Author: therawinformant

After a poor start to the day, in early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a decent gain. At the time of writing the benchmark index is up 0.35% to 5,963.4 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:     

The Altium Limited (ASX: ALU) share price is down 7% to $33.70. The electronic design software company’s shares have come under pressure today after it warned that it was likely to fall short of consensus estimates in FY 2020. Altium advised that this is because the pandemic is impacting its performance during the latter weeks of the financial year. This is historically a strong period for sales.

The Australian Ethical Investment Limited (ASX: AEF) share price has fallen 6% to $8.49. Investors have been selling the ethical fund manager’s shares after the release of its guidance for FY 2020. According to the release, it expects underlying profit after tax before performance fees to be between $6.8 million and $7.5 million. The mid-point of this range represents a 10% increase on the prior year. This compares to its first half profit growth of 38%.

The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 4% to $13.06. A number of travel shares have come under pressure today. This could be due to concerns over a potential second wave of coronavirus in Victoria. If things were to get out of control, it could delay the recovery of domestic travel markets.    

The Transurban Group (ASX: TCL) share price is down 2.5% to $14.77 despite the release of a decent trading update. According to the release, traffic volumes on its toll roads are improving now that restrictions are being eased. For the week commencing 14 June, traffic volumes across the company were down approximately 20% compared to the prior corresponding period. The company also revealed plans to pay a second half distribution of 16 cents per unit.

More reading

• ASX 200 flat: Altium update disappoints, Metcash posts full year loss
• These 5 ASX shares were last week’s top performers
• Transurban share price falls despite a positive market update
• Altium share price sinks 7% lower after FY 2020 trading update
• ASX 200 Weekly Wrap: ASX back in the green

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium and Australian Ethical Investment Ltd. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. and Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Altium, Australian Ethical, Flight Centre, & Transurban are dropping lower appeared first on Motley Fool Australia.

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Top-quality ASX 200 dividend shares are like gold dust in times like these. We’ve well and truly emerged from the March bear market, but the cost has been many companies slashing their distributions to shareholders.

Whether you’re a retiree or a young investor, dividend shares are a valuable part of any portfolio. Regular dividends can provide handy income or be reinvested to turbo-charge your retirement plans.

With that in mind, here are a few of my top dividend shares that are yielding over 8% right now.

3 ASX 200 shares with hefty dividend yields 

For dividends, the Aussie real estate investment trusts (REITs) are an obvious place to start. The trust structure of the REITs means 90% or more of their profits are paid to investors each year.

That’s why Scentre Group (ASX: SCG) boasts an impressive 8.67% dividend yield right now. Scentre owns and operates Westfield shopping centres across Australia and New Zealand. Clearly, Aussie retail hasn’t been doing well amid the coronavirus pandemic and this has been reflected in the Scentre share price.

The ASX 200 retail REIT has slumped 42.3% lower this year as investors have flocked to safety. While Scentre’s earnings may fall and lead to lower dividends, it could also be a cheap buy if you’re looking at the long-term.

Provided shopping centre foot traffic bounces back, government stimulus could prop up rents in the short-term. That means Scentre’s earnings may not be as bad as many suspect and that 8.67% dividend yield may remain intact.

The other place I’m looking for ASX 200 dividend shares is the Aussie banking sector. Despite surging 15.9% higher in June, Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are still yielding a whopping 9.21% right now.

The Aussie banks have slashed distributions under the orders of the banking regulator, Australian Prudential Regulation Authority (APRA). APRA wants the banks to preserve capital in case we encounter a Great Recession-type downturn.

However, investors have still been reasonably bullish on the ASX banks like Bendigo. I personally don’t look to invest outside of the major banks within the banking sector, but Bendigo could be a good option if you think the big four are over-bought.

In terms of the big four, Westpac Banking Corp (ASX: WBC) shares also have a super-charged yield right now. Westpac is currently paying 9.54%, which is an impressive return if the bank can maintain its dividends in the long-term.

But… it’s buyer beware

As I said, top ASX 200 dividend shares are like gold dust right now. However, we’ll have to wait until the next earnings cycle (August or November) to really see which companies are able to maintain their dividends.

Dividend yields can be misleading in the current market, so be wary of buying for the headline yield numbers.

If you’re investing for the long-term, however, there could be some good ASX 200 shares to buy that can churn out profits well into the future.

More reading

• ASX 200 flat: Altium update disappoints, Metcash posts full year loss
• Is the Domino’s Pizza share price a good buy at $68?
• These 5 ASX shares saw the biggest losses last week
• A $73m boost sends the Austal share price to the top of the ASX 200 today
• These 5 ASX shares were last week’s top performers

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are 3 ASX 200 shares with dividend yields over 8% appeared first on Motley Fool Australia.

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The iron ore spot price has climbed to 10-month highs following Vale’s decision to suspend iron ore mining at its Itabria site.

Prices are expected to remain high driven by the short-term concern of fewer shipments from Brazil. This is coupled with China’s port inventories being at a 3-year low and rising demand from Chinese steel mills.

Could this be an opportunity to buy in at the current Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG) and BHP Group Ltd (ASX: BHP) share price?

Iron ore shortage

Vale’s Itabria mining operations were suspended after at least 188 workers tested positive for the coronavirus. This site is responsible for approximately 12% of Vale’s total production. Vale’s supply in the short-term is at risk but it’s difficult to tell whether the company’s annual production will be impacted.  Broadly speaking, South America has struggled to contain the coronavirus – a near-term threat for its iron ore production and shipments.

An increasing dependency on Aussie miners to supply iron ore could be good news for the likes of Rio Tinto, Fortescue and BHP. 

Chinese iron ore consumption 

China has invested in its infrastructure, transport and energy sectors to claw its way back to positive growth. The construction sector is making a suggestive recovery judging by a rise in demand for cement and site machinery.

Data from the China Construction Machinery Association showed that the 25 largest excavator companies recorded sales up 60% year on year in May. Furthermore, the government announced plans to issue RMB$3.75trn worth of bonds to fund regional developments and support businesses hit by COVID-19.

Brazil’s production challenges coupled with an increase in construction activity in China could see iron ore prices remain at today’s elevated levels. 

Are Rio Tinto, Fortescue and BHP a buy? 

There are many near-term factors that point to higher iron ore prices. This would mean healthy margins and market-leading dividends from Aussie iron ore miners. 

Fortescue, being a pure iron ore play means its share price is more responsive to rising iron ore prices. Its shares hit a record all-time high last week of $15.25 while paying a dividend yield of 7.40%. Given how much it has run-up in recent times, I would personally avoid Fortescue shares for the time being. 

Alternatively, I believe the Rio Tinto and BHP share price represent good long-term value at today’s prices. Both shares are within 15% of its recent highs and pay a moderate dividend yield of around 6%. 

More reading

• These 5 ASX shares saw the biggest losses last week
• Infrastructure shares boosted by government spending
• ASX 200 Weekly Wrap: ASX back in the green
• Which shares to buy if the ASX tumbles
• 2 blue chip ASX 200 dividend shares to buy next week

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In early afternoon trade the S&P/ASX 200 Index (ASX: XJO) has fought back from a bad start and is storming higher. At the time of writing the benchmark index is up 0.25% to 5,957.8 points.

Four shares that are climbing more than most today are listed below. Here’s why they are starting the week with a bang:

The Austal Limited (ASX: ASB) share price is up 10% to $3.69. Investors have been buying the shipbuilder’s shares on Monday after it revealed that the U.S. government is investing US$50 million into its U.S. business. The agreement is part of the government’s national response to COVID-19 to maintain, protect, and expand critical domestic shipbuilding and maintenance capacity.

The James Hardie Industries plc (ASX: JHX) share price has climbed over 6% to $28.39. This morning the building materials company upgraded its guidance for the first quarter of FY 2021. James Hardie’s North American adjusted earnings before interest and tax (EBIT) margin is now forecast to be between 27% and 29% for the quarter. This compares with its previous guidance of 22% to 27%.

The Northern Star Resources Ltd (ASX: NST) share price is up 4.5% to $13.61. As well as getting a boost from a rising gold price, investors appear to have responded positively to an asset divestment announcement. The gold miner has agreed to divest the Mt Olympus Project, which comprises most of the Ashburton Project in Western Australia. It will be sold to Kalamazoo Resources Limited (ASX: KZR) for a deferred contingent cash consideration of $17.5 million.

The Ramelius Resources Limited (ASX: RMS) share price has jumped 14% to $2.04 after upgrading its production guidance. The gold miner revealed that its quarterly production is now expected to be in excess of 80,000 ounces. This compares to previous guidance of 65,000 to 70,000 ounces. In light of this, FY 2020 guidance is expected to be a record 225,000 to 230,000 ounces. This is up from its previous full year guidance of 210,000 to 220,000 ounces.

More reading

• ASX 200 flat: Altium update disappoints, Metcash posts full year loss
• A $73m boost sends the Austal share price to the top of the ASX 200 today
• James Hardie share price in spotlight as it upgrades profit guidance
• 5 things to watch on the ASX 200 on Monday
• Top fund manager reveals some of the best ASX shares to own

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why Austal, James Hardie, Northern Star, & Ramelius are storming higher appeared first on Motley Fool Australia.

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The Althea Group Holdings Ltd (ASX: AGH) share price is on the rise today. This follows an announcement that company’s subsidiary has entered into a cannabis beverage production agreement. Althea’s subsidiary, Peak Processing Solutions, has struck a deal with Collective Project Limited to manufacture canned, cannabis-infused beverages at its Ontario facility.

What does Althea do?

Althea is a supplier of medicinal cannabis. The company operates in the highly regulated medical cannabis markets across Australia, the United Kingdom, and Germany. It also has plans to expand into emerging markets throughout Asia and Europe. Althea’s Peak Processing Solutions subsidiary is an extraction and manufacturing business based in Canada. Work was recently completed on Peak Processing’s manufacturing facility and licensing of the facility with Health Canada is currently underway.

What does the new agreement mean?

The new agreement is an important milestone for Peak Processing Solutions and provides validation of the company’s industry-leading production capabilities. Manufacture under the agreement will commence once Peak Processing Solutions is granted its Health Canada Standard Processing Licence. Once licensed, Peak Processing Solutions will support clients with a suite of professional services including product and brand development, regulatory affairs, warehousing, and distribution.

Peak Processing Solutions aims to leverage Canada’s ‘Legalization 2.0’, which allows the sale of cannabis-infused edibles, drinks, nutraceuticals, and cosmetic products. The subsidiary is being positioned as a leading contract manufacturer for consumer brands looking to supply recreational cannabis and create cannabis infused products.

How are cannabis shares performing?

The Althea share price has more than doubled since March when it hit a low of 16 cents per share. In this respect, Althea has outperformed other ASX-listed cannabis companies. For example, Cann Group Ltd (ASX: CAN) has seen its share price increase 55% from its March low. Meanwhile, the Auscann Group Holdings Ltd (ASX: AC8) share price has increased 14% over the same period.

What is the outlook for the cannabis market?

Despite the coronavirus pandemic, the global medical marijuana market is predicted to grow by US$22.33 billion over the next four years, with a compound annual growth rate of 24%. In fact, cannabis sales in the United States surged in the wake of the pandemic. On 16 March, sales of recreational marijuana increased by 159% in California, 100% in Washington State, and 46% in Colorado, compared to the same day in 2019.

Australia’s cannabis market is forecast to grow from $52 million in 2018 to $1.2 billion in 2027. This would make it the fifth largest market in the world. The jump in value is the anticipated result of regulatory changes that have come into effect in recent years, lifting restrictions on the use of cannabis for certain purposes. Althea, Auscann, and Cann Group all stand to benefit from this burgeoning market.

More reading

• Why AusCann, Phoslock, Kogan, & Village Roadshow are dropping lower
• ASX cannabis shares see mixed recovery
• Why Cann, IAG, Monadelphous, & Webjet shares are storming higher

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Tyro Payments Ltd (ASX: TYR) share price is down by 4.17% this morning, after the payment solutions company released its latest transaction volumes. Data released by Tyro shows transaction volumes recovering in June, with volumes up 7% for the month to date compared to 2019.

Despite these numbers, the Tyro Payments share price has dropped to $3.68 in morning trade. 

What does Tyro Payments do?

Tyro Payments is a technology company that provides payment solutions and complementary business banking products. The company is Australia’s 5th largest merchant acquiring bank by number of terminals in the market (behind the four major banks). Used by more than 32,000 merchants in the first half of FY20, Tyro processed over $11.1 billion in transaction value, generating $117.3 million in revenue.

Tyro Payment’s technology platform enables debit and credit card payments. It can be integrated with point of sale systems and is capable of accepting alternative payment types such as Alipay. Traditionally focused on in-store payments, Tyro has recently expanded to eCommerce. Tyro Payments also offers loans in the form of merchant cash advances as well as merchant transaction accounts. In 1H FY20, Tyro Payments originated $37.4 million in loans and held merchant deposits totalling $9.7 million.

How has Tyro Payments been performing?

Tyro Payments was recording significant increases in transaction volumes in early calendar 2020, prior to the onset of the COVID-19 crisis. Transaction volumes increased 27% in January and 30% in February. With the onset of the pandemic in March, growth in transaction volumes fell to 3% as many merchants closed stores.

Transaction volumes fell 38% in April (to $0.911 billion from $1.468 billion) and 18% in May (to $1.285 billion from $1.562 billion) as the crisis took hold. More recent data, however, has shown strong signs of recovery. June volumes are up 7% to $1.016 billion from $0.946 billion over the same period in FY19. Thanks to early strong gains, Tyro Payments’ year-to-date transaction volumes are up 15% to $19.491 billion from $16.890 billion in FY19.

What is the outlook for Tyro Payments?

The company IPO’d last year at an issue price of $2.75 per share in the biggest float of 2019. The Tyro Payments share price dropped dramatically in the March correction, losing nearly 80% of its value from peak to trough.

Since then, however, the Tyro Payments share price has almost quadrupled from a low of 97 cents with shares currently trading at $3.68. This indicates investors are bullish on Tyro Payments’ prospects. As a result of the increase in share price, Tyro Payments entered the S&PASX 300 Index (ASX: XKO) in the latest rebalance.

More reading

• Consider these 2 ASX fintech shares before they take off
• The Tyro Payments share price was down 12% on Monday, here’s why
• Keep a watch on the Zip Co share price and 1 other ASX tech this June
• Why ASX, Domain, Tyro, & Wesfarmers shares are dropping lower
• Are Aussies still withdrawing cash like crazy?

Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Tyro Payments. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Tyro Payments share price slumps despite strong transaction volumes appeared first on Motley Fool Australia.

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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) has recovered from a poor start and is trading roughly flat. The benchmark index is currently at 5,942.8 points.

Here’s what has been happening on the market today:

Altium update disappoints.

The Altium Limited (ASX: ALU) share price is sinking lower today after the electronic design software company warned that it was likely to fall short of analyst consensus estimates in FY 2020. This is because the pandemic is impacting its performance during the latter weeks of the financial year. This is historically a strong part of the year for Altium.

Metcash results.

The Metcash Limited (ASX: MTS) share price has edged lower today after releasing its full year results. In FY 2020 Metcash delivered a 2.9% increase in revenue to $13 billion and a 1.8% decline in underlying earnings before interest and tax (EBIT) to $324.2 million. On the bottom line, the company posted a reported loss after tax of $45.9 million due largely to non-cash impairment charges to goodwill. Excluding these charges, profit after tax would have been roughly flat at $209.7 million

SEEK’s encouraging update.

The SEEK Limited (ASX: SEK) share price is trading slightly higher after the release of a trading update. The job listings company’s update revealed that its weekly billings have been improving since falling heavily at the peak of the pandemic. It also provided its expectations for the full year. It expects revenue of approximately $1,575 million and earnings before interest, tax, depreciation, and amortisation (EBITDA) of ~$410 million in FY 2020.

Best and worst ASX 200 shares.

The Austal Limited (ASX: ASB) share price has been a standout performer on the ASX 200 on Monday. It is up 9% to $3.67 after revealing that the U.S. government will invest US$50 million into its U.S. business. The Altium share price is the worst performer on the ASX 200 today with a disappointing 10% decline after its update.

More reading

• Here are 3 ASX 200 shares with dividend yields over 8%
• Why Austal, James Hardie, Northern Star, & Ramelius are storming higher
• Is the Domino’s Pizza share price a good buy at $68?
• These 5 ASX shares saw the biggest losses last week
• A $73m boost sends the Austal share price to the top of the ASX 200 today

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Altium and Austal Limited. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post ASX 200 flat: Altium update disappoints, Metcash posts full year loss appeared first on Motley Fool Australia.

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The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price rocketed 9.0% to a new, 52-week high of $68.32 last week. This was before falling back slightly in morning trade today to $67.99 at the time of writing. 

Investors have been bullish on the Aussie food group in recent weeks but is there still good value in Domino’s shares?

Why the Domino’s Pizza share price hit a 52-week high

You’d have to be pretty happy as a long-term investor in this Aussie food group. The Domino’s Pizza share price has climbed 29.9% in 2020, 73.8% in the last 12 months and 88.0% over the last 5 years.

Given we’ve just seen a steep bear market followed by a slingshot recovery, those who bought and held Domino’s shares would be sitting on a tidy profit.

I think a strong delivery model has been a big factor in Domino’s being able to achieve a new, 52-week high. Even during the height of coronavirus restrictions, Domino’s was still able to maintain its operations through its delivery and takeaway options.

I feel communication has also been key, with Domino’s providing regular updates throughout COVID-19. The company has restaurants across Australia, New Zealand, Asia and Europe which were all subject to different trading restrictions.

In its last announcement on 24 April, Domino’s advised that all stores “continue to adapt to changes in customer behaviour, community expectations, various support measures and local trading conditions”. 

I think the Domino’s Pizza share price has benefitted greatly from consistent, same-store Australian sales over recent months. This has offset lower revenues from France and New Zealand where stores were forced to close temporarily.

There’s also the company’s strong balance sheet that is likely to be playing a part in its recent share price growth. Domino’s has no short-term debt, with its existing facilities due for renewal in the first half of FY 2023.

This leaves the company in an enviable position to remain focused on its strategy during these turbulent times.

I believe another strong factor behind the strong performance of the Domino’s Pizza share price has been the company reaffirming its medium-term outlook for new store openings, same-store sales and net capex.

Is Domino’s good value at $68?

The Domino’s share price closed at a new, 52-week high of $68.32 per share on Friday afternoon and is now trading at $67.99. 

Many investors are reluctant to buy companies at 52-week highs which is understandable. However, I think this reflects a short-term investing mindset.

If you really want to invest in Domino’s Pizza for the long term, then today’s share price or next week’s shouldn’t matter.

Instead, I think it’s preferable to consider the opportunities for the company’s expansion over the coming decades. Personally, I’m not bullish enough to be buying Domino’s shares at their current valuation.

Having said that, I don’t think a 52-week high should necessarily deter you from buying if you’re holding for the long term.

More reading

• Here are 3 ASX 200 shares with dividend yields over 8%
• ASX 200 flat: Altium update disappoints, Metcash posts full year loss
• These 5 ASX shares saw the biggest losses last week
• A $73m boost sends the Austal share price to the top of the ASX 200 today
• These 5 ASX shares were last week’s top performers

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the Domino’s Pizza share price a good buy at $68? appeared first on Motley Fool Australia.

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The S&P/ASX 200 Index (ASX: XJO) has returned to its recent strong form, gaining 1.6% last week. Early sales data for May boosted the market on Friday, alongside positive sales results from retailers. According to the ABS, retail sales rose 16.3% in May, with large rises in spending on clothing, footwear, personal accessories, cafes and restaurants. 

The technology sector also contributed to gains with the All Technology Index (ASX: XTX) up 1.75%. The resources sector lost ground during the week, with gold miners suffering as investors adjusted risk appetites.

Here we take a look at the 5 ASX shares that sustained the biggest share price losses last week.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price fell 14.5% last week to close the week at 26.5 cents. The lithium miner was removed from the S&P/ASX 200 late the previous week as part of S&P’s quarterly rebalance. 

Lithium prices have continued their downward trend, hitting a fresh low in June as Chinese demand remained subdued despite domestic businesses returning to work. Lithium is an integral component of batteries for electric vehicles. Demand for lithium is expected to pick-up in the second half of 2020 as increased adoption of electric vehicles drives increased demand for battery components. 

Pilbara Minerals owns the Pilangoora Lithium-Tantalum project, which has a 23 year mine life. A multi-stage mine expansion is planned with stage 1 currently in production. The stage 2 phased expansion study is nearing completion. 

The company is currently moderating production in response to soft market conditions. An extension of China’s electric vehicle subsidy program is expected to boost the lithium-ion battery sector and improve market conditions in the medium to long term. 

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma Group share price dropped 13.6% last week with shares finishing the week at 35 cents. This is the second week in a row that Mayne Pharma has been amongst the worst performers on the ASX. There was no news out of the pharmaceutical company last week to prompt the drop in price, however Mayne Pharma was removed from the ASX 200 late the previous week as part of the quarterly rebalance.

The pharmaceutical company had a disappointing first half performance which saw revenues decline 17%. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 47% to $34.6 million. A net loss after tax of $17.5 million was reported driven by lower earnings and restructuring costs. 

Mayne Pharma has faced strong competition on its key generic products. The US generic market has been challenging with aggressive contracting behaviours driving price deflation. The company has been focused on reducing its cost base and rationalising its generic portfolio. Annualised savings of $20 million have so far been recorded.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue Metals share price tumbled 6.9% last week to close the week at $13.79. Despite last week’s drop, the Fortescue Metals share price is up 93% from its March low. Last week Fortescue announced an emissions reduction goal to reach zero net operational emissions by 2040. This goal includes a reduction in emissions in existing operations by 26% from 2020 levels by 2030. 

The miner is a core supplier of iron ore to China, where steel production increased 1.3% year on year in the 4 months to 30 April 2020. Fortescue has reported strong demand for its products with steel inventories drawn down as economic activity recovers. The iron ore price has remained fairly resilient throughout the pandemic. 

As at 31 December 2019, Fortescue generated net profit after tax of (NPAT) of US$17 billion. The company used US$9 billion of capital for debt repayment and US$6 billion for dividends. Fortescue is targeting a gearing ratio of 30% to 40% of gross debt. Since FY16, the company has reduced its gross gearing ratio from 45% to 24%. 

Sydney Airport Holdings Pty Ltd (ASX: SYD)

The Sydney Airport share price dropped 6.3% last week to finish the week at $6.05. The price drop was at least partially prompted by the May air traffic performance numbers, which were released last Friday. Total passenger traffic in May was 92,000 passengers, down 97.4% on the prior corresponding period. 

Some 29,000 international passengers passed through Sydney Airport in May, down 97.7%. Domestic passengers totalled 62,000, a decrease of 97.2% on the prior corresponding period. The decrease in passenger traffic is expected to persist until government travel restrictions are eased. 

In April, Sydney Airport secured $850 million of additional bank debt facilities and announced no half year distribution would be paid. Sydney Airport has also implemented a range of cost reduction activities and is targeting a 35% reduction in operating costs for the 12 months from 1 April 2020. 

Star Entertainment Group Ltd (ASX: SGR)

The Star Entertainment Group share price fell 6.1% last week to close the week at 6.1%. The was no news out of Star Entertainment last week to prompt the fall, however fears around a second wave of COVID-19 infections may have spooked investors. 

Earlier this month, Star Entertainment announced the reopening of Star Sydney on a limited basis. Private gaming rooms have been reopened in addition to a number of food and beverage venues. The reopening is limited to up to 500 loyalty club members on an invitation only basis. Additional visitation is permitted across other areas including hotels and fine dining restaurants with up to 50 seated customers. 

Group operating expenses are expected to be around $20 million for the month of June. This is above the $10 million advised while restrictions remain in place. The incremental increase in costs is largely comprised of employee costs related to the staged reopening of Sydney and Queensland venues. 

Although venues are reopening, restrictions mean that business volumes will be significantly below normal levels. Star Entertainment is focused on conservatively managing the business as it prepares for a return to more normal conditions as restrictions unwind.

More reading

• A $73m boost sends the Austal share price to the top of the ASX 200 today
• These 5 ASX shares were last week’s top performers
• Is there a better buy than JB Hi-Fi shares today?
• Is the a2 Milk share price a buy after falling nearly 5% on Friday?
• The NAB share price has fallen 24%. Should you buy?

Motley Fool contributor Kate O’Brien owns shares of Mayne Pharma Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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