The ASX200 is down 8 points in mid-morning trade, with politics almost as big as the results focus. Repeat of yesterday. Telcos best, Utilities worst, banks all 1%+ lower. Results QAN, S32, FLT, WEB, VRL, IRE SIQ. Ex-div QBE 22c, JBH 46c, WPL 73.5c #ausbiz
- Ex-dividend – Baby Bunting Group (BBN) 2.5c, Capral (CAA) 0.5c, The Citadel Group (CGL) 9.0c, JB Hi-Fi (JBH) 46.0c, Kogan.com (KGN) 6.1c, Korvest (KOV) 7.0c, Mystate (MTS) 14.5c, Oohmedia (OML) 3.5c, QBE (QBE) 22.0c, Woodside Petroleum (WPL) 73.5c
- Japanese data – Nikkei Manufacturing PMI Flash, Coincident Index Final, Leading Economic Index Final
- European data – Markit Composite PMI Flash, Markit Manufacturing PMI Flash, Markit Services PMI Flash, Consumer Confidence Flash
- UK – CBI Distributive Trades
- US economic data – FHFA Housing Price Index, New Home Sales
- Jackson Hole Symposium begins
- Qantas (QAN) – Underlying Profit Before Tax: $1.6 billion (up 14%), Statutory Profit Before Tax: $1.4 billion (up 18%), Statutory Earnings Per Share: 56c (up 21%), Return On Invested Capital: 22%, Net free cash flow: $1,442 million (up 10%), Shareholder return of up to $500 million: 10 cents per share ordinary franked dividend, plus an onmarket, buyback of up to $332 million; Bonus for 27,000 non-executive employees, worth a total of $67 million; Extension of global lounge improvement program –– six additional ports to be upgraded; Commitment to create a second pilot academy facility in regional Australia.Outlook: The Group’s current operating expectations for FY19 are: Total fuel bill is expected to increase to ~A$3.92 billion (up ~$690 million); Inflation impact on Group expenditure (including wage growth) expected to be ~$250 million; Transformation benefits are expected to be ~$400 million; Net capital expenditure expected to be $1.0b for FY19; Total Group capacity to increase by ~0–1 per cent in the first half of FY19, with Group International up by 1 per cent and Group Domestic capacity flat; Net depreciation and non-cancellable aircraft operating leases expected to be ~$155 million higher than FY18.
- Webjet (WEB) – Dividend 12c, giving total FY div of 20c. Reiterated bookings growth targets for FY19-FY20 for both our B2C and B2B businesses – continuing to target bookings growth rates of more than 3 times the underlying market for B2C and more than 5 times the underlying market for B2B.
- APN Outdoor (PO) – The ACCC will not oppose the proposed acquisition of APN Outdoor by JCDecaux, Also results. Revenue of $168.4 million rebased for Yarra Trams and adoption of accounting standard AASB 15, revenue growth on the prior period was 9% and EBITDA growth was 17%. Digital revenue 42% of total revenue, up from 37% in 1H17; “Classic” revenue stable after rebasing for asset conversions; Underlying EBITDA1 up 7% to $39.7 million, reflecting continued EBITDA margin improvement; Statutory NPAT up 13% to $17.8 million (including $2.1 million of non-recurring items, net of tax); Leverage ratio maintained of 1.1x Underlying LTM EBITDA after capital expenditure and investment of $14.5 million in 1H18 (1H17: $16.1 million). Outlook: Year-to-date is in line with the Company’s expectations. Underlying EBITDA guidance reaffirmed $92-$96 million. Overhead growth for FY18 is expected to be 6% to 8%, reflecting a one-off cost base reset to support growth. Capital expenditure for FY18 is expected to be $30 million to $35 million, reflecting growth capex requirements of new tender wins (previous guidance: $25 million to $30 million).
- Flight Centre (FLT) –
- Santos (STO) – Dividend reinstated.
- South32 (S32) – Revenue up 9% to US$7.549m. NPAT +8% to US$1.332m, underlying earnings +16% to US$1,327m. Dividend US6.2c. “Stronger commodity prices and our efforts to mitigate inflationary pressure delivered a 16 per cent increase in Underlying earnings to US$1.3B, free cash flow from operations of US$1.4B and a closing net cash balance of US$2.0B. Group production is expected to rise by 5 per cent in the 2019 financial year, further productivity gains and functional cost savings are expected to mitigate industry wide inflationary pressure and we have added high quality development options to our portfolio.
- Village Roadshow (VRL) – Attributable profit after tax $0.2 million (FY17 $66.7 million loss) after profits from material items of $7.5 million (FY17: $90.3 million loss); and Earnings before interest, tax, depreciation and amortisation, excluding material items and discontinued operations (“EBITDA”) $90.9 million (FY17: $136.3 million)
- Impedimed (IPD) PREVENT Trial Results Published – Published the first of a number of manuscripts from data obtained from the PREVENT trial, which conluded that L-Dex® is very sensitive in the assessment of sub-clinical lymphoedema in patients with a history of breast cancer. The paper also supports the recommendation for an aggressive measurement protocol consisting of an L-Dex® assessment every three months, especially during the first 6 to 12 months post-surgery to facilitate identification of sub-clinical lymphoedema.
SPI FUTURES +18
US EQUITIES – S&P500 -1 (0.04%), Dow Jones -89 (-0.34%), Nasdaq +30 (+0.38%).
Main themes –
- Political developments – US President Trump’s former personal attorney Michael Cohen has pleaded guilty to eight criminal charges, including breaking campaign finance laws
- August FOMC Minutes – The Fed appears comfortable with another rate taking place soon
- Earnings positive – Target (+3.21%), Lowes (+5.80%)
EUROPEAN MARKETS – Mostly higher. UK FTSE +0.11%, German DAX +0.01%, French CAC +0.22%.
- The US dollar was down 0.2% at 95.10
- The Aussie dollar is lower at 73.54.
BONDS – 2-yr: -1 bp to 2.60%, 5-yr: -2 bps to 2.71%, 10-yr: -2 bps to 2.82%, 30-yr: -2 bps to 2.99%
- WTI crude futures closed up US$2.02 or 3.1% at US$67.86 a barrel. EIA stocks fell 5.8mb, nearly four times the drop analysts expected.
- Iron Ore – IRESS reports iron ore unchanged at US$67.50 a tonne. The CommSec site says China Import (Fines 62% Fe) was unchanged at US$66.60/dry ton. (CFR Tianjin port)
- LME metals – Mixed. Cu -0.66%, Ni -0.26%, Al +0.51%
ECONOMIC DATA, NEWS & POLITICS
- Fed minutes – Noted that risks to GDP, unemployment, and inflation are balanced while trade, housing, and emerging markets pose downside risks. Many participants were of the belief that another rate hike will be appropriate “soon.”
- Economic data – Weekly MBA Mortgage Index 4.2% (prior -2.0%); Existing Home Sales 5.34m (consensus 5.40m; prior 5.38m)
- The Kansas City Fed Economic Symposium starts tonight – The ECB doesn’t appear to be represented, while the Bank of Japan will only be represented by Deputy Governor Masazumi Wakatabe.