A2M jumps despite profit fall, Tech weighs: ASX closes 0.2% higher

Market Reports

by Lauren Evans

After a weak start, the Australian sharemarket rallied in the afternoon session following the news at lunchtime that US President Joe Biden and Russian President Vladimir Putin have agreed to meet, which eased some fears of an imminent invasion of Ukraine. With the reporting season in full swing today, seven out of eleven sectors closed in positive territory. Utilities dominated as the best performer, followed by consumer staples, while technology weighed. 

A2 Milk’s (ASX:A2M) profit halved in the first six months of the financial year as China’s demand for infant-formula fell amid the country's declining birth rate. The company’s revenue fell by 2.5 per cent to $616.4 million (NZ$660.5 million), while profit declined 50.3 per cent to $55.6 million (NZ$59.6 million). EDITDA tanked 45.3 per cent to $91.1 million (NZ$97.6 million). A2 Milk did not declare an interim dividend. Shares closed 11.1 per cent higher at $5.89, and was the best-performing stock.

AGL Energy (ASX:AGL) rejected a joint bid from the founder of software giant Atlassian Mike Cannon-Brookes and Canadian asset management giant Brookfield to take control of the company. Shares closed 10.6 per cent higher at $7.96, and was the second-best stock

Endeavour Group (ASX:EDV) posted its half year results for the 27 weeks ending January 2. The alcohol company's net profit after tax of $311 million was up 15.6 per cent from the prior year period, despite Covid-19 lockdowns. Revenue was down 0.3 per cent to $6.3 billion, while EBIT lifted 3.2 per cent to $556 million. Shares closed 10.3 per cent higher at $7.18, and was the third-best stock.

Major banks closed higher except Macquarie (ASX:MQG) down 0.2 per cent to $190.71. Westpac (ASX:WBC) led, up 1.4 per cent to $23.85, National Australia Bank (ASX:NAB) added 0.6 per cent to $30.75, Commonwealth (ASX:CBA) rose 0.4 per cent to $98.09 and ANZ Bank (ASX:ANZ) closed 0.07 per cent higher at $28.17.

Gold stocks closed higher, led by Evolution Mining (ASX:EVN) up 1.9 per cent to $4.22. Northern Star (ASX:NST) added 1.4 per cent to $9.71 and Newcrest Mining (ASX:NCM) closed 0.9 per cent higher at $24.57.

Energy stocks finished mixed. Woodside Petroleum (ASX:WPL) rose 2.7 per cent to $28.19, Santos (ASX:STO) fell 1.9 per cent to $6.87 and Beach Energy (ASX:BPT) closed 0.7 per cent lower at $1.48.

Fortescue Metals (ASX:FMG) weighed on iron ore players, down 1.2 per cent to $19.61. While Rio Tinto (ASX:RIO) rose 0.8 per cent to $120.20 and BHP (ASX:BHP) closed 0.6 per cent higher at $48.24.

Elsewhere, payments company Tyro Payments (ASX:TYR) posted its half year results for the six months ending December 31, a period impacted by Covid-19 lockdowns. Its normalised gross profit rose 11.3 per cent to $68 million, and its transaction value lifted 31 per cent. Revenue rose 30 per cent to $149.2 million and its EBITDA of $2.8 million was down from $8.5 million the prior year. Shares closed 25.9 per cent lower at $1.61, and was the worst-performing stock.

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At the closing bell, the S&P/ASX 200 was 0.2 per cent or 12 points higher at 7,234
 
Local economic news

The flash purchasing managers’ index for February was released.

Australia composite output Index Feb: 55.9, 8-month high (Jan final: 46.7).
Australia services business activity index: Feb: 56.4, 8-month high (Jan final: 46.6).
Australia manufacturing output index Feb: 52.5, 2-month high (Jan final: 47.5).
Australia manufacturing PMI Feb: 57.6, 2-month high (Jan final: 55.1).

The report said the easing of the Covid-19 Omicron wave enabled Australia’s private sector to return to growth in February. Private sector output and demand both expanded after shrinking at the start of the year, leading to higher employment levels. Supply constraints persisted, causing the accumulation of backlogged work and the worsening of price pressures with output price inflation rising to a record. Meanwhile business optimism improved in February.

Company news

Electronic design software company Altium (ASX:ALU) has posted its half year results for the six months ending December 31. The company’s revenue rose 27.8 per cent to $142 million ($US102.2 million) while EBITDA lifted 28.9 per cent to 48.3 million ($US34.8 million) and net profit after tax lifted 37.7 per cent to $31.9 million ($US22.9 million). Shares closed 5.9 per cent higher at $32.44. 

Reliance Worldwide (ASX:RWC) released its half year results for the six months ending December 31. Its net profit after tax fell by 3.3 per cent to $88.3 million (US63.7 million), while its revenue rose 12.4 per cent to $727.3 million (US 521.8 million) and its adjusted EBITDA lifted 5 per cent to $174.9 million ($US125.5 million). Shares closed 0.8 per cent higher at $5.13. 

Nib (ASX:NHF) also delivered its half year results for the six months ending December 31. The company’s revenue rose 7 per cent to $1.4 billion, while profit climbed 25 per cent to $81.4 million. Shares closed 0.2 per cent lower at $6.63. 

Futures

The Dow Jones futures are pointing to a rise of 174 points.
The S&P 500 futures are pointing to a rise of 24 points.
The Nasdaq futures are pointing to a rise of 62 points.
The SPI futures are pointing to a flat start when the market next opens.

Best and worst performers

The best-performing sector was Utilities, up 3.7 per cent. The worst-performing sector was Information Technology, down 2.7 per cent.

The best-performing stock in the S&P/ASX 200 was The A2 Milk Company (ASX:A2M), closing 11.1 per cent higher at $5.89. It was followed by shares in AGL Energy (ASX:AGL) and Endeavour (ASX:EDV).

The worst-performing stock in the S&P/ASX 200 was Tyro Payments (ASX:TYR), closing 25.9 per cent lower at $1.61. It was followed by shares in PointsBet Holdings (ASX:PBH) and Super Retail Group (ASX:SUL).

Asian markets

Japan's Nikkei has lost 0.7 per cent.
Hong Kong's Hang Seng has lost 0.7 per cent.
China's Shanghai Composite has lost 0.4 per cent.

Commodities and the dollar

Gold is trading at US$1891.81 an ounce.
Iron ore is 2.2 per cent higher at US$133.50 a ton.
Iron ore futures are pointing to a rise of 1 per cent.
Light crude is trading $0.33 lower at US$89.88 a barrel.
One Australian dollar is buying 72.16 US cents.

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