/ASX 2 points off a fresh record as investors reward earnings

ASX 2 points off a fresh record as investors reward earnings

Financials were the strongest performers by sector, with Commonwealth Bank, up 7.3 per cent over the week to 90.99 during the week, and National Australia Bank, up 5.5 per cent to $27.35 after both banking giants reported results.

IDP Education, which feeds foreign students into the higher education sector, rallied 36.4 per cent to $23.50 after saying that the coronavirus health scare is “not currently having a material impact on the financial performance of the company”.

 

IDP’s earnings before interest and tax jumped 49 per cent to $86.9 million in the six months ended December 31.

Breville shares soared 27.5 per cent to $24.38 after the maker of Breville, Sage and Kambrook coffee makers, blenders, toasters and microwaves forecast double-digit profit growth this year.

Breville chief executive Jim Clayton expects full-year earnings to rise at least 13 per cent after interim net profit rose 14.1 per cent to $49.7 million.

Challenger was another strong performer  over the week, jumping 13 per cent to $10.10 after the financial services company’s normalised net profit fell 4 per cent to $191 million in the six months ended December 31.

But Challenger achieved a return on equity of 15.2 per cent – 30 basis points above target – and said it’s on track to achieve full-year net profit after tax near the top of its guidance range of $500 million to $550 million.

Mineral Resources rallied 8.1 per cent to $18.76. It told investors it was sticking with previous full-year guidance and that its core mining service division will produce earnings before interest, tax, depreciation and amortisation of $280 million to $300 million. It reported first-half EBITDA of $1.575 billion.

On the downside, vitamin group Blackmores dropped 17.7 per cent to $73.60 after telling investors it had scrapped its first-half dividend after a dramatic 48 per cent slide in profit and warned the second half will be even worse because of three months of disruption from the coronavirus outbreak, and upheaval at a factory in Melbourne.

Beach Energy shares fell sharply as well, losing 11.3 per cent to end the week at $2.11. Half-year revenue dropped 10 per cent to $948.3 million while earnings before interest and taxes dropped 9.5 per cent to $398 million.

Orora stumbled 9.4 per cent to $2.88 after telling investors its struggling US division will crumple the paper and packaging group’s full year profits, despite the craft beer sector’s demand for cans underpinning a better local performance.

The 1.8 per cent rise in the local earnings to $82.6 million where demand for cans offset weakness in wine bottles was one of the few bright spots in the first-half result of the $3.7 billion company, which is due to complete the $1.72 billion sale of its cardboard packaging business to Nippon Paper next month.

And Boral shares dropped 8.4 per cent to $4.72 after it said that it expects full-year earnings to be lower in all three of its main divisions of Australia, North America and USG Boral.

It now forecasts overall net profit after tax for financial 2020 of between $320 million and $340 million, compared with a restated net profit of $420 million for fiscal 2019 when adjusted for its US windows scandal.