Category: Stock Market

The materials sector has been a weak spot within the Australian share market during 2024 so far. Dragging the sector down nearly 11% year-to-date, many ASX mining shares have succumbed to softening commodity prices.

Still, the entire sector cannot be painted with one brush. Each commodity faces its own set of conditions impacting supply and demand, and thus its price.

For example, the price of lithium has wilted away amid a softening appetite for EVs. In contrast, energy-dense uranium has flown to new heights as nuclear energy finds a growing place in the energy transition. This is evidence of how different commodities — and their associated ASX mining shares — can perform in dissimilar ways.

So, what are experts heralding as the next outcast and outperformer in the ASX mining sector?

Bleak outlook for an industry on life support

When mines are getting shuttered and companies are chasing government assistance, it’s usually a fair sign that the situation is not good.

Australia once held the title of fifth-largest nickel producer in the world two short years ago. But those were different times. A time when the battery metal reached US$48,000 per tonne. That price is now a distant memory in 2024, with nickel fetching US$17,000 per tonne today.

The culprit? Indonesia ramped up nickel production to an enormous 1.8 million tonnes last year — accounting for half the world’s nickel supply. Not only is there a lot more nickel on the market from Indonesia, but it’s also at a price that others are incapable of achieving.

In turn, BHP Group Ltd (ASX: BHP) had to write down the value of its nickel assets on 15 February. An unnerving US$2.5 billion was erased from the carrying value of the company’s nickel assets in Western Australia.

According to Sam Berridge of Perennial Funds Management, these troubling conditions could continue. The portfolio manager expects the flood of cheap supply to continue, noting a real concern that nickel prices could be at risk amid new battery chemistries that do not contain nickel.

Although a diversified materials miner, BHP Group has seen its share price weaken 13% since the high nickel prices in 2022. Meanwhile, despite operating in Indonesia, Nickel Industries Limited (ASX: NIC) has suffered a 57% fall in its share price.

Nickel Industries reported record gross profits today for FY23. However, net profit after tax (NPAT) declined 16% to $176.2 million.

Which ASX mining sector could prosper?

It’s not all dark clouds in the Aussie mining sector. Another metal that is critical in the electrification trend is copper. Analysts believe the conductive metal won’t need to weather an oversupply like nickel anytime soon.

Ben Cleary of Tribeca expects copper to be in a supply deficit for most of the decade citing costs as a deterrent from new supply.

In addition, much of the world’s supply is centred in Chile and Peru. These jurisdictions are susceptible to interruptions. For instance, 600,000 tonnes of copper production was canned last year between strikes at the Las Bambas mine and a government-enforced closure of the Cobre Panama mine.

Another commodity expert, Daniel Hynes of ANZ, reckons US$10,000 per tonne of copper is on the cards this year. Currently, a tonne of copper goes for US$8,474, suggesting an 18% upside.

ASX mining companies with copper exposure include BHP, Rio Tinto Ltd (ASX: RIO), Sandfire Resources Ltd (ASX: SFR), and 29Metals Ltd (ASX: 29M).

The post One ASX mining sector at risk of more pain, and one ready to soar! appeared first on The Motley Fool Australia.

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More reading

• How global job cuts could boost the BHP share price
• Here’s the Rio Tinto dividend forecast through to 2026
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• 3 ASX dividend shares to buy before it’s too late

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Fortescue Metals Group Ltd (ASX: FMG) shares are down 2.1% in afternoon trade on Thursday.

At the time of writing, shares in the S&P/ASX 200 Index (ASX: XJO) mining stock are changing hands for $25.46 apiece.

Longer-term shareholders won’t have much to complain about, though.

As you can see in the chart below, shares in the ASX 200 miner remain up a healthy 15% over the past 12 months. And that’s not including the two fully franked dividends.

Fortescue paid out a final dividend of $1 per share on 28 September.

Eligible passive income investors can expect the interim dividend of $1.08 per share to land in their bank accounts on 27 March. Fortescue shares traded ex-dividend yesterday, 28 February.

That equates to a full-year payout of $2.08 per share. Or a fully franked trailing yield of 8.2% at the current share price.

So, how are some ASX passive income investors earning a yield of 21.6%?

A supercharged yield from Fortescue shares

The answer has to do with timing.

Now, timing the market is no easy feat. Very few investors will get this right with significant consistency. And picking the bottom for ASX stocks in any particular cycle often comes down more to luck than skill.

With that said, there are times when leading ASX 200 stocks, like Fortescue shares, have been unreasonably hammered due to factors outside of their control. Factors that are likely to fade away in time, offering investors attractive entry points before the wider market shakes off its fear and sends the stock rebounding.

As legendary investor Warren Buffett says, “Be greedy when others are fearful.”

An opportune time to have exhibited this greed was during the early months of the global pandemic.

As uncertainty swept across the world in 2020, Fortescue shares, like most all stocks, were heavily sold off by a cadre of fearful ASX investors.

On 27 March 2020, this sell-down saw the ASX 200 mining stock close the day trading for $9.60 a share.

Passive income investors who swallowed their fear and bought in at that bargain price will be earning the same dividends from Fortescue as every other shareholder.

Meaning these brave investors are earning a fully franked yield of 21.6% from their Fortescue shares.

Not to mention they’ve enjoyed a four-year share price gain of 165%!

The post A 22% yield on Fortescue shares? Here’s how these passive income investors achieved it! appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 Zip Co Ltd (ASX: ZIP) share price has been staging a quiet, but rather remarkable recovery in recent months. It was only back in October that the buy now, pay later (BNPL) share was trading for around 26 cents.

Today, those same shares are worth 94 cents each, up an extraordinary 263% in roughly four months.

So some Zip shareholders are certainly celebrating this lucrative run. But perhaps not as many as there should be.

Last October, which turned out in hindsight to be unfortunate timing, Zip undertook what’s known as a ‘small shareholding sale facility’. This involved a share buyback of any shareholder who, at the time, owned under $500 worth of Zip shares.

These programs are often undertaken by companies that have experienced a massive drop in share prices. This, at the time, included Zip. At that point, the company had seen its sales fall more than 97% between February 2021 and October 2023.

The purpose of a small shareholding sale facility is to reduce the regulatory burden of the company by removing large numbers of investors who only have small sums invested in the stock.

Zip ruffles feathers with small share sales

The problem was this was an ‘opt-out’ program, rather than an ‘opt-in’ one. Zip itself stated in December that 69,669 out of 78,000 eligible small shareholders had not opted out of the program and thus had their shares sold.

According to a report from the ABC, there are more than a few would-be Zip shareholders who had their holdings stripped because they failed to opt-out. These investors are now feeling ripped off, given the subsequent Zip share price recovery.

One former shareholder told the ABC this:

I don’t think there is any justifiable reason a small shareholding sale facility like this should ever be anything but OPT-IN… I think it’s unethical to ever sell someone’s shares without their explicit consent.

Making matters worse for these investors, Zip’s management was heavily buying shares around the same time smaller investors were having their stock bought back. ASX filings show that Zip chair Diane Smith-Gander and board member Meredith Scott purchased 111,111 and 35,607 shares respectively on 28 September.

That’s not something that many of Zip’s smaller shareholders reportedly appreciated.

Another former Zip investor was quoted as stating:

In my opinion they should know that the timing of their share purchases don’t look great, given they were executed two days before a prohibited trading period and six days before the announcement of the small shareholding sale facility…

From an optics perspective, I personally think they look terrible. However, in terms of timing the market, they couldn’t have done better.

Of course, Zip hasn’t done anything illegal here. The company is perfectly entitled to conduct a small shareholding sale facility. And its management is welcome to buy shares of their own company outside the restricted periods.

Zip itself told the ABC this:

It was an initiative that was a few months in the planning and… we had a very large register that was very costly to maintain… It [the small shareholding sale facility] was largely a cost-driven exercise. The directors have complied with the shareholding policy or the share purchasing policy of the company and again that was disclosed to market at that time.

But many of Zip’s former shareholders have taken their complaints to the Australian Securities and Investments Commission (ASIC). ASIC’s response didn’t let Zip entirely off the hook:

ASIC has not observed any non-compliance but believes there is room for entities to more clearly articulate the action required by those identified as holding small shareholdings should they wish to retain their shares.

The Zip share price is up 4.97% today at 96 cents a share.

The post Shares sold: Why Zip is under fire from its own shareholders appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. The Motley Fool Australia has no position in any of the stocks mentioned. 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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If you want to receive the next Lovisa Holdings Ltd (ASX: LOV) dividend, then you will need to be quick.

That’s because the rapidly growing fashion jewellery retailer’s shares will be going ex-dividend soon.

When a company’s shares go ex-dividend, it means the rights to the dividend are settled.

As a result, buying shares on or after that day will lead to you missing out on pay day. Instead, the seller of the shares will be the one getting a paycheck.

The Lovisa dividend

As a reminder, earlier this month Lovisa released its half-year results and reported an 18.2% increase in revenue to $373 million and a 12% lift in net profit after tax to $53.5 million.

This strong growth was underpinned by its global expansion, with 74 stores opening during the half to take the total to 854 by the end of December.

This allowed the Lovisa board to increase its 30% franked interim dividend by almost 32% to 50 cents per share.

Based on the current Lovisa share price of $31.87, this equates to a reasonably attractive 1.6% dividend yield for investors.

When is pay day?

Investors won’t have long to wait until this dividend is paid.

Lovisa’s shares are scheduled to go ex-dividend for the 50 cents per share distribution next week on Tuesday 5 March.

After which, the company is planning to make its payment to eligible shareholders the following month on 18 April.

Should you invest?

Most brokers appear to believe that Lovisa’s shares are trading above or about fair value following a strong run over the last 12 months.

For example, Morgan Stanley has an overweight rating and $32.50 price target on its shares and Bell Potter has a buy rating and $30.70 price target on them. These price targets are both broadly in line with where its shares trade today.

The post Should you buy Lovisa shares before they go ex-dividend? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Lovisa. 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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Two ASX energy shares are setting the bar high today.

In afternoon trade on Thursday, the All Ordinaries Index (ASX: XAO) is down 0.1%.

But energy stocks Karoon Energy Ltd (ASX: KAR) and Cue Energy Resources Ltd (ASX: CUE) are up 3% and 40% respectively following the release of their half-year earnings results.

Here’s what they reported.

Karoon share price lifts on profit boost

The Karoon share price is marching higher after the ASX energy share reported underlying net profit after tax (NPAT) of US$145 million, up 129% from the prior six months.

The company attributed the boost in profits to higher hydrocarbon sales, improved oil price realisations and lower unit production costs.

Statutory NPAT of US$122.5 million was up 43% from US$85.4 million in the prior half year. This included one-off costs relating to Karoon’s Who Dat acquisition, along with hedging and foreign exchange losses.

Sales revenue of US$413 million increased 54.5% from the previous half-year. While underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$283 million increased by 94%.

Karoon held cash and cash equivalents at 31 December of US$170 million.

Commenting on the results lifting the ASX energy share today, CEO Julian Fowles said:

Karoon achieved underlying NPAT of US$144.7 million, which was a record for the company for a six-month period. Baúna Project sales volumes and realised oil prices both increased, up 36% and 13% respectively when compared to the prior six months.

In addition, we received the first contributions from the Who Dat acquisition in the US Gulf of Mexico, albeit for only 11 days.

Which brings us to…

ASX energy share Cue rockets amid special dividend

The Cue Energy share price is shooting out the lights today on the heels of the company’s own half-year results (1H FY 2024).

The ASX energy share achieved a 22% year on year increase in six-month revenue to $29 million.

Underlying EBITDAX (which excludes items like exploration costs) came in at $19 million, up 21% from 1H FY 2023.

And NPAT leapt 34% year on year to $9 million.

This saw management declare a 2 cent per share special dividend, which they said was supported by strong cash flow and cash reserves.

Cue had a cash balance of $23 million as at 31 December, up from $15 million at 30 June.

Commenting on the strong results sending the ASX energy share rocketing today, Cue CEO Matthew Boyall said, “We’re building on a consistent trend of growth, with revenue increasing more than 200% over the past four years.”

Boyall added:

This success is fuelled by several key factors including strong production performance, disciplined reinvestment and an ongoing focus on lowering costs. Our Indonesian assets, particularly the Mahato PSC, were significant contributors, generating $16.4 million in revenue.

The post 2 ASX energy shares going gangbusters on today’s earnings results appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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At first glance, it looks as though this Thursday would be a tough one for most ASX investors. After all, the S&P/ASX 200 Index (ASX: XJO) is currently nursing a loss of 0.11%, putting the index at just over 7,650 points. But it hasn’t been a universally rough day, particularly for investors of four ASX exchange-traded funds (ETFs).

Four ASX ETFs smashing all-time highs today

First up is the iShares S&P 500 ETF (ASX: IVV). It was only earlier this week that we were discussing a new record high for this US-based index fund. But today, IVV has done it again, hitting a new record of $52.06 a share.

Then we have the Vanguard US Total Market Shares Index ETF (ASX: VTS). This Thursday has seen VTS units climb up to a new record of $387.41.

The VanEck Morningstar Wide Moat ETF (ASX: MOAT) hasn’t missed out either. This exchange-traded fund clocked a new high watermark of $126.99 just after market open this morning.

Then we have the BetaShares Crypto Innovators ETF (ASX: CRYP). CRYP units have continued to enjoy a huge surge that started around this time last month. Today has seen this cryptocurrency-focused ETF soar to a new record high of $5.29.

Why so many new record highs today?

You might notice that these four exchange-traded funds have something in common – they all invest in non-ASX shares. Specifically, all four of these ETFs are predominately made up of US shares.

IVV and VTS are both US-based index funds. Although they track slightly different indexes (IVV follows the S&P 500, whilst VTS tracks the CRSP U.S. Total Market Index), both funds are dominated by the likes of Apple, Microsoft, Alphabet and the other ‘magnificent seven’ stocks.

With the S&P 500 and the broader US market’s reach continuing to clock new all-time highs in February, it’s no surprise to see their ASX-listed index fund reflections do the same.

MOAT and CRYP are a little different. Both of these ETFs have more actively managed portfolios. The VanEck Wide Moat ETF holds a concentrated portfolio of companies that are selected on their perceived possession of a wide economic moat.

The Betashares Crypto Innovators ETF holds companies that are all involved in the mining and trading of cryptocurrency. Roughly 70% of these holdings are US-based. With prices of cryptocurrencies like Bitcoin (CRYPTO: BTC) continuing to gallop higher alongside the US markets, it’s not shocking to see this ETF follow suit.

Other ETFs clocking new highs

These four ETFs are not the only ones clocking new highs today.

We’ve also seen the Betashares Future Of Payments ETF (ASX: IPAY), Global X Australia ex Financials and Resources ETF (ASX: OZXX), iShares S&P 500 Mid-Cap ETF (ASX: IJH), Betashares S&P/ASX Australian Technology ETF (ASX: ATEC), iShares Europe ETF (ASX: IEU) and the BetaShares India Quality ETF (ASX: INDD) hit either new 52-week or record highs today. Amongst many others.

It’s a good day to be an ETF investor.

The post 4 hot ASX ETFs smashing all-time highs on Thursday appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Apple, Bitcoin, Microsoft, and VanEck Morningstar Wide Moat ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Apple, Betashares Crypto Innovators ETF, Bitcoin, Microsoft, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Apple, VanEck Morningstar Wide Moat ETF, and iShares S&P 500 ETF. 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 S&P/ASX 200 Index (ASX: XJO) is having a subdued session on Thursday. In afternoon trade, the benchmark index is down 0.1% to 7,652.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Australian Finance Group Ltd (ASX: AFG)

The Australian Finance Group share price is down 10% to $1.50. This morning, the mortgage broking company released its half-year results and reported a 34% decline in net profit after tax to $7.4 million.

Chalice Mining Ltd (ASX: CHN)

The Chalice Mining share price is down 9% to $1.14. This is despite there being no news out of the mineral exploration company today. However, it is worth noting that its shares were on fire on Wednesday. So, this decline could have been driven by profit taking from some investors. Its shares remain up 13% over the last two sessions.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is down 21% to 73.5 cents. This may also have been driven by profit taking after some incredible gains. Year to date, the counter drone technology company’s shares are still up 100% despite this decline. In other news, this morning Bell Potter downgraded its shares to a hold rating but with an improved price target of 90 cents.

ResMed Inc. (ASX: RMD)

The ResMed share price is down almost 4% to $26.87 despite there being no news out of the sleep treatment company. However, news that there’s a new weight loss wonder drug on the scene could be weighing on sentiment. Viking Therapeutics Inc (NASDAQ: VKTX) shares are up 150% in two days after its experimental drug reportedly helped obesity patients lose almost 15% of their body weight in a mid-stage study.

The post Why Australian Finance Group, Chalice, DroneShield, and ResMed are sinking today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead and dropped into the red. At the time of writing, the benchmark index is down 0.15% to 7,647.9 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Harvey Norman Holdings Limited (ASX: HVN)

The Harvey Norman share price is up 3% to $4.89. This is despite the retailer releasing its half-year results and reporting a 29.4% decline in profit before tax to $303.8 million and a 23% reduction in its fully franked interim dividend to 10 cents per share. Investors may be pleased to see that the company’s sales returned to growth in January.

Macquarie Technology Group Ltd (ASX: MAQ)

The Macquarie Technology share price is up 9% to $77.49. Investors have been buying the technology company’s shares following the release of its half-year results. Macquarie Technology posted a 5.1% increase in revenue to $181.3 million and a 74% jump in net profit after tax to $14.8 million. The company’s data centre business was a key driver of its growth.

Ramsay Health Care Ltd (ASX: RHC)

The Ramsay Health Care share price is up 6% to $54.25. This private hospital operator’s shares were trading lower following the release of its half-year results before rebounding. Ramsay reported a 23% decline in profit from continuing operations to $140.4 million. However, management is guiding to profit growth for the full year despite the weak start.

Star Entertainment Group Ltd (ASX: SGR)

The Star share price is up 8% to 52 cents. This follows the release of the casino and resorts operator’s first-half results. While the result itself was quite poor, investors appear encouraged by its improving outlook. Management advised: “The start of this calendar year has seen revenue and earnings continue to track our first half run rate.”

The post Why Harvey Norman, Macquarie Technology, Ramsay Health Care, and Star are rising appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Harvey Norman. 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 S&P/ASX 200 Index (ASX: XJO) seems to be gearing up for another tough day this Thursday. At the time of writing, the ASX 200 has slipped by 0.16% leaving the index at around 7,650 points. But let’s talk about what’s going on with the Medibank Private Ltd (ASX: MPL) share price.

On the surface, it looks as though Medibank shares are having an awful time today thus far. The private health insurance provider closed at $3.66 a share yesterday. But those same shares opened at $3.60 this morning, where they remain at present. That’s a loss worth 1.64%.

Upon deeper inspection though, investors should be happy with this share price drop. That’s because it is a consequence of Medibank shares trading ex-dividend today.

Last week, we covered Medibank’s latest half-year earnings report, covering the six months to 31 December. As we discussed at the time, it was a fairly positive report card from Medibank Private.

The company announced that its revenue for the period rose by 3.3% up to $4.02 billion. Underlying profits rose by an even better 16.3% to $262.5 million, which enabled Medibank to unveil an interim dividend of 7.2 cents per share, fully franked, for the half-year.

This was a big announcement for the company. Firstly, this new dividend of 7.3 cents per share was a 14.3% rise over last year’s interim dividend of 6.3 cents per share.

But this new payout is also set to be the largest interim dividend Medibank has ever paid out in its history as a public company. It takes Medibank’s full-year payouts from 14.6 cents per share to 15.5 cents. That’s including the final dividend of 8.3 cents per share that we saw last October.

Why are Medibank shares dropping this Thursday?

As we warned on Tuesday, yesterday was the last day you could have bought Medibank shares with the rights to receive this dividend attached.

Today, the company has just traded ex-dividend.

When a company trades ex-dividend, it cuts off new investors from eligibility for an upcoming shareholder payment. This means that Medibank shares have just become slightly less valuable, given new investors from today will have to wait until Medibank’s second dividend of 2024 to start receiving income from the company.

So the resulting fall in share price that we are witnessing today is completely normal.

For eligible investors, Medibank’s latest dividend is scheduled to arrive in bank accounts next month on 20 March.

At the current Medibank Private share price, this ASX 200 health insurer is trading on a dividend yield of 4.31%.

The post What’s going on with the Medibank share price today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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 S&P/ASX 300 Index (ASX: XKO) is down 0.1% today despite some heavy lifting from ASX 300 stock Macquarie Technology Group Ltd (ASX: MAQ).

Shares in the data centre, cloud, cyber security and telecom company closed yesterday trading for $71.20. At the time of writing in late morning trade on Thursday, shares are swapping hands for $79.40, up 11.5%.

This comes following the release of the ASX tech share’s half-year results for the six months ending 31 December (1H FY 2024).

Read on for the highlights.

ASX 300 stock soars on continued profitability growth

• Revenue of $181.3 million, up 5.1% on 1H FY 2023
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) of $53.0, up 3% year on year
• Net profit after tax (NPAT) of $14.8 million, up 74% on 1H FY 2023 ($8.5 million)
• Operating cash flows of $49.5 million

What else happened during the half year for Macquarie Technology?

The ASX 300 stock is enjoying a strong run today after announcing its eighteenth consecutive half-year of profitable growth.

Macquarie Technology attributed the 74% year on year increase in NPAT over the six months to increased earnings, lower interest costs since the paying down of its debt facility in June, and lower depreciation and amortisation levels.

The company reported holding $86 million in cash and deposits, an improvement from 1H FY 2023 due to positive operating cash flow.

Capital expenditure for six months came in at $18.5 million, down from $33.2 million in the prior corresponding period. This was comprised of $9.1 million in growth capex; $6.0 million in customer related capex; and $3.4 million in maintenance capex.

What did management say?

Commenting on the results sending the ASX 300 stock soaring today, chairman Peter James said:

This result represents our eighteenth consecutive half of EBITDA growth, a strong result underpinned by continued growth in cloud and cyber megatrends, and the outstanding customer experience reflected in our high net promoter score.

Macquarie Technology CEO David Tudehope added:

We are pleased to have secured the IC3 Super West DA. With anticipated demand from the AI megatrend, we could increase the IT load of IC3 Super West from 38MW to 45MW. This would take the campus from 56MW to 63MW. Access to 63MW of power is available upon opening of IC3 Super West.

What’s next for Macquarie Technology?

Looking at what could impact the ASX 300 stock’s performance in the months ahead, the company forecasts the FY 2024 EBITDA will be approximately $108 million to $111 million. This includes Macquarie Data Centres’ EBITDA of $34 million to $35 million.

Site preparation and early works are currently underway to prepare the Macquarie Park Data Centre Campus for IC3 Super West. Debt refinancing is to be undertaken in line with the requirements of that project.

Management said they will continue to invest across the group to drive future profitable growth.

How has the ASX 300 stock been tracking?

It’s been a good year for Macquarie Technology shareholders.

With today’s intraday boost factored in, the ASX 300 stock is up 33% in 12 months.

The post This ASX 300 stock just jumped 12%! Here’s why appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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