Local shares started the session in much the same way they ended a day earlier with sellers gaining the upper. Although in broad terms, lack of conviction on the part of buyers and sellers saw the the ASX 200 restricted to a narrow range for much of the morning. This reflected the fact that the US financial markets were closed on Monday for the Presidents Day holiday. With Wall St closed, European markets acted as a proxy for investor sentiment. To that end European stock indices hit record highs during the session helped by the latest efforts on the part of Chinese authorities manage the economic impact of the Coronavirus outbreak.
In sector terms Technology names led the declines, reflecting a 15% fall in Altium (ALU) shares the artificial intelligence reported a 1H net Profit of U $23.1 million, a fall of 1.5% compared to the same time last year. Although ALU said the group’s full-year performance will likely be at the lower end of guidance, reflecting the impact of the coronavirus outbreak. Materials names were the most improved, helped by 1% gains for Rio Tinto (RIO) & Fortescue Metals Group (FMG).
In company news, hearing implant maker Cochlear (COH) reported a first half net profit after tax (NPAT) of $157.7 million , marking an increase of 23% on the previous corresponding period (pcp) a result that in included $25 million in non-cash gains. Underlying net profit of $132.7 million was in line with the same time last year (flat in constant currency). COH said that net profit did not benefit from the lower Australian dollar due to currency hedging – with foreign exchange contract losses of $21.9 million in the half. As a result, profit growth was the same in both reported and constant currency. Sales Revenue rose by 9% to $777.6 million with Cochlear implant revenue up 14%, Services revenue up 9% and Acoustics revenue down 9%. COH declared an interim dividend increase of 3% to $1.60 per share. The group re-iterated its recently revised earnings guidance, with strong cochlear implant growth to be partly offset by the impact of the coronavirus on sales in Greater China; FY20 net profit is expected in the region of $270-290 million, a 2 to 9% increase on underlying net profit for FY19 compared to a range of $290-300 million previously.
BHP shares were 1% or 41 cents higher at $38.88 after reporting first half results. The miner said net profit rose by 29% to US$4.868 billion, with the result being boosted by a lift in the iron ore price. The average realised price was 41% higher in the period at US$78.30 per tonne compared to the same time last year. Higher average realised prices for iron ore and copper, were balanced by lower average realised prices for metallurgical coal, petroleum and thermal coal. Revenue rose 7% to US$22.3 billion, while underlying EBITDA rose 15% to US$12.1 billion. BHP increased its dividend from a fully franked 55 US cents a year ago to 65 US cents. In offering its outlook the miner highlighted that ‘if the Corona Virus outbreak is not demonstrably well contained within the March quarter, we expect to revise our expectations for economic and commodity demand growth downwards’.
Manufacturer of protective industrial and medical gloves Annsell (ANN) reported a 3.5% increase in NPAT (+19.7% constant currency (cc)) to US$65.8 million. Revenue in the same period rose 3.9% (+5.3% in cc) to US$753.3 million. ANN sees the coronavirus crisis having positive and negative effects operations. ANN said it is supporting Chinese authorities to provide significant amounts of personal protective equipment (PPE) which has increased demand for these products. Although, negative effects due to broader external plant shutdowns in the manufacturing sector, decreased manufacturing production, lower stock levels and potential supply chain disruption may have adverse implications for ANN customers. Overall, ANN anticipates the coronavirus crisis will have a minimal net impact to FY financial results. ANN declared an interim dividend of US21.75¢, an increase of 4.8% compared to the same time last year and expressed confidence that for FY20 the group will deliver increased dividends reflecting sustained cash flow generation. ANN shares were at $30.93 for a loss of 4% or $1.42 a sort time ago.
Published by CommSec