The Star Entertainment Group Ltd (ASX: SGR) share price is being spared after the release of its half-year results.

Still sitting in a trading halt, investors are none the wiser as to whether the market is taking today’s results positively or negatively.

Star share price frozen as tarnishing takes its toll

Here are the highlights of the company’s half-year results:

• Statutory revenue up 76% year on year to $1,013 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 550% to $199.7 million
• Net losses deepened by 1,603% to reach $1,264 million
• Net assets fell 37% to $2,153.4 million
• An $800 million equity raising at $1.20 per share announced today
• Dividends suspended until the long-term target leverage of 2 to 2.5 times is reached and all licenses are returned

The six months ending December 2022 was unquestionably a diabolical stretch of time for the casino operator. Troubled by investigations, license stripping, and fines, Star Entertainment is perhaps lucky to still be standing.

Surprisingly, despite all the rumblings, some of the company’s casinos performed strongly. Revenue from Star’s Gold Coast and Brisbane locations increased by 30% and 9% respectively compared to their pre-pandemic levels. Although, the performance of its Sydney casino was not glowing, with revenue slipping 14% to the pre-COVID comparable.

The company’s staggering $1.3 billion loss is comprised of several significant items. These include nearly a billion dollars in impairment costs to Star’s Sydney property assets and goodwill; $350 million worth of penalties; and ongoing costs tied to its regulatory reviews.

What else happened in the first half?

There was little in the way of good news throughout the back half of 2022.

On 17 October, it was unveiled that the New South Wales gaming regulator — NSW Independent Casino Commission (NICC) — had handed down a $100 million fine.

In addition, NICC suspended the company’s gaming license following unsettling findings from an inquiry. Remarkably, the Star share price rose more than 1% on the news.

Another spanner that was thrown into the works during the half was the New South Wales government’s announced plans to bring reform to casino tax rates. Under the new reform, pokies will garner a top tax rate of 60.67%.

What did management say?

Star group CEO and managing director Robbie Cooke discussed the difficulties and the successes during the half, stating:

We have been pleased with the ongoing strength of trading across our Queensland-based properties while trading at The Star Sydney has been impacted by operational changes associated with the outcome of the Bell Review and increased competition.

Cooke put an emphasis on regaining the trust and confidence of the community moving forward. In doing so, a key focus is to prove its casinos are fit for purpose and to regain licenses.

What’s next?

After entering a trading halt yesterday, Star has now announced capital structure initiatives to shore up the company amid the heightened uncertainty.

The plan is to raise $800 million in total through a $685 million entitlement offer and a $115 million institutional placement. Notably, this capital will be raised at a 21% discount to the current Star share price.

According to the release, the proceeds will be used to repay debt and increase liquidity.

Star Entertainment share price snapshot

Shares in the Australian casino operator have been in a world of pain. Not only over the past year, but across the last five years. The company’s share price was unable to reclaim its pre-pandemic level after initially bouncing back.

The last 12 months have seen the Star share price crumble 56%, with steep falls in December and February.

The post Star Entertainment share price treads water as losses blowout to $1.3 billion appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why is the Star Entertainment share price on ice today?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Star Entertainment share price rebounds 8% on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Tuesday

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.

from The Motley Fool Australia https://ift.tt/lFJK0BQ

The Rio Tinto Ltd (ASX: RIO) share price has come under pressure on Thursday.

In morning trade, the mining giant’s shares dropped 3% to $121.72.

Why is the Rio Tinto share price dropping?

The Rio Tinto share price is falling today following the release of the miner’s full-year results, which fell a touch short of the market’s expectations.

In case you missed it, Rio Tinto posted a 13% decline in revenue to US$55,554 million and a 39% reduction in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to US$26,272 million.

The latter is 1.6% short of the consensus estimate of US$26.7 billion.

Management advised that its top line was impacted by weaker commodity prices, whereas its bottom line was hit by higher energy and raw materials prices on its operations, as well as higher rates of inflation on operating costs and closure liabilities.

This ultimately led to Rio Tinto’s board cutting its fully franked final dividend by 46% to US$2.25 per share, which brought the Rio Tinto dividend to a total of US$4.92 per share in FY 2022. This is a 38% reduction on last year’s payout but was in line with consensus estimates.

Broker reaction

Goldman Sachs was pleased with the result. It notes that its earnings were largely in line with its estimates and its dividend was better than expected. It commented:

RIO reported an in-line 2022 result with underlying EBITDA/NPAT of US$26.3bn/US$13.3bn, -2%/+3% vs. our estimates and slightly below Visible Alpha consensus. Net debt of US$4.2bn was broadly in-line with GSe at US$4bn. Iron ore EBITDA was in-line with GSe, minerals performed strongly, but the aluminium division was below GSe on higher than expected costs (particularly in alumina). The final dividend of US$2.25/sh was above our US$1.97 estimate and cons. The full year div payout of 60% was at the top of the 40-60% policy with RIO stating capital allocation will now focus more on growth and decarb.

In response, the broker has retained its buy rating with a slightly trimmed price target of $131.70.

Elsewhere, over at Morgans, its analysts are little less positive. They note that Rio Tinto’s “H2 earnings slightly trailed expectations” and have retained their hold rating with a reduced price target of $109.00.

While its analysts see positives from its improved operating performance, they have concerns over costs. The broker commented:

In general terms it was a tough half for RIO with the big miner poorly positioned to defend against a difficult operating and cost environment given the ongoing productivity issues across its global business. With that said, greenshoots around an improving operating performance could be emerging in the Pilbara (WA iron ore), where it appears in early 2023 RIO has maintained the strong run rate it finished with in 2022. This builds on management’s assessment that each of its Pilbara assets finished 2022 in better shape than they entered the year, although management did caution against forming positive conclusions so early in the year.

The post Why is the Rio Tinto share price tumbling today? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Everything you need to know about the latest Rio Tinto dividend
• 5 things to watch on the ASX 200 on Thursday
• Rio Tinto share price on watch amid FY22 results
• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Passive income boost! 2 excellent high yield ASX dividend shares to buy: experts

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.

from The Motley Fool Australia https://ift.tt/ZaeKEiN

The Qantas Airways Limited (ASX: QAN) share price has failed to take off on Thursday.

In morning trade, the airline operator’s shares are down almost 4% to $6.22.

Why is the Qantas share price falling?

Investors have been selling down the Qantas share price on Thursday in response to the Flying Kangaroo’s half-year results release.

For the six months ended 31 December, Qantas reported a 222% increase in revenue to $9.9 billion and an underlying profit before tax of $1.43 billion. The latter compares very favourably to loss of $1.3 billion in the prior corresponding period.

In light of this strong form, its much-improved balance sheet, and positive outlook, Qantas has decided to return up to $500 million to shareholders via an on-market share buy-back.

Broker response

Goldman Sachs has taken a look at the result and has given its verdict. It notes that the company’s profit was a touch short of its expectations, which may explain some of the weakness in the Qantas share price today. It commented:

QAN adjusted PBT of $1,428m was 1% below GSe and 1% ahead of consensus (this compared with guidance of $1,350-1,450m. Revenues were 3% higher than expected, offset by higher than expected ex-Fuel opex and D&A. Group capacity was 1% below our forecasts, more than offset by a 3% unit revenue beat. Adjusted Net Debt was $2,398, which was 1% below our estimates and well below the $3.9-4.8bn revised target range (struck at 2.0-2.5x EBITDA assuming a 10% ROIC and was $4.2-5.2bn in August 2022).

Another item that caught the eye of Goldman Sachs was Qantas’ capex spending. It highlights that this is ramping up quicker than it was expecting. Its analysts add:

FY23 Capex $2.6-2.7bn from (previously $2.2-2.3bn; GSe $2.3bn; Consensus $2.3bn), reflecting re-phasing of existing commitments for improved commercial terms. FY24 capex of expected to be $3-3.2bn vs GSe of $2.8bn (although we note that our FY24 ND was ~$600m below the bottom of the revised target range) and consensus of $3bn.

Nevertheless, as things stand, the broker has a conviction buy rating and $8.20 price target on Qantas’ shares. Though, this could change once Goldman Sachs has updated its financial model.

The post Qantas share price falls 4% despite huge profits and major share buy-back appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Qantas share price on watch amid $1.4b half-year profit
• Earnings preview: Here are the ASX shares reporting on Thursday
• 5 things to watch on the ASX 200 on Thursday
• Own Qantas shares? Here’s how the ASX 200 airline is investing $100 million
• Are Qantas shares a buy ahead of this week’s ASX results announcement?

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.

from The Motley Fool Australia https://ift.tt/y7uxMQn

The Medibank Private Ltd (ASX: MPL) share price is up 4.9% in early trade. 

Shares in the S&P/ASX 200 Index (ASX: XJO) healthcare stock, Australia’s largest health insurer, closed yesterday trading for $3.08. Shares are currently changing hands for $3.23 apiece.

This comes following the release of the company’s half-year results for the six months ending 31 December (1H FY23).

Here are the highlights.

Medibank share price takes off on profit boost

• Revenue of $3.63 billion, up 1.3% from 1H FY22
• Underlying net profit after tax (NPAT) of $227 million, up 6.7%
• Earnings per share (EPS) of 8.5 cents, up from 8.0 cents in 1H FY22
• Fully franked interim dividend of 6.3 cents per share, up from 6.1 cents

What else happened during the half year?

Medibank reported its Health Insurance operating profits increased by 8.7% year on year to $305 million for the six months.

Profits at the company’s Medibank Health segment went the other way, falling 4.3% to $25 million.

Gross margins increased by 1.0% to 16.4% for the period.

Medibank’s net investment income of $56 million increased by 81%.

Other factors influencing the Medibank share price over the six months include its payouts, with $3.0 billion in total claims paid.

Medibank also updated the market on its response to the October data breach, which saw cybercriminals hack its customers’ health data.

The ASX 200 insurer said it’s working with Australian authorities and supporting its customers through its Cyber Response Support Program. The company is also launching additional security measures, such as adding further detection and forensics capabilities.

“We recognise the significant impact the cybercrime event has had on our customers,” Medibank CEO David Koczkar said. “There is more work to do, and the lessons we have learnt from the cybercrime will continue to shape our response and we will emerge stronger.”

What did management say?

Commenting on the results helping lift the Medibank share price today, Koczkar said:

We are a resilient business with great people, a unique offering in health, and a track record of responding to whatever challenge is in front of us. Whether it be COVID, inflation, cost-of-living pressures or the cybercrime event, our strategy has and will continue to put our customers and their needs at the heart of our business.

While we did see some impacts to resident policyholder growth in the second quarter, there are positive signs of recovery. The performance in Medibank Health was steady despite the external environment.

Koczkar noted that Medibank’s resident policyholder numbers increased by almost 35,000 over the past 12 months.

What’s next?

Looking at what might influence the Medibank share price over the months ahead, the company said it will continue to strengthen its cybersecurity environment to ensure its customers have confidence in the protection of their data.

Koczkar said Medibank has multiple areas for the business to grow.

“We will continue to use our strong balance sheet to invest in opportunities to support our ambitions in areas such as health and wellbeing, primary care, and new care models including additional short stay hospitals,” he said.

Medibank share price snapshot

As you can see in the chart below, the Medibank share price has enjoyed a healthy lift over the past weeks and is currently up 9.5% in 2023.

The post Medibank share price charges higher amid profit boost appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here are the top 10 ASX 200 shares today
• Why Beach Energy, Medibank, Pushpay, and Whitehaven Coal shares are rising

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.

from The Motley Fool Australia https://ift.tt/wOHa0Ce

The economic situation in 2023 has completely changed compared to 2021. Interest rates have soared over the last 12 months and are expected to keep rising over the next few months. Indeed, passive income strategies have been turned upside down.

While higher interest rates have hurt asset prices, they have also thrown up a number of interesting side effects such as much higher term deposit rates and lower share prices.

It’s a good thing that savers are now able to achieve a stronger cash return. Some financial institution term deposits are now offering a rate of 4% or more on a one-year product.

However, while I like earning a stronger, safe return, I don’t like how inaccessible the money is during the life of that term deposit, unless the saver gives up some, or all, of the interest.

For me, there are three other places I’m putting my money for passive income.

High-interest savings accounts

For starters, I’d rather put my ‘safe money’ in high-interest savings accounts (or HISAs). They are just as safe as a term deposit, they can offer extremely competitive interest rates (depending on the financial institution), and I can more easily access my money without losing a year’s worth of interest.

Plus, it’s easy to add more cash to the HISA and benefit from the extra interest.

I’m not expecting to become rich from a HISA, but it’s now offering a good enough return to be worthwhile to hold some cash for passive income.

Fully franked dividends

One of the best things about investing in Australian companies is that when they pay income tax, they generate franking credits.

These franking credits are then attached to dividends paid by companies to investors, a fine source of passive income.

Franking credits are refundable tax credits. For taxpayers in a high tax bracket, franking credits can reduce the tax owing on the dividend. For taxpayers in a lower (or no) tax bracket, franking credits can be refunded when the tax return is done.

In practical terms, as an example, it can turn a $70 cash dividend into a grossed-up payout of $100.

There are many ASX shares that pay fully franked dividends such as Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES), and Coles Group Ltd (ASX: COL).

Real estate investment trusts

We don’t need to buy a property ourselves to get exposure to the passive income from commercial property in Australia.

There are businesses on the ASX called real estate investment trusts (REITs) that own a portfolio of properties. The great thing about these investments is that they own a portfolio of properties, not just one property in one location.

REITs can be invested in various properties such as office buildings, shopping centres, warehouses, farms, pubs, service stations, and so on.

At the moment, the only REIT in my portfolio is Rural Funds Group (ASX: RFF). But, there are plenty of other REITs out there such as Charter Hall Long WALE REIT (ASX: CLW), Centuria Industrial REIT (ASX: CIP), and Goodman Group (ASX: GMG).

I like the distributions that they pay from their net rental income.

The post My 3 best forms of passive income for 2023 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• These blue chip ASX 200 shares are post-results buys: experts
• ASX investors: 3 of the best Aussie dividend stocks to buy this year
• How much do you need in ASX shares to give up work and live only off dividend income?
• Boost your passive income with these ASX shares: analysts
• Passive income boost! 2 excellent high yield ASX dividend shares to buy: experts

Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 Coles Group, Rural Funds Group, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/tRcOeUn

The Zip Co Ltd (ASX: ZIP) share price is trading lower on Thursday.

In morning trade, the buy now pay later (BNPL) provider’s shares are down 2.5% to 55 cents.

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

Zip share price lower on big loss

• Half-year revenue up 19% to a record of $351 million
• Net transaction margin (NTM) up 20 basis points to 2.5%
• Group credit losses down 50 basis points to 1.9% of total transaction value (TTV)
• Cash gross profit up 20% to $121.7 million
• Core cash EBTDA loss of $33.2 million
• Loss after tax of $242.5 million
• Cash and cash equivalents of $153.9 million

What happened during the half?

For the six months ended 31 December, Zip reported a 19% increase in revenue to a record of $351 million. This reflects a 10% increase in TTV to $4.9 billion and a 50 basis point increase in its revenue margin to 7.1%.

Underpinning its TTV growth was a 4% lift in active customer numbers to 7.3 million, a 20% jump in merchant numbers to 97,500, and a 17% increase in transaction numbers to 42.2 million.

Combined with its cost reductions and improving margins, this ultimately led to a $27.3 million improvement in its core cash EBTDA to a loss of $33.2 million from a loss of $60.5 million a year earlier.

Finally, on the very bottom line, Zip reported a loss after tax of $242.5 million. This includes a number of items such as merger termination fees, incentive payments, effective interest on convertible notes, and goodwill impairment.

At the end of the period, Zip had a cash and cash equivalents balance of $153.9 million. It believes this leaves it well funded with sufficient available cash and liquidity to deliver on its target of positive group cash EBTDA during FY 2024.

Particularly given that Zip US and NZ remain on track to exit FY 2023 with positive cash EBTDA on a sustainable basis, along with Zip’s AU business which has been cash flow positive for four years.

In addition, the company has completed the strategic review of its rest of world and non-core operations and is now taking action to divest, restructure, or wind down these businesses. This is expected to neutralise cash burn and deliver additional cash inflows during the second half.

Management commentary

Zip’s Co-Founder and Global CEO, Larry Diamond, was pleased with the half. He said:

We are pleased to deliver another strong set of results driven by record transaction volumes and revenue, and improved credit losses and margins. Zip continues to accelerate its path to profitability as we execute on our strategic priorities of sustainable growth, a focus on our core markets and right-sizing our cost base.

Although topline growth has been tempered by deliberate adjustments to risk settings, our strong net margin performance is a very clear proof point of the successful execution of our strategy to increase revenue margins and reduce credit losses. We continue to streamline our business, with Cash EBTDA used in core markets and corporate costs improving by $27.3m to ($33.2m) for the half. We expect this to improve further again in the second half of FY23 and this very strong result has us well and truly on the path to positive group cash EBTDA during HY24.

Outlook

Management provided a short update on its performance so far in the second half.

It advised that trading was strong in January, with TTV up 9%, revenue up 12%, and its cash NTM at 3.5%.

It also revealed that its US net bad debts for January was trending at 1.4% of TTV on a cohort basis.

The post Zip share price lower on $243m first-half loss appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Earnings preview: Here are the ASX shares reporting on Thursday
• Own Zip shares? Here’s an earnings preview
• Here are the 10 most shorted ASX shares this week
• Why Baby Bunting, Integral Diagnostics, Pilbara Minerals, and Zip shares are falling
• ASX BNPL shares deep in the red as ASIC turns up the regulatory heat

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 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.

from The Motley Fool Australia https://ift.tt/NPFLpay

The Mineral Resources Ltd (ASX: MIN) share price is trading lower on Thursday.

In morning trade, the mining and mining services company’s shares are down 1.5% to $82.61.

Why is the Mineral Resources share price falling?

Investors have been selling down the Mineral Resources share price today after broad market weakness offset the release of an update on the company’s lithium operations.

According to the release, the company has entered into binding agreements with lithium giant Albemarle Corporation (NYSE: ALB) for two separate transactions.

The first transaction is for a restructure of its arrangements relating to the existing MARBL Joint Venture, which will see Mineral Resources’ ownership of the Wodgina mine increase from 40% to 50%.

However, in exchange, Mineral Resources will reduce its ownership of the first two trains of the Kemerton Lithium Hydroxide Plant from 40% to 15%.

Conversion arrangement

The two parties have also committed to convert their respective share of Wodgina spodumene concentrate into lithium battery chemicals through Albemarle-owned conversion assets or using third party tollers.

Each party will fund their proportionate share of the cost of the conversion assets, with conversion cost payments to be made in stages. Mineral Resources will make an initial US$350 million payment immediately following receipt of regulatory approvals for the Wodgina and Kemerton restructure, with other payments to be made as conversion capacity is developed and provided.

In addition, Albemarle will supply Mineral Resources’ 15% share of spodumene concentrate for use by Kemerton from the Greenbushes mine. The company will pay the benchmark price for its share of Greenbushes spodumene concentrate.

Downstream Joint Venture

Finally, Mineral Resources and Albemarle have committed to jointly own lithium conversion assets, which will convert Wodgina spodumene concentrate into lithium hydroxide or lithium carbonate, up to a nominal capacity of 100ktpa. This is subject to receipt of required regulatory approvals.

If all goes to plan, Mineral Resources will acquire a 50% interest in Albemarle’s 100% owned Qinzhou and Meishan plants in China.

‘World-leader in lithium mining’

Mineral Resources Managing Director, Chris Ellison, was very pleased with the agreement. He said:

We are delighted to have reached these binding agreements, which cement MinRes’ place as a world-leader in lithium mining and leverage our partner Albemarle’s strong track record in battery chemical production.

We also continue to study options to invest in capacity for future downstream lithium production in Australia. By growing our battery chemicals business and expanding into global chemical marketing, MinRes will become one of the world’s largest fully integrated lithium chemical suppliers to auto manufacturers, capitalising on the increasing demand for sustainable battery mineral products.

The post Mineral Resources share price lower despite plan to be a ‘world-leader in lithium mining’ appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Here’s the latest ‘bearish news’ from brokers on ASX 200 lithium stocks
• Here are the top 10 ASX 200 shares today
• Why is the Core Lithium share price rebounding 5% on Tuesday?
• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Mineral Resources share price slumps despite major Norwest takeover milestone

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.

from The Motley Fool Australia https://ift.tt/SHGqUML

Woodside Energy Group Ltd (ASX: WDS) shares will soon have their turn in the spotlight once the S&P/ASX 200 Index (ASX: XJO) energy giant announces its result for 2022. Could this be a good time to invest in the business before the company reports?

Woodside is currently generating enormous profits from the elevated energy prices that have followed the Russian invasion of Ukraine.

First, we’ll look at how much profit the business is expected to have made in the 12 months in December 2022.

Profit expectations

According to Commsec, Bloomberg numbers suggest Woodside is projected to generate a net profit after tax (NPAT) of US$5.5 billion and pay a dividend of 62.7 US cents per share. Taking into account the exchange rate, that dividend could translate into a dividend per share for Aussies of 92 AU cents.

Considering the dividends have been fully franked, that means the ASX 200 energy share’s dividend could represent a grossed-up dividend yield of 3.8% for just the one payment.

In earnings per share (EPS) terms, Commsec numbers suggest Woodside shares could generate $3.26 of profit per share. If this forecast is correct, then the Woodside share price is valued at under 11 times FY23’s estimated earnings.

It wouldn’t be surprising to see that Woodside has generated a lot more profit, particularly thanks to the increased scale the business has after its merger with the petroleum division of BHP Group Ltd (ASX: BHP). Greater scale usually comes with a number of benefits.

Woodside is working on enacting synergies between the two businesses so that it’s stronger together, rather than just two separate businesses that have been joined.

Is the Woodside share price a buy?

The ASX 200 energy share’s earnings have jumped higher. But, when it comes to cyclical businesses, I think it pays to be cautious about buying when resource prices are strong.

However, I don’t think energy prices are going to be as volatile as the iron ore price has been in the last few years. Unless Russian energy is suddenly accepted back into the global energy system, I can’t see LNG prices sinking over the next few years.

I think that Woodside is very good at what it does, and its dividend income could be strong to 2025. I’m just not sure where energy prices are headed and, to me, I wouldn’t choose to invest after the business’ strong run.

I’d rather invest when sentiment is low and the Woodside share price is lower than it is today.

It might be possible to buy the business at a cheaper price. We don’t have to invest right now, and there are plenty of other ASX shares to choose that could make more sense.

The post Should I buy Woodside shares before the ASX 200 energy giant reports next week? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Own Woodside shares? Here’s what the market is expecting from its full-year results
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• How I’d generate a $20,000 second income from Woodside shares

Motley Fool contributor Tristan Harrison 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.

from The Motley Fool Australia https://ift.tt/FpStAVh

Do you have your sights on becoming a millionaire? It’s a very possible achievement for those invested in ASX dividend shares.

Though, it will likely take time. The stock market – like most other investment vehicles – is rarely an overnight millionaire-maker.

Here’s how I’d aim to build a $1 million portfolio by drip-feeding $500 a month into ASX dividend shares.

Building wealth over time

The S&P/ASX All Ordinaries Index (ASX: XAO) has returned 4.6% annually over the last 10 years, according to data from S&P Dow Jones Indices.

At that rate, it would take around 50 years for a $500 monthly contribution to become a million. Though, past performance isn’t an indication of future performance.

Of course, that’s likely better than simply putting $500 of cash into a draw each month – in which case it would take more than a lifetime to save $1 million.

However, I’d like to expedite my path to becoming a millionaire. And I’d use ASX dividend shares to do so.

I’d aim to speed up the process with ASX dividend shares

ASX shares at home on the All Ordinaries boasted an indicative dividend yield of 4.32% as of 31 January, according to S&P Dow Jones Indices.

At that rate, our $500 monthly investment – $6,000 annually – could yield $259.20 of passive income by this time next year.

But I would shoot a little higher. I also wouldn’t take my dividends as spending money.

I would aim to build a portfolio of ASX shares capable of providing an average 7% dividend yield and compound any and all payouts. That means using my dividends to buy more shares.

Buying individual shares rather than, say, an exchange-traded fund (ETF) tracking an ASX index carries more risk. But I personally think the potential rewards could be worth it.

By reinvesting my dividends, I could turn my $500 a month into $1 million in just 38 years, assuming a consistent 7% dividend yield.

And that’s before any potential share price gains or tax benefits from franking credits.

Managing risk

As I mentioned above, stock picking can house greater risk than other investment styles. A large part of that is due to the instant diversification that comes with buying an index-tracking-ETF, for instance.

Thus, I would make a point to build a diverse portfolio, incorporating shares of various shapes and sizes, from various sectors.

Though, I would also focus on buying quality shares.

What makes a share good quality is subjective. I personally think quality companies boast strong balance sheets, leadership, and competitive advantages, for a start.

The post I’d drip-feed $500 a month into ASX dividend shares to try for a million appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Mineral Resources share price lower despite plan to be a ‘world-leader in lithium mining’
• Should I buy Woodside shares before the ASX 200 energy giant reports next week?
• Should I buy Woolworths shares following the ASX 200 supermarket giant’s latest results?
• Where’s the competition?
• Experts name 2 ASX All Ords shares to buy after their excellent results

Motley Fool contributor Brooke Cooper 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.

from The Motley Fool Australia https://ift.tt/3SUlP5b

One of the blockbuster ASX 200 earnings reports this week came from the blue-chip giant Woolworths Group Ltd (ASX: WOW). Woolworths reported its earnings for the first half of FY2023 (the six months to 31 December) just yesterday. 

Investors clearly liked what the supermarket kingpin had to say. By the end of yesterday’s trading session, the Woolworths share price had vaulted a solid 1.99% higher to $37.45 a share:

This was understandable, seeing as Woolworths put up some pretty strong numbers.

As we went through at the time, the grocer reported a 4% rise in sales to $33.17 billion. Earnings before interest and tax (EBIT) rose 18.4% to $1.64 billion, while net profit after tax (NPAT) spiked 14% to $907 million.

Income investors would have been especially tickled. Woolies upped its interim dividend substantially. The company is soon set to pay out 46 cents per share, fully franked. That’s a 17.9% lift over last year’s corresponding dividend payment.

Even better, Woolworths also told investors that in the first seven weeks of the half-year ending 30 June this year, Australian food sales are up 6.5% against last year’s numbers. New Zealand food sales have lifted 6.3% and Big W sales by a pleasing 9.7%.

So all in all, it was arguably a very solid earnings report from Woolies. As we noted yesterday, the company outperformed most of the market’s expectations, which would have delighted investors even further.

But this begs the question: is the Woolworths share price a buy, now that these earnings have seen the light of day?

Is the Woolworths share price a post-earnings buy right now?

Well, one ASX broker who thinks so is Goldman Sachs. Earlier this month, we looked at Goldman’s buy rating on Woolies shares.  

And yesterday, the broker argued that these earnings contained nothing to dent its confidence.

Here’s some of what Goldman said on Woolworths’ half-year results:

The margin outcome for Australia Supermarket and the better than expected run-rate in 2H23 first 7 weeks is the bright spot…

Overall we continue to believe that the more advantaged omni-channel execution capability of WOW will continue to drive longer term market share gains and cost efficiencies for EBIT margin expansion. Reiterate Buy.

Goldman has maintained its buy rating on Woolies shares, together with its 12-month share price target of $41.20. If that target is realised in the next year, investors would enjoy a 10% upside from where the shares are today. That doesn’t include any returns from Woolworths’ fully-franked dividends either.

So that’s at least one ASX broker who rates Woolworths shares as a post-earnings buy. We’ll have to wait for what the next 12 month has in store to see if Goldman is on the money. But no doubt investors will be pleased as punch with that assessment.

At the last Woolworths share price, this ASX 200 grocery giant has a market capitalisation of $45.56 billion, with a dividend yield of 2.46%.

The post Should I buy Woolworths shares following the ASX 200 supermarket giant’s latest results? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• The Woolworths dividend has just been boosted by 18%. Here’s the lowdown
• Woolworths share price higher on strong result and ‘better than expected’ second-half start
• Woolworths share price on watch amid first-half earnings beat
• 5 things to watch on the ASX 200 on Wednesday
• Own Woolworths shares? Here’s what the market is expecting from its half year results

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.

from The Motley Fool Australia https://ift.tt/zRAQuct