Reporting season 2022: BlueScope sets 20-year record, a2 Milk executes on recovery plan

Posted: 21 February 2022 10:29 am
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Reporting season is underway with investors gaining a snapshot of how businesses are actually performing.

Today investors learned how a milk, steel, insurance and challenger Internet company were all impacted by the events of the last 6 months.

Here's what you need to know:

a2 Milk

The a2 Milk Company is expecting a return of sales growth, following a "challenging" 2021, when its net profits after tax (NPAT) fell by 53% to $56.1 million, in the 6 months leading to 31 December.

It was a mixed result for investors.

On the one hand, market conditions remain challenging in the lucrative Chinese infant baby formula market which fell by 3.3%.

On the other hand, in Australia and in the US, its liquid milk sales grew.

Revenue was marginally lower, in line with guidance, falling 2.5% to NZD$660.5 million from the corresponding period the year before.

However, investors will be buoyed by its revenue beating market expectations.

Overall, the company notes it is executing on its medium-term strategy which addresses excess inventory, product freshness, improving and market pricing increasing across English label and China label IMF, enabling healthier channel economics for participants in the a2MC business system.

Shares in a2 Milk are up 6.23% to $5.63 post announcement.

Aussie Broadband

Challenger telecommunications service, Aussie Broadband continues its strong growth, with its latest reports showing a 46% increase on revenue to $229.3 million.

According to its latest figures, the Internet provider is continuing to take market share. As it currently stands, it now has 5.66% of all NBN customers (excluding satellite) which is up from 4.23% in December 2020.

The company announced that earnings before interest, taxes, depreciation and amortisation were up 7% to $9.1 million for its first half year results ending 31 December 2021.

Managing Director Phil Britt highlights the opportunity as well as the company's continued expansion, with its fibre roll out completed in another 63 sites.

"The year started with a huge amount of uncertainty due to the ongoing effects of the COVID-19 pandemic, but our growth in broadband services, for both residential and business segments, remained consistently strong," he said.

Shares in Aussie Broadband slipped $0.48 to $4.48 post its update.

nib

An uplift in policyholders and an increase in premiums revenue has seen insurer nib holdings increase its net profits after tax by 24.7% to $81.2 million.

According to its latest announcement, underlying group revenue was up 8.3% to $1.4 billion as of 31 December, while group claim expenses also increased by 6.4% to $1.1 billion.

Investors will now receive an interim dividend of 11 cents per share.

CEO Mark Fitzgibbon notes the pandemic has seen an increase in awareness of the importance of good health driving new members, but is also impacting the group's claim expenses with non urgent elective surgeries and dentist work increasing.

"We recognise the pandemic is taking its toll on people and value our total support package at over $90 million. We've rebated premiums and deferred annual increases, extended cover for COVID-19 related treatment at no additional cost and made numerous contributions to public health initiatives," he said.

BlueScope

BlueScope Steel has had a stellar result up to 31 December 2021, announcing its highest first half profits in 20 years.

According to the company's latest announcement, the demand for steel products in North America and Australia is helping the company's bottom line.

As such, the company announced a net profit of $1.64 billion in the 6 months through to December, up from $330.3 million in the year-earlier period.

First-half underlying earnings before interest and tax, or EBIT, quadrupled to $2.2 billion.

Off the back of a strong result BlueScope will pay its largest first-half dividend and spend $700 million buying its own shares in order to boost the price.

Managing director and CEO, Mark Vassella said that demand in key segments, especially in building and construction, has been strong, coupled with particularly robust margins driven by increased steel prices in Asia and the US.

"The balance sheet remains strong with $696 million net cash, which combined with our strong cash flow, gives us confidence to invest for the long-term growth and resilience of the Group. BlueScope is well positioned for a low carbon future where it can continue to deliver strong returns to shareholders," he concludes.

Shares in BlueScope fell 2.63% to $18.58 following today's announcement.

At the time of writing Cameron Micallef owns a2 Milk shares.

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