A busy old Monday session on the ASX with a bunch of news out from various companies and sectors. Here’s the latest from Beach Energy, Boral, Aurizon and Carsales.com.
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Beach Energy (ASX: BPT) rode the soaring oil price very nicely in the six months to December, reporting a 66% jump in net after tax profit for the period as oil prices soaring 50% in the 12 months.
That big gain in prices enabled Beach to overcome a 15% slump in production in the half year.
The $213 million profit was struck on $786 million in revenue for the half. Beach earned $128.7 million after tax in the year ago period.
Investors ignored a parsimonious dividend policy (another 1 cent a share interim despite the soaring profits) and sent the shares up more than 9.4% on Monday to $1.625.
Beach reported first-half production of 11.02 million barrels of oil equivalent, as well as earnings before interest, tax depreciation and amortisation of $513 million, buoyed by realised oil price of $A113.6 a barrel.
Beach failed to mention that production was down from 13 million barrels in the six months to December, 2020 and it was only the significant escalation in world prices in the past year has allowed beach to avoid suffering financial damage from the 15% fall slide in output year on year.
The more than 50% jump in oil prices in the year to December was the saviour for Beach and its 30% shareholder, Kerry Stokes’ Seven Group Holdings.
Beach said it finished 2021 in a net cash position of $73 million up from $40 million a year ago.
Production and financial guidance for FY22 remains unchanged at 21 to 23 million barrels of oil equivalent, down from 25.6 million in 2020-21.
Beach Energy Acting Chief Executive Officer Morné Engelbrecht said the December half “saw steady progress on Beach’s major growth projects in the Perth and Victorian Otway basins, as well as the Kupe gas plant returning to nameplate capacity.”
“Delivering on this phase of our growth means we are making progress towards our production target of 28 MMboe in FY24,” Mr Engelbrecht said in Monday’s statement.
“We had previously stated FY22 was going to be a pivotal year in Beach’s transformation, and I’m proud of what we have achieved so far.
“This includes our historic LNG agreement with bp and connecting our first Otway offshore wells to the East Coast market.
“Our balance sheet remains in great shape as we retain a net cash position, and we are well placed to deliver on the next stage of our growth agenda.”
Mr Engelbrecht acknowledged that the last year had not been without its challenges but said he was proud of the way the Beach team showed resilience in its pursuit of the company’s growth ambitions.
“Despite the challenges in 2021, it is important to point out that Beach executed a significant portion of its organic growth platform, allowing us to enter 2022 with a solid base to keep delivering and reach our target of 28MMboe in FY24,” Mr Engelbrecht said.
“The second half of FY22 remains a busy period with activity across the portfolio, and we are looking forward to the forthcoming Western Flank oil exploration campaign – in which any success would sit above our base- case target.”
Beach is currently undertaking an extensive international search for a new Chief Executive Officer.
The Beach board said in Monday’s statement “it has full confidence in Mr Engelbrecht to oversee the company’s growth agenda, while the thorough search process is conducted in order to find the best possible candidate.”
No sign that the low interim payout would be lifted if earnings continue to rise, as they look like doing with global prices now closing on $US100 a barrel (against just over $US76 a barrel for US crude at the end of 2021 and $US79 a barrel for Brent.
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Meanwhile Kerry Stokes’ 70%-owned Boral Limited (ASX: BLD) saw revenue from continuing operations rose 1.5% to $1.5 billion at the end of a tumultuous half year that saw control of the company change hands, a multi-billion-dollar asset sell off and a return to concentrating on the Australian building sector.
The company said its net profit before significant items fell 11.6% to $144.6 million for the half year, a far more accurate view of its performance than the statutory results of $1.042 billion which included billions of dollars in one off profits from the Boral’s North American Building Products and Meridian Brick joint venture.
Boral’s sale of its timber and roofing businesses generated losses of about $7 million.
The company says it is looking for revenue to rise in the current half thanks to higher prices off the back of a number of re-pricing decisions.
Boral said revenue for the current June half year will be higher than the December half year “reflecting the impact of out-of-cycle national price increases effective January/February” which will help offset energy cost increases, which are anticipated to continue to be elevated in the current half.
“Supply chain constraints and labour shortages which impacted the first half of 2021-22 are expected to continue in the second half of 2021-22,” the company told shareholders.
The company says a $3 billion return of capital to investors, including majority owner, Kerry Stokes’ Seven Group, was completed yesterday.
“With completion of the divestment of our North American Fly Ash business on 11 February 2022, we have now finalised the strategic realignment of our portfolio to focus on our Australian construction materials business,” Boral CEO Zlatko Todorcevski says.
The company will have a further $500 million in surplus capital from the recent sale of its fly ash business and says it will consider reinvestment opportunities before deciding whether it will return more capital to shareholders.
Boral shares were down 1.8% to $3.72. Investors were no doubt hoping for more news on another capital return.
A special 7 cents per share dividend was paid earlier this month as part of the return of $3 billion to shareholders in the wake of the asset sales.
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Rail and logistics operator Aurizon (ASX: AZJ) cut its interim dividend to preserve cash ahead paying for the $2.4 billion One Rail Australia acquisition as revenue growth stagnated and earnings fell for the six months to December.
Interim dividend was cut by 27% to 10.5 cents a share to allow the company to retain as much cash for the big acquisition.
Half-year revenue rose a tiny 1% to $1.5 billion, but underlying profit fell 4% to $257 million as cost pressures squeezed margin
Interim earnings before interest, tax, depreciation, and amortisation (EBITDA) of $727 million eased 1% and management confirmed full-year EBITDA guidance of between $1.43 billion and $1.5 billion, assuming no material disruptions.
Management said the small revenue growth was helped by the new CBH grain contract and the recently acquired Newcastle Port Services. However, Aurizon lost two contracts which offset some of the new inflows.
EBITDA from coal haulage benefited from higher prices and strong cost management, but the Aurizon Network business had to pay $49 million in fees for the Wiggins Inland Rail Project. Without this fee, group Aurizon said EBITDA would have been up by 5%.
“The reduction in dividend supports Aurizon’s commitment to maintain current credit ratings as we progress towards completing the acquisition of One Rail Australia,” the company said in Monday’s ASX announcement.
Aurizon’s says the acquisition will push its rail network into the Northern Territory and South Australia, where battery-element mines such as copper and nickel are located as well as rural commodities such as wheat, barley, wine, fruit and vegetables and seafood.
The shares eased half a per cent to $3.62.
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Finally, Carsales.com (ASX: CAR) saw the shortage in new cars because of component shortages boost revenue and earnings for the six months to the end of December.
Revenue jumped 22% to $242 million which saw a 22% jump in net profit after tax to $75 million.
Despite the solid half the company, which is an online marketplace for vehicles, could only lift interim dividend to 25.5 cents a share from the previous 25 cents.
CEO Cameron McIntyre said it had seen overall website traffic up 12% compared to pre-pandemic levels, which he attributed to user experience of its digital platforms and the pandemic driving up demand.
“Demand for cars globally has been strong due to lower public transport usage, the absence of international travel and the evolution of more flexible working arrangements,” he said, adding that demand for vehicles like caravans, motorbikes and boats had also lifted.
The company’s businesses in the US, South Korea and Brazil have each saw revenue growth of 12%, 19% and 20%, and the company’s 49 per cent acquisition of digital marketplace solutions provider Trader Interactive has been performing “very well”.
Management said in the release that the company expects to deliver “strong growth” across revenue, EBITDA and NPAT.
In terms of its dealer business, Carsales.com expects a stronger second half compared to the first half as well as “good growth” for its private business.
In relation to the company’s investments, it expects to see higher revenue and EBITDA in the second half than the first half due to “improved volumes and profitability in the tyres business”.
The shares rose half a per cent to $21.71.
