Appen tanks, Qantas takes-off, Woolies rises, ASX trading 0.6% lower at noon

Market Reports

by Melissa Darmawan

The Australian sharemarket has taken a breather after its three-day winning streak as the rush in reporting season continues. Only Consumer discretionary and Communication Services are marginally higher, up 0.5 per cent and 0.3 per cent respectively while the biggest drag is Utilities, down 1.5 per cent. All sectors are in the red. Here’s a helicopter view of the results so far.

Investors are dumping their positions in artificial intelligence company Appen (ASX:APX) after they flagged that there will be “moderate” expense growth along with a reduced FY22 EBITDA outlook. The reaction came after they reported a profit of $6.7 million, more than half from the $14.9 million last year. Shares are pressuring the local bourse as they are trading over 17.6 per cent lower at $11.39.

The A2 Milk company (ASX:A2M) is curdling lower by 7.8 per cent at $6.32. The embattled infant milk formula company’s profit dived by over 79 per cent shaking the company’s outlook which is undergoing “strategic review”.

Dan Murphy’s and BWS operator Endeavour Group (ASX:EDV) are skating lower by 0.9 per cent at $7.14 after chief executive Steve Dononhue said that “the recent covid-19 trading restrictions, which began in June, make it extremely difficult for us to forecast with any degree of certainty how our businesses will perform over the next 12 months”. The pubs and pokies operator announced their first dividend after spinning off from Woolies this year.

The flying kangaroo Qantas (ASX:QAN) are taking off, up 2.5 per cent at $4.99 despite reporting a $2.35 billion loss for the 2021 financial year as the Covid-19 pandemic restrictions kept them wrestled to the ground. The airline improved from the $2.7 billion loss last year. Meanwhile, investors enjoyed the news on the carrier’s outlook to resume international flights by the end of the year.

Woolworths (ASX:WOW) unveiled a $2 billion share buy back and boosted their dividend by 14.6 per cent to 55 cents after a bumper year, thanks to the spin-off of Endeavour Group and the panic buying as people were cooped up at home due to the Covid-19 pandemic. Net profit clocked in 22.9 per cent higher at $1.9 billion. Share are trading 1.2 per cent higher at $41.32.

IOOF Holdings (ASX:IFL) are trading 3.7 per cent lower at $4.89 after their profit for their financial year 21 jumped 19 per cent at $147.8 million from a year ago. However, they booked a statutory loss of $143.5 million attributed to non-cash good-will write downs and the ending of grandfathered revenue and costs linked to the MLC purchase.

Whitehaven Coal (ASX:WHC) had a jumpy start, now trading over 4.5 per cent higher at $2.32 after falling at the open despite the miner reporting deep red figures. They suffered a 9.6 per cent drop in revenue to $1.56 billion, and a net loss of $543 million for the financial year failing to capitalize on the price of coal.

Link (ASX:LNK) are deep in the red, down 10 per cent at $4.64 after posting a 56 per cent loss of $163.4 million for the financial year. Revenue fell 6 per cent.  The company attributes their revenue from member growth in the Retirement and Superannuation Solutions. The successful IPO of PEXA (ASX:PXA) helped Link bank $180 million of cash proceeds from the IPO. 

Flight Centre (ASX:FLT) shares are taking off, up 2.8 per cent at $16.82 after posting a decline in revenue of 79.1 per cent to $396 million for the financial year. The flight booker reported a $507 million underlying loss, in line with market expectations while FLT’s tax statutory losses improved to $602 million, up from $848.6 million of losses from a year ago. 

Vitamins provider Blackmores (ASX:BKL) are trading 6.8 per cent higher at $85.21 after their revenue jumped 1.3 per cent to $575.9 million for the financial year 2021. Revenue fell 14 per cent for their Aussie segment. The reverse was seen in China where it jumped 27.8 per cent. This helped push their EBITDA for their business in China to $14.3 million up from $200,000 in the prior period.

Gold miner St Barbara (ASX:SBM) are drilling 2.1 per cent lower at $1.54 after posting a loss of $177 million for the financial year 2021. Their underlying profit came in at $81 million. The fall in revenue was a result of lower production at its Leonora and Simberi projects. 

Import and logistics service provider Qube Holdings (ASX:QUB) are trading 2.3 per cent lower at $2.98 despite their net profit after tax coming in 4.7 per cent higher to $91.6 million for the financial year 2021. Just last month, they entered into an agreement to spin off their assets at the Sydney logistics park to LOGOS Property Group, part of the LOGOS Consortium.  

At noon, the ASX 200 is 0.6 per cent or 42.8 points lower at 7,489. The SPI futures are pointing to a fall of 48 points.
Local economic news

New capital expenditure rose by 4.4 per cent for June quarter as per the Australian Bureau of Statistics. Buildings and structures rose by 4.6 per cent while equipment, plant and machinery rose by 4.3 per cent.

Between the weeks ending 17 and 31 July this year, payroll jobs dipped by 2.0 per cent and total wages paid fell by 2.7 per cent.

Company news

The A2 Milk's (ASX:A2M) outlook is in a “strategic review” following a year which saw the embattled infant milk company’s profit dive by over 79 per cent.

Best and worst performers

The best-performing sector is Consumer Discretionary, up 0.3 per cent. The worst-performing sector is Utilities, down 1.4 per cent.

The best-performing stock in the S&P/ASX 200 is Blackmores (ASX:BKL), trading 6.8 per cent higher at $85.21. It is followed by shares in Whitehaven Coal (ASX:WHC) and Iluka Resources (ASX:ILU).

The worst-performing stock in the S&P/ASX 200 is Appen (ASX:APX), trading 17.6 per cent lower at $11.39. It is followed by shares in Link Administration Holdings (ASX:LNK) and The A2 Milk Company (ASX:A2M).

Commodities and the dollar

Gold is trading at US$1790.12 an ounce.
Iron ore is 1.7 per cent higher at US$148.66 a ton.
Iron ore futures are pointing to a rise of 1.35 per cent.
One Australian dollar is buying 72.63 US cents.

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