Protective products maker Ansell has reaffirmed its 2019-20 guidance and confirmed that the coronavirus has lifted demand for its goods, but cautioned about it being a long term trend.
In an update to the ASX yesterday, Ansell said it was “experiencing very strong demand for AlphaTec hand and body protection products which are tested and certified to recognised standards for protection from infective agents”.
It also said there was strong market demand for many of its surgical gloves and single-use examination gloves.
“Given our forward view on order pipeline and how the business is tracking, Ansell is reiterating its fiscal 2020 EPS (earnings per share) guidance range of US112¢ to US122¢. We continually monitor the effect of COVID-19 on our business and will make further updates if necessary,” it told the market.
Ansell shares leapt surging 25% to $29.03 shortly, compared to a 7% rise in the ASX 200.
“Furthermore, and in spite of the unprecedented uncertainties and implications from the unknown extent of the COVID19 pandemic, Ansell still expects to provide fiscal 2021 guidance in August as usual,” it said.
It also emphasised that it was financially sound, with a strong balance sheet including about $515 million of cash and committed undrawn bank facilities available as at the end of February. The company has no significant debt maturities occurring over the next year.
Whilst Ansell said it has seen increased demand for some goods, it said that this impact was likely to be offset by ramifications from COVID-19 including “declining demand for some industrial products, by temporary lockdowns, by export restrictions within the EU and elsewhere, by restrictions imposed to contain the spread of the virus combined with lowered economic growth outlook.”
Ansell also said that with the COVID-19 outbreak changing daily “there is an increasing likelihood of delays and possible disruptions to transport and local distribution”.
Ansell chief executive Magnus Nicolin said keeping its staff and its millions of customers safe was a top priority.
And there was another upbeat statement from iron ore miner, Fortescue Metals.
Fortescue said it’s on track to deliver on its FY20 production guidance despite disruptions caused by attempts to limit the spread of the coronavirus in the Pilbara region.
“While COVID-19 has brought uncertainty and volatility to global markets, including the iron ore market, Fortescue’s shipments continue from Port Hedland as scheduled,” CEO Elizabeth Gaines said in a statement to the ASX on Monday.
“Our mining, processing and shipping activity remains in line with our guidance for 2019-20 of shipments towards the upper end of our guided range of 170 – 175 million tonnes.”
The market has welcomed the update today with FMG shares up 5.2% at $10.10.
Iron ore producer Mount Gibson has earlier warned of weaker sales and higher costs as a result of coronavirus disruptions which shares in the miner slide in early trade on Monday.
“Given the current uncertain business environment and related operating challenges…Mount Gibson has decided to withdraw its sales and cost guidance for the 2019/20 financial year,” the company said in a filing to the ASX.
“While Mount Gibson currently expects improved ore production and sales from Koolan Island in the June 2020 quarter, it is likely that Koolan Island’s sales for the 2019/20 financial year will be below the previous annual guidance for the operation.”
“Consequently, in conjunction with the additional costs expected as part of the Company’s COVID-19 response, Koolan Island’s costs are anticipated to exceed the now-withdrawn guidance.”
The shares fell 6.7% to 69.5 cents.
