expects export shipments of the 2020 crop to begin within April.
It is worth noting that Select Harvests has so far continued to focus on its competencies of marketing and growing almond and almond products, delivering operating efficiencies and increasing orchard yields. The Company recorded the following results for its Almond Division in FY19:
- A substantially higher almond volume of 22,690 tonnes, up 44.5 per cent on last year.
- Improved growing cost per kilogram, down 21.4 per cent on last year.
- Lower processing cost per kilogram, down 16.6 per cent on last year.
- A rise of 6.8 per cent in almond price to $8.6 per kg.
- An increase of $46.8 million in Almond EBIT to $82.2 million.
Take a look at the Company’s key financial highlights for FY19:
SHV ended the day’s trade at $6.17 on 17th March 2020, with a significant rise of about 15.5 per cent.
Wisr’s Seems Well-Positioned to Adjust to Changing Economic Conditions
Australia’s first neo-lender, Wisr Limited (ASX:WZR) has recently declared that its business model is well positioned to rapidly adjust to changing economic conditions like the evolving COVID-19 situation.
The Company reported an acceleration in loan volume, with more than $31.6 million in loans written in 3rd quarter of FY20 to 13 March 2020, at an average credit score of 706, which bolsters the prime nature of its high-quality and credit customers. It is on track to deliver quarter-on-quarter loan volume growth of 15 to 25 per cent in Q3 FY20.
In its latest business update, the Company mentioned that it is very well capitalised with cash worth $10.2 million at 31st December 19 and raised capital of $36.5 million in January 2020. Its strongly endorsed Jan’20 capital raise has now been finalised, with Tranche 2 of about 89 million shares to be issued subsequent to a successful vote at the shareholder meeting.
With strong support from funders, the Company’s loan warehouse facility has now drawn to $80 million, a rise on the initial $50 million after going live in mid-November 2019, giving it significant lending runway. Expandable to $200 million, the facility has left significant headroom.
The Company has also undertaken a range of measures and actions to adjust and prepare rapidly to any change in the economic outlook. For instance, in response to the COVID-19 situation, it has recently announced an “all-of-company” work from home day on 12th March 2020, with no disturbance to normal business operations. Moreover, it is conducting a review of credit policy and proprietary decision engine rules in accordance with changes to economic projections and expected COVID-19 impacts.
Praising the firm for its robust business model, Wisr CEO, Mr Anthony Nantes, commented:
WZR ended the day’s trade at $0.100 on 17th March 2020, with a significant rise of about 51.5 per cent.
