Woolworths Group Ltd (ASX: WOW) shares are trading lower again on Thursday.

At the time of writing, the supermarket giant’s shares are down 1% to $33.17.

This means that its shares are now down 8% over the last two trading sessions.

Investors have been hitting the sell button in response to a softer than expected half-year result and news that its CEO, Brad Banducci, has fallen on his sword and is quitting the role later this year.

Should you buy Woolworths shares?

The team at Goldman Sachs believes this recent weakness has created a buying opportunity for investors.

According to a note from this morning, the broker has retained its conviction buy rating with a trimmed price target of $40.40. This implies potential upside of 22% for investors over the next 12 months.

And with the broker forecasting a fully franked 3.3% dividend yield in FY 2024, the total potential return stretches beyond 25%.

What did the broker say?

Goldman was a touch underwhelmed with Woolworths’ results but saw enough to remain positive on the company. It explains:

WOW reported 1H24 with +10% EBIT in AU Foods YoY the key bright spot, though this was dragged by weaker-than-expected H2 first 7 weeks AU Foods sales growth of +1.5% and further guidance of a slower EBIT growth in 2H. Additionally, the ongoing ACCC pricing inquiry and earlier-than-expected announcement of CEO Brad Banducci’s retirement weighed on the share price.

Goldman also believes the above overshadowed its new growth engine – the Woolies X business. It said:

Woolies X the scaling new growth engine: The segment (eCom + Digital & Media and Rewards & Services and Homerun) grew DAP by A$96mn vs. pcp, contributing to 68% of 1H24 AU Foods EBIT growth. This has been central to our Buy thesis – that the continued scaling of the company’s omni-channel offer and advanced data and analytics capabilities to drive high growth/high margin ancillary services such as Retail Media will drive strong growth and returns above peers.

In 1H24, eCom DAP margin reached 3.2% and Digital Media DAP margin (on external revenue) reached 36.3%. Our channel checks suggest that WOW leads this growth lever by multiple years and management confirmed that eComm sales has larger baskets, higher GPM (due to long-life products skew).

All in all, the broker believes now could be an opportune time to snap up a high-quality company and a great price.

The post Are Woolworths shares dirt cheap following the selloff? appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Thursday
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• Everything you need to know about the Woolworths dividend
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• Woolworths share price dives 7% following Banducci bombshell

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 positions in and has recommended Goldman Sachs Group. 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 Tabcorp Holdings Ltd (ASX: TAH) share price is down 13.1% to 63 cents following the release of the ASX betting company’s 1H FY24 results.

This is a new 52-week low for the company.

Let’s look into the earnings report.

Tabcorp share price dives to new 52-week low

Key metrics for the six months ending 31 December 2023:

• Group statutory net loss after tax of $636.8 million
• Group revenue of $1,210 million, down 5% on 1H FY23
• Increased variable contribution (VC) margin of 40.1%, up from 39.2% in 1H FY23
• Group EBITDA of $170 million, down 14% on 1H FY23
• Non-cash impairment charge of $731.9 million after tax to the wagering and media business
• Interim dividend of 1 cent per share, fully franked, payable 21 March

Tabcorp said the dividend represented a payout ratio of 111% and reflected “confidence in the business and a strong financial position”.

What else happened in 1H FY24?

A highlight of the half was the Victorian Government awarding Tabcorp the new 20-year Victorian Wagering and Betting Licence.

The company said the licence was a “game-changer” because it levelled the playing field in Victoria on taxes and fees and would generate a step-change in earnings.

Investors loved the news and pushed the Tabcorp share price 22% higher on the day of the announcement in December.

What did Tabcorp management say?

Managing director and CEO Adam Rytenskild said Tabcorp’s transformation was on track.

TAB’s improving market share trend highlights this, and the broader operational result demonstrates the substantial progress we have made as a company.

Total market share and digital market share grew compared to the prior half. This is another positive step having stopped the decline.

We are seeing positive signs from targeted investment in product, brand, data, technology and retail as we start to leverage the strength of an extensive integrated wagering and media network throughout the country.

Rytenskild noted that had the Victorian licence been in place during FY23, EBITDA would have been $140 million higher on a pro forma basis.

What’s next for Tabcorp?

Rytenskild said investments in AI, data and new technology platforms enabled Tabcorp to become a more digital-oriented business.

Combined with our TAB brand embedded in over 4,000 venues, we see a significant omni-channel opportunity that we are yet to capitalise on.

The Australian wagering market is healthy, we’re confident it will return to growth and Tabcorp’s position in it will be much stronger when it does.

Tabcorp share price snapshot

The Tabcorp share price has dropped by 37% over the past 12 months, while the ASX 200 has risen 4%.

The post Tabcorp share price tumbles 13% on half-yearly earnings loss appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bronwyn Allen 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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A few under-the-radar ASX shares are catching the eye of investors on Thursday after releasing their half-year results.

Here’s what is getting investors excited today:

Hipages Group Holdings Ltd (ASX: HPG)

The Hipages share price is up 11% to $1.02. This morning, this online tradie marketplace operator reported a 15% increase in both revenue and recurring revenue to $37.4 million and $35.2 million, respectively, and a 45% jump in EBITDA to $8.4 million. This was driven by increases in connection volumes, subscription tradies, and average revenue per user.

Hipages’ CEO and co-founder, Roby Sharon-Zipser, said:

Our marketplace has benefitted from ongoing momentum arising from the current uncertain macroeconomic environment, where we have seen a clear increase in demand from tradies using the hipages platform to connect to jobs posted by consumers. Consumers are benefiting from increased engagement and competition for those jobs.

MMA Offshore Ltd (ASX: MRM)

The MMA Offshore share price is up over 6% to $2.10. Investors have been buying the marine service provider’s shares after it reported a 28% lift in revenue to $204.3 million and massive 339% jump in underlying net profit after tax to $39.5 million.

MMA Offshore’s Managing Director, David Ross, commented:

Market conditions continue to be positive with strong demand for our vessels and services and ongoing rate improvements driving a 97% increase in EBITDA as compared to the first half of FY2023. The medium-term outlook for offshore activity remains strong with over US$500 billion in greenfield oil and gas projects forecast to be sanctioned globally over the next five years including over US$180 billion in our key operating regions.

Superloop Ltd (ASX: SLC)

The Superloop share price is up 7% to 81 cents after investors responded positively to the telecommunications company’s half-year results. Superloop posted a 32.7% increase in revenue to $197.6 million and a profit after tax (before amortisation) of $1.2 million. The latter compares favourably to a loss of $8.3 million a year earlier.

Superloop’s CEO and Managing Director, Paul Tyler, said

We are very pleased to report another period of strong financial performance, delivering record organic revenue and net new customer growth over the period. Importantly, all three segments contributed to this growth.

The post 3 under-the-radar ASX shares going gangbusters on results 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 positions in and has recommended Hipages Group. The Motley Fool Australia has positions in and has recommended Hipages Group. The Motley Fool Australia has recommended Mma Offshore. 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 Bega Cheese Ltd (ASX: BGA) share price is soaring today after the ASX 200 food and drinks producer reported its first-half earnings for the 2024 financial year (1H24) this morning.

Yesterday, Bega Cheese shares closed at $3.55 each. But this morning, the company opened at $3.66 a share before climbing up as high as $4.06 per share – a new 52-week high for the company. At present, Bega has cooled slightly but is still asking $3.95 a share, up a whopping 11.27%.

Bega Cheese shares rocket on solid half-year result

• Revenue of $1.73 billion, up 3.2% over the first half of the 2023 financial year (1H23)
• Statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of $86.1 million, up 20.25% over 1H23
• Normalised EBITDA of $76.5 million, up 2.55% over 1H23
• Statutory profit after tax of $26.5 million, up 263% over last year’s $73 million
• Statutory earnings per share (EPS) of 8.7 cents, up 262.5% over last year’s 2.4 cents
• Interim dividend of 4 cents per share (fully franked) declared, an 11.1% drop over last year’s interim dividend of 4.5 cents.

Although Bega’s statutory profits jumped by 263%, normalised profits increased by a far tamer 41% to $13.3 million. Likewise, normalised EPS increased by 42% to 4.4 cents per share. These normalised results include the Canberra property sales, the acquisitions of Betta Milk and Meander Valley Dairy, and restructuring costs.

Bega also revealed that it has made a big dent in the company’s debt. Bega reported net debt of $250.9 million as of 24 December, a $70.5 million reduction from the $321.4 million reported this time last year.

What else happened in 1H24?

As we just touched on, the acquisitions of Betta Milk and Meander Valley Dairy were some of the biggest events for Bega over the first half of the 2024 financial year. These acquisitions were announced back on 29 August and saw Bega acquire both brands from TasFoods Ltd (ASX: TFL) for a sum of $11 million, plus inventory.

Investors didn’t seem that keen on the purchase at the time though, with the Bega Cheese share price declining in the days following the announcement:

What did the company’s management say?

Bega Cheese management stated the following on these half-year results:

The result reflected the importance of the diversity of the Group with strong performance in Branded more than offsetting the decline in the Bulk segment.

The Group’s revenue exceeded $1.7 billion, an increase of 3% on the prior year. This included growth of 8% in the Branded segment demonstrating continued strong demand for the categories we participate in and the brands in our portfolio.

The Bega Group maintained guidance of $160-170 million normalised EBITDA for FY2024.

Bega 2024 half-year earnings report

What’s next for Bega Cheese?

As we just quoted, Bega management has opted to maintain its full-year guidance for the 2024 financial year at $160-170 million in normalised EBITDA. That’s despite management’s expectation of a moderation of “Australian economic circumstances” over the rest of the financial year.

Bega is anticipating that its ongoing cost and efficiency programs, as well as “improving industry environment for bulk business” will assist the company in this endeavour.

Bega Cheese share price snapshot

With today’s stocks price gains under the belt, the Bega Cheese share price has had a pleasing few months. The company is up more than 24% over the past six months, and up 8.5% over the past year.

At the current pricing, Bega Cheese shares are trading on a market capitalisation of $1.08 billion, with a trailing dividend yield of 1.9%.

The post Bega Cheese shares soar 11% on profit jump appeared first on The Motley Fool Australia.

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• Here are 3 ASX retail shares moving up to 19% on half-year results today
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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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There has been a good amount of results released from the retail sector on Thursday.

Some have gone down well with investors, others have not.

Three ASX retail shares making big moves are listed below. Here’s what they reported:

Reject Shop Ltd ASX: TRS)

The Reject Shop share price crashed as much as 19% to $4.34 following the release of the discount retailer’s half-year results. The company posted a 4.2% lift in sales to $458.3 million but a 12.5% decline in net profit after tax to $14.3 million. Management notes that its profits were “below the Company’s expectations, with higher than anticipated shrinkage and product mix shift being the key negative impacts on gross margin.”

Management also decided not to provide profit guidance for the full year and warned that the “first half performance should not be used as an indicator for the second half of the financial year as the Company typically generates a higher proportion of sales in the first half.”

Super Retail Group Ltd (ASX: SUL)

The Super Retail share price is down 6% to $15.75. This follows the release of the retail conglomerate’s half-year results which revealed a 3% lift in sales to $2 billion but a 6% decline in normalised net profit after tax to $145 million.

Super Retail revealed that its cost of doing business (CODB) as a percentage of sales increased by 90 basis points to 35.3% due to the impact of inflation on wages, rent, and electricity.

Also weighing on sentiment was its trading update, which revealed that like for like sales are down 3% during the first seven weeks of the second half.

Universal Store Holdings Ltd (ASX: UNI)

The Universal Store share price is up 14% to $4.65. Investors have been buying the youth fashion retailer’s shares following the release of a strong half-year update.

The company defied consumer spending weakness to deliver an 8.5% increase in sales to $158 million and 16.7% jump in net profit after tax to $20.7 million. This allowed the company’s board to boost its interim dividend by almost 18% to 16.5 cents per share.

Management also revealed that the second half has started positively.

The post Here are 3 ASX retail shares moving up to 19% on half-year results today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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 Super Retail Group. 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 Medibank Private Ltd (ASX: MPL) share price is under pressure after releasing its latest results this morning.

At the time of writing, shares in the health insurer are down 5.3% to $3.66. The downward move makes it the worst-performing company in the financials sector on Thursday.

Medibank share price scrapes its knee on ‘competitive market’

• Group revenue up 3.3% to $4,024 million
• Net investment income up 49.6% to $83.6 million
• Net profit after tax (NPAT) up 104.8% to $491.9 million
• Underlying NPAT up 16.3% to $262.5 million
• Interim fully franked dividend of 7.2 cents per share, up 14.3% from 6.3 cents

Importantly, the doubling of statutory NPAT is heavily influenced by a change in accounting standards. The adoption of AASB 17 means first-half profits were boosted by $80.7 million due to how COVID-19 claim savings and givebacks had to be recognised.

What happened in the first half?

In the six months ending 31 December 2023, Medibank’s resident health insurance segment remained resilient. The company marginally grew its resident policyholders by 3,400 or 0.2% during the half. This was restrained by a competitive market, leading to a ‘modest increase’ in customers switching funds.

The non-residents (overseas visitors and students) segment fared much better in the half. Medibank achieved a net increase in non-resident policyholders of 33,800 or 12.3%.

On the investment side of the business, it is clear Medibank is benefitting from the hoisted interest rates. Income sourced from the company’s investments jumped 49.6% versus the prior corresponding period to $83.6 million.

Medibank expensed $17.6 million in non-recurring cybercrime costs during the half. Management anticipates an additional $30 million to $35 million will be spent in FY24 to improve its IT security further and cover regulatory/litigation costs associated with the hack in October 2022.

The Medibank share price is up approximately 5% since the cyber incident was originally disclosed, as shown below.

What did management say?

Medibank CEO David Kockzkar emphasised the company’s pursuit of a health-first transition, stating:

The health transition is underway. From overnight stays in expensive acute care hospitals to virtual, short stay and home care. From treatment to prevention and from general care to personalised health.

We have been at the forefront of this transition by making targeted investments in growing health markets to better support our customers and improve the way healthcare is delivered in Australia.

Our new partnership with healthcare technology group Amwell will enable us to deliver virtual prevention programs at scale.

The Amwell partnership hit the grapevine earlier this week. As part of the coalition, Medibank will implement Amwell’s technology to promote wellness and prevent chronic disease.

What’s next for Medibank Private?

No specifics were provided about revenue or profits in today’s release. However, shareholders were supplied with some guidance on policyholder growth and resident claims, as follows:

• 1.2% to 1.5% resident policyholder growth expected in FY24
• 2.2% to 2.4% expected claims per policy unit growth (down from 2.6%)

Furthermore, organic and inorganic growth for Medibank Health and Health Insurance segments were named ‘areas of focus’.

Medibank share price snapshot

Shares in Medibank have performed solidly over the last year, beating out many of its S&P/ASX 200 Index (ASX: XJO) included peers, rallying 21.4%. The rise in value gives the 48-year-old insurance company a market capitalisation of $10.2 billion.

Medibank trades on a price-to-earnings (P/E) ratio of roughly 20 times earnings. This is on par with its ASX-listed peer NIB Holdings Limited (ASX: NHF). However, it does suggest that Medibank’s share price trades at a premium to the global insurance industry (12 times earnings).

The post Medibank share price slumps 5% despite surging earnings appeared first on The Motley Fool Australia.

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• Medibank share price hits 52-week high on US tech partnership
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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 positions in and has recommended NIB Holdings. 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 Fortescue Ltd (ASX: FMG) share price is up by 1% after the ASX mining share reported its FY24 first-half result.

Fortescue share price rises on strong result

• Revenue increased by 21% to US$9.5 billion
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 36% to US$5.9 billion
• Net profit after tax (NPAT) grew 41% to US$3.3 billion
• Free cash flow increased 68% to US$2.66 billion
• Net debt improved 45% to $569 million
• Interim dividend increased by 44% to A$1.08 per share

Fortescue’s profitability soared after the average revenue it achieved rose by 24% to US$108.19 per dry metric tonne (dmt). The production (C1) costs only rose by 2% to US17.77 per wet metric tonne. It sold 95.2mt of ore, which was a 2% reduction compared to the prior corresponding period.

The ASX iron ore share said it has had a strong focus on productivity and efficiency

What else happened in the FY24 first half?

Iron Bridge, a high-grade project that Fortescue had been working on for a long time, achieved its first shipment of high-grade magnetite concentrate in September 2023.

The Fortescue share price could be heavily influenced by the success (or failure) of the green energy division which is looking to produce green hydrogen. In the last several months, the company has announced a final investment decision on the Phoenix hydrogen hub in the US, the Gladstone PEM50 project in the US and a green iron trial commercial plant in the Pilbara. The EU awarded Fortescue’s Holmanset project a grant of €204 million.

The company also launched Fortescue Capital, which is a green energy investment accelerator, headquartered in New York City.

What did Fortescue management say?

The Fortescue Metals CEO Dino Otranto said:

Fortescue’s performance in the first half of FY24 has been excellent, with the team achieving our second highest first half shipments while maintaining our strong focus on safety and keeping our costs low.

Whether it’s through our first green energy projects, our diversification into the high grade segment of the iron ore market through Iron Bridge, or expansion of our global footprint with the Belinga Iron Ore Project in Gabon, we remain committed to creating value for all our stakeholders.

What’s next for Fortescue?

The company is making ongoing decarbonisation progress, including ongoing construction of a 100MW solar farm and testing of the first battery electric haul truck prototype in the Pilbara.

Work is underway at Iron Bridge to replace the high-pressure section (65km) of the Canning Basin raw water pipeline to de-risk and improve the performance. The installation is scheduled to be completed by mid-2025 and isn’t expected to impact Iron Bridge’s ramp-up. This comes with an estimated cost for Fortescue of US$100 million, with most of that cost coming in FY25.

Fortescue share price snapshot

In the past six months, the Fortescue share price has risen by 34%, compared to a rise of just 7% for the S&P/ASX 200 Index (ASX: XJO).

The post Fortescue share price rises on huge 41% profit growth in FY24 half-year result appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Fortescue. 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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Pilbara Minerals Ltd (ASX: PLS) shares are edging lower on Thursday.

At the time of writing, the lithium miner’s shares are down 0.25% to $3.65.

This follows the company’s half-year results release this morning, which revealed a huge profit decline.

What happened?

As we covered here earlier, Pilbara Minerals reported a 65% decline in revenue to $757 million, a 77% decline in EBITDA to $415 million, and a 78% drop in underlying profit after tax to $273 million.

Management revealed that this was driven by falling lithium prices. Its average realised price was down 67% year on year from US$4,993 per tonne to US$1,645 per tonne.

In light of this profit decline, the Pilbara Minerals board unsurprisingly elected not to declare an interim dividend for FY 2024.

Some good news is that the company is still generating bucketloads of cash. It reported a positive cash margin from operations of $536 million for the half. This left it with a cash balance of $2.1 billion at the end of December despite some major investments. Management explains:

Operating cash margin decreased 71% to $536M, with the lower average realised price partly offset by increased sales volume and operational efficiencies. This enabled an increase in capital investment in Plant Property and Equipment of $398M for expansion programs and operating efficiency including8 $211M on the P680 and P1000 expansion projects, $78M on capitalised mine waste development, $47M on new projects and enhancements, and $40M on sustaining capital expenditure.

How does this compare to expectations?

Goldman Sachs was forecasting revenue of $774 million and underlying EBITDA of $469 million, whereas the consensus estimate was for $926 million and $597 million, respectively.

The company has missed on both sets of estimates, which may explain why some investors are selling Pilbara Minerals shares today.

The post Pilbara Minerals shares lower on disappointing half-year earnings miss 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 positions in and has recommended Goldman Sachs Group. 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 Qantas Airways Limited (ASX: QAN) share price is having a strong session on Thursday morning.

At the time of writing, the airline operator’s shares are up 4% to $5.80.

This follows the release of the company’s half-year results.

Qantas share price charges higher on results

• Revenue up 12.3% to $11,127 million
• Underlying profit before tax down 12.8% to $1,245 million
• Statutory profit after tax down 13.2% to $869 million
• No interim dividend but $400 million on-market share buyback
• Net debt of $4 billion

What happened during the half?

For the six months ended 31 December, Qantas reported a 12.3% increase in revenue to $11,127 million.

This was driven by growth across the business compared to the prior corresponding period.

Qantas Domestic delivered a 3.4% increase in revenue to $3,758 million, Qantas International posted a 14.2% lift in revenue to $4,340 million, Jetstar revenue was up 18.6% to $2,486 million, and Qantas Loyalty revenue jumped 24.8% to $1,271 million.

The company’s earnings didn’t grow over the prior corresponding period. Its underlying profit before tax was down 12.8% to $1,245 million for the half.

Management notes that this reflects fares and capacity continuing to normalise. Lower fares contributed to reduced revenue per available seat kilometre, which had around a $600 million impact on profit, while freight yields fell by $146 million.

This was partially offset by increased flying of $485 million and unwinding of transition costs from the post-COVID restart of $179 million. Unit cost (excluding fuel) fell by 5.2% year-on-year.

Management commentary

Qantas’ new CEO, Vanessa Hudson, acknowledged the company’s failings last year but was pleased with recent progress. She commented:

We know that millions of Australians rely on us and we’ve heard their feedback loud and clear. There’s a lot of work happening to lift our service levels and the early signs are really positive. Our customer satisfaction scores have bounced back strongly since December and we have more service and product improvements in the pipeline.

Having the financial strength to keep investing is key, and that makes the strong performance that all business units had in the first half so important. We understand the need for affordable air travel and fares have fallen more than 10 per cent since peaking in late 2022. At the same time, we’ve seen a cost benefit from fewer cancellations and delays, and scale benefits as more international flying returns.

Outlook

Management advised that it is seeing strong travel demand across the company’s portfolio.

Unit revenue is expected to remain stable for domestic and continue to normalise for international as market capacity returns.

The post Qantas share price takes off following $1.2b half-year profit 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 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 Mineral Resources Ltd (ASX: MIN) share price is tumbling on Thursday morning.

At the time of writing, the mining and mining services company’s shares are down 2.5% to $57.65.

This follows the release of the company’s half-year results.

Mineral Resources share price tumbles on half-year results

Here’s how the company performed during the six months ended 31 December:

• Revenue up 7% to $2,514.7 million
• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) down 28.1% to $674.9 million
• Statutory net profit after tax up 32.8% to $518 million
• Interim dividend down 83.3% to 20 cents per share
• Net debt of $3,546.7 million

What happened during the half?

During the first half of FY 2024, Mineral Resources reported a 7% lift in revenue to $2,514.7 million but a 28.1% decline in underlying EBITDA to $674.9 million.

Iron Ore was the company’s star performer during the half, as stronger prices and solid volumes drove up revenue 37% to $1,329.4 million.

In addition, Mineral Resources’ managing director, Chris Ellison, advised that this result reflects the company’s diversified business model. He said:

MinRes’ diversified business model ensured a solid set of financial results despite weaker lithium prices, with revenue for the first half up 7 per cent to $2,514.7M. Underlying EBITDA of $674.9M was evenly split between lithium ($271.4M), iron ore ($266.2M) and mining services ($253.7M), with statutory net profit after tax of $518.0M.

Management notes that its Wodgina lithium operation reported underlying EBITDA of $134.1 million, down from $177.2 million a year earlier. It was impacted by lower lithium prices, partially offset by higher volumes sold and lower spodumene costs.

Mineral Resources’ statutory profit includes a $279.8 million pre-tax net gain plus a net tax benefit of $79.5 million. Excluding these, its net profit would have been substantially down on the prior corresponding period.

This explains why the company slashed its interim dividend by a sizeable 83% to 20 cents per share. This represents a yield of only 0.35%. Not quite the big yields investors may have become accustomed to in recent times.

Outlook

Ellison notes that the company is on track to achieve its guidance in FY 2024. He said:

A focus on delivery has our lithium, iron ore and mining services divisions on track to guidance this year and the transformational Onslow Iron project on time and on budget.

The post Mineral Resources share price drops on earnings decline and dividend crunch 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 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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