The Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price is plummeting after coming out of a trading halt this morning.

At the time of writing, the biopharmaceutical company’s shares are fetching at $1.45, down 26.95%.

What’s driving the Paradigm share price lower?

Investors are scrambling to offload Paradigm shares amid an impending share dilution from the company.

According to its announcement, Paradigm advised it has launched a fully underwritten $66 million capital raise.

This comprises of a $45.7 million institutional placement to domestic and offshore investors and a one for 15 pro-rata non-renounceable entitlement offer of $20.3 million at $1.30 per share.

The company noted the placement received strong participation from domestic and offshore institutional investors. This will result in the issue of approximately 35.1 million Paradigm shares.

The record date for the entitlement offer is on Thursday 18 August 2022.

Eligible shareholders subscribing for their entitlement can also apply for additional shares under a top-up facility. However, this will be capped at 100% of an eligible shareholder’s entitlement.

The entitlement offer will result in the issue of approximately 15.6 million shares.

Following completion of the capital raise, the company will have a proforma cash position of $108.5 million. This will provide sufficient cash flow to see through its operations into the 2024 calendar year.

What will the funds be used for?

The monies raised from the capital raise will be used to fund a number of initiatives that include the following:

• Paradigm’s phase 3 clinical program and new drug application (NDA)-related activities;
• Business development-related activities;
• Product development-related activities (such as auto-injector); and
• Working capital.

Paradigm chair Paul Rennie commented:

I would like to thank all institutional Investors who participated in the placement, and I am delighted that all Paradigm shareholders now have the right to also invest under the fully under-written non-renounceable entitlement offer.

Personally, I will be subscribing for $300,000 of new Paradigm stock under the entitlement offer. Having a strong balance sheet is important to Paradigm so we can maintain or accelerate the momentum of our Phase 3 clinical trial. A strong balance sheet is important as we have commercial discussions in the future.

Paradigm share price review

It has been an interesting year for Paradigm shares, treading lower for most of 2022 until recently shooting higher.

The company’s share price reached a year-to-date high of $2.17 on 9 August before going into a trading halt the following day.

Based on today’s price, Paradigm has a market capitalisation of roughly $332 million, with more than 228 million shares outstanding.

The post Paradigm Biopharmaceuticals share price freefalls 27% following $66m cap raise appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 Westpac Banking Corp (ASX: WBC) share price is in the red in morning trade.

Westpac shares closed on Friday at $22.66 and are currently trading for $22.42, down 1.06%.

Financial shares are broadly underperforming today, with the S&P/ASX 200 Financials Index (ASX: XFJ) down 0.33% at the time of writing compared to a 0.31% gain posted by the S&P/ASX 200 Index (ASX: XJO).

However, the Westpac share price is the only one of the big four banks in the red.

What are ASX investors considering?

The Westpac share price may be coming under some selling pressure following the release of the bank’s third quarter (Q3) results.

On the positive end of that release, Westpac reported that its capital, credit, and funding positions remained strong in Q3.

With investors increasingly cautious about the outlook for a potential uptick in bad debts as interest rates rise for the first time in a decade, among the good news was the 0.04% drop in the bank’s stressed assets to total committed exposures (TCE), which declined to 1.06% in Q3.

However, as my fellow Fool James Mickleboro noted this morning, “No details were provided in respect to its profits, margins, or cost cutting during the quarter. Investors may have to wait until its full-year results later this year for that unfortunately.”

That lack of detail may be seeing some investors hitting the sell button today.

Westpac share price snapshot

Westpac has been a strong performer in 2022, with the share price up 3.8% since the opening bell on 4 January. That compares to a year-to-date loss of 7% on the ASX 200.

The post Westpac share price slips following release of Q3 update 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 recommended Westpac Banking Corporation. 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 Nearmap Ltd (ASX: NEA) share price has jumped to its highest level this year after announcing it has received a takeover offer and providing a trading update.

The aerial imagery technology company this morning announced it has received a non-binding indication from Thoma Bravo L.P. to acquire its shares for $2.10 a pop.

The offer represents a 39% premium on Nearmap’s last closing price of $1.51 on Friday. Moreover, the offer is 67% above its six-month volume weighted average price.

What the takeover values the Nearmap share price at

The Nearmap share price rallied 33% to $2.01 in early trade on Monday, but remains below the bid price. This probably reflects the risk that the deal could fall through and the market’s view that Nearmap won’t get a second bidder.

Not that management hasn’t tried. It said it received other proposals but they weren’t good enough to be pursued further.

The indication of interest by Thoma Bravo was received on 6 July and both parties have been in advanced talks. This proposal was credible enough for Nearmap to grant the bidder non-exclusive due diligence that led to the $2.10 a share offer.

The takeover proposal values the Nearmap share price at around $1,055 million on a fully diluted basis.

Bittersweet news for the Nearmap share price

While the takeover news has excited the market, longer-term shareholders might still be disappointed. The shares were trading at over $4 in June 2019 and Nearmap undertook a share placement in 2020 at $2.77 a share.

Shareholders that came in on the share purchase plan paid a more attractive $2.30 a share. But that’s still below Thoma Bravo’s offer price.

At least the takeover (if successful) will remove the litigation risk to shareholders. Nearmap is being sued by its rival in the United States for technology infringement.

Details of the takeover

Thoma Bravo is one of the largest private equity firms in the world. It has more than US$114 billion in assets under management.

The proposal is subject to the usual conditions, such as regulatory approvals. Nearmap has to pay a break fee of up to US$3 million.

Nearmap’s trading update

Separately, Nearmap said that the group’s annual contract value (ACV) for FY22 will come in at the top end of its guidance.

Management expects ACV to hit $159.9 million at constant currency. This compares to its forecast of $150 million to $160 million.

It also said it was holding $93.7 million in cash as it only used around $20 million to support growth of the business (ex litigation costs). That’s around $10 million less than it originally thought.

The Nearmap share price fell 28% over the past year before today’s rally. In comparison, the S&P/ASX 200 Index (ASX: XJO) shed around 7% of its value.

The post Nearmap share price jumps 30% on takeover news appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau has positions in Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nearmap Ltd. The Motley Fool Australia has positions in and has recommended Nearmap Ltd. 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 Beach Energy Ltd (ASX: BPT) share price is falling today amid the company’s FY22 earnings.

The energy company’s share price is currently trading at $1.69, an 8.65% fall. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is rising 0.56% today.

Let’s take a look at what Beach Energy reported to the market.

Beach Energy reports

Key points in Beach Energy’s results include:

• Production fell 15% to 21.8 million barrels of oil equivalent (MMboe)
• Underlying EBITDA leapt 17% on FY21 to $1.1 billion
• Underlying NPAT surged 39% to $504 million
• Total revenue jumped 13% to $1.8 billion
• $765 million net cash position and total liquidity
• A dividend of 1 cent per share to be paid on 30 September

What else did the company report?

Beach Energy’s underlying NPAT lifted despite lower production due to higher realised gas prices and revenue.

At the end of FY22, Beach had 283 MMboe of 2P oil and gas reserves, down 17% compared to the previous year. These reserves fell due to the Trefoil development getting pushed back and less exploration.

Unit field operating costs are forecast to rise from $11.74 per boe in FY22 to between $12 to $13 per boe in FY23.

Beach Energy announced a new emissions intensity reduction target of 35% by 2030.

The company completed offshore Otway Basin drilling, delivering a new gas discovery at Artisan field and six development wells within the Geographe and Thylacine fields.

Construction and development of the Waitsia stage two project in the Perth Basin is now underway.

Management commentary

Commenting on the results, the chief executive officer said:

Despite lower production, increased demand and pricing for our products saw a rise in earnings and cash flows.

Beach’s multi-basin strategy is to develop the assets within our portfolio, keep our plants processing at higher rates for longer, and in doing so maximise gas supply.

The benefits of this strategy were clearly evident in our financial results this year

What’s ahead

Beach is forecasting production of between 20 to 22.5 MMboe in FY23 compared to 21.8 MMboe in FY22.

Capital expenditure is predicted to be between $800 million and $1 billion, in comparison to $872 million in FY22.

Further commenting on the outlook for FY23, Engelbrecht said:

We have a busy schedule in FY23 completing the major projects that will deliver material free cash flow from FY24.

Key activities include connecting the Thylacine and Enterprise wells to the Otway Gas Plant, Waitsia stage two progress, Perth basin exploration drilling, ongoing Cooper Basin drilling, and planning for exploration and development activity in the Otway, Bass and Taranaki basins

Beach Energy share price snapshot

The Beach Energy share price has soared 53% in the past year, while it has lifted 38% year to date.

In the past month, Beach Energy shares have climbed 8%.

For perspective, the ASX 200 index has shed nearly 7% in the past year.

The post Beach Energy share price tumbles 9% as production slides appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

When the market is down as sharply as it has been in the first part of 2022, investing can be incredibly scary. It almost feels like you’re throwing good money after bad as every time you make a deposit, you see a huge chunk of it seem to evaporate before your eyes.

And as you watch your account balances shrink, it’s almost as if your future goals are slipping away before your eyes, too. Yes, when you look at your investments vs. a bear market, it can be ugly. Still, there’s a reasonable strategy you can use to come out on top.

First: Get your financial house in order

Bear markets often bring with them job losses. Even if you keep your job, life happens, and unexpected costs may show up at a time when your stocks are down. As a result, it’s important to have an emergency cash fund in an FDIC-insured account just in case. No, you won’t earn a huge return on that money, but you’ll have an extremely high likelihood of the cash being there if you need it. That can dramatically reduce your risk of being forced to sell your stocks when they’re down in a bear market.

In addition to the emergency fund, it’s critical to get your debts under control. It can be OK to invest when you have debt, but that debt really should have three key characteristics:

As its share price drops during a bear market, ask yourself why it’s dropping. It could be because the company’s future has soured or because the market is simply scared. If the company’s prospects still look strong but its stock price is weak, you just might have a legitimate bargain on your hands. Using a valuation technique like the discounted cash flow model to seek out those bargains can help you deliver better.

• It should have a low interest rate. It makes no sense to borrow money at a higher rate than you can reasonably expect to earn on your investments over time. Even if it’s close, paying off your debt has a guaranteed rate of return, while the stock market’s returns are never guaranteed.
• It should have a payment you can afford without wrecking your lifestyle. It’s tough enough to invest in a healthy market, but when the bear comes growling, the stress of a hefty payment makes it even harder to make smart decisions.
• It should play a key role in your future. If your debt offers you something critically important — such as a place to live, the opportunity to earn a living, or something you need to sustain your life — the benefits may very well be worth the risk vs. the costs of keeping the debt.

Next: Recognize what stocks really are

When all is said and done, a share of stock is nothing more than a partial ownership stake in a company. That share gets its value based on the company’s performance and prospects over time.

In that case, a bear market can actually be a good time to pick up more shares of a great business at an inexpensive price. That shift in perspective to focus on the business instead of the shares can go a long way toward helping you calm your nerves and make smarter long-term decisions.

Finally: Realize that nobody gets it right every time

Although investing can be a great way to build wealth over time, no investor gets it perfect, not even Warren Buffett. You will make mistakes. In addition, even if your process is sound, sometimes companies’ prospects will suddenly sour.

As a result, it’s important to have a diversified approach to your investments. Diversification won’t keep bad things from happening to your portfolio. What it can do is reduce the impact a single company’s stumble will have on your overall portfolio. That’s an important part of being able to stay invested during a bear market and giving yourself the best chance to emerge in a better spot on the other side of one.

Mix it together with a long-term focus to beat the bear

When you combine a solid personal financial foundation with a value-based investing approach and a healthy respect for diversification, you have a powerful toolkit for beating a bear market. Just remember that it will likely take time for the market to come to its senses, so have the patience to let your shares do their thing.

Over the long haul, a company’s market price should respond to its fundamental business strength, not just the market’s sentiments. With the patience to let that process play out, you can ultimately put that bear market behind you.

By making today the day you put these pieces together, you set yourself up with a great toolkit for coming out on top of a bear market. The sooner you get started, the sooner you can actually start fighting back. So, start harnessing the power of your inner bear fighter now.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Your investments vs. a bear market: How to come out on top appeared first on The Motley Fool Australia.

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Chuck Saletta 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Argo Investments Limited (ASX: ARG) share price is in the green in morning trade, up 0.8%.

Argo shares closed on Friday trading for $9.50 and are currently trading for $9.57.

This comes following this morning’s release of the ASX listed investment company’s (LIC) results for the financial year ending 30 June (FY22).

Here are the highlights:

Argo share price lifts on record profits

• Record full-year profit of $312.9 million, up 79.9% year on year
• Earnings per share (EPS) excluding demerger dividends of 34.3 cents, up 60.3% from FY21
• Final dividend of 17 cents per share, fully franked, an increase of 21.4% year on year
• Management expense ratio remained unchanged from the prior year at 0.14%

What else happened during the 2022 financial year?

The company noted that its record profits in FY22 were supported by all-time high dividend incomes it received from a number of stocks in its investment portfolio, with “significantly higher dividends” from S&P/ASX 200 Index (ASX: XJO) mining giants BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).

The LIC’s profits were also boosted by $61.7 million in one-off, non-cash income from the merger of BHP’s oil and gas assets with Woodside Energy Group Ltd (ASX: WDS) along with Tabcorp Holdings Ltd’s (ASX: TAH) demerger of The Lottery Corporation.

The strong profits boosted the full year, fully franked dividend to 33 cents per share, up 17.9% from the 28 cents per share paid in FY21.

Argo said the year was a volatile one, particularly the second half, with interest rate rises, supply line disruptions, and Russia’s invasion of Ukraine. However, through its conservative investment approach, the company said it avoided investing in “many overpriced technology stocks and speculative mining businesses which fell sharply during the year”.

According to the release, this saw the Argo share price return 1.6%, outperforming Australian shares by 8.1%.

What’s next?

Looking ahead, Argo said the recent rally in ASX shares has been driven by expectations interest rates will top out sooner than previously believed.

The company cautioned, however, that, “Despite the general optimism, current indicators provide conflicting signals for the trajectory of the Australian economy.”

On the plus side of the ledger are resilient consumers, companies with strong balance sheets, and record low unemployment. Areas of concern are rising interest rates and the impact on homeowners, continuing disruptions and uncertainties from COVID, and geopolitical unrest.

Argo concluded:

While we expect the Australian and global economies will continue to confront challenges in the immediate term, Argo remains well-positioned with a strong balance sheet, no debt and cash on hand to capitalise on likely market volatility.

We continue to take a long-term share market view and consistently apply our investment approach which has stood the test of time since 1946.

Argo share price snapshot

So far in 2022, the Argo share price is down 6%, compared to a year-to-date loss of 7% posted by the All Ordinaries Index (ASX: XAO).

Longer term, Argo shares have gained 19% over the past five years.

The post Argo share price lifts on record 2022 financial year profit results appeared first on The Motley Fool Australia.

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• Own Argo shares? Here’s what you’re invested in

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 Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is in reverse on Monday morning.

This follows the release of the company’s full year results for the 2022 financial year.

At the time of writing, the regional bank’s shares are down 5.01% to $10.24.

Bendigo Bank share price sinks amid a ‘challenging and competitive environment’

• Total income up 0.4% to $1,709.9 million
• Statutory net profit after tax down 6.9% to $488.1 million
• Cash earnings after tax up 9.4% to $500.4 million
• Fully franked final dividend per share of 26.5 cents
• CET1 ratio up 11 basis points to 9.68%

What happened in FY2022?

For the 12 months ended 30 June, Bendigo Bank reported a 9.4% increase in cash earnings after tax to $500.4 million. This was underpinned by disciplined cost management and lower loan provisions.

The net interest margin (NIM) declined 11 basis points in the previous half to 1.69% reflecting the historically low interest rate environment. Variable and fixed residential loan competitive pressure led to a decline of around 15 basis points over the first half.

In addition, the company’s Common Equity Tier 1 (CET1) ratio – a key measure of financial strength – rose again, up 11 basis points to 9.68%. This is above Australian Prudential Regulation Authority’s (APRA) benchmark target for standardised banks. Bendigo Bank stated that its strong capital position reflects a well-managed balance sheet and strong risk management.

The robust performance allowed the Bendigo Bank board to declare a fully franked final dividend of 26.5 cents per share. This takes the full year dividend to 53 cents apiece, up 6% from the 50 cents in the prior corresponding period.

Management commentary

Bendigo Bank’s CEO and managing director, Marnie Baker touched on the company’s performance in FY2022. She said:

These results show we have delivered what we promised in a challenging and competitive environment. Bendigo and Adelaide Bank has delivered continued growth in loans, deposits and customer numbers. We have reduced costs and improved our cost to income ratio while maintaining a strong balance sheet and preserving our credit quality.

We have achieved a fourth consecutive half of positive jaws and our transformation agenda is on track. Our performance for FY22 is evidence that our strategy is working. The Bank is proud of the progress it has made and the discipline we have shown however we know we have more to do.

What’s the outlook for FY2023?

No guidance has been given for FY2023. However, Baker spoke about focusing on the company’s overall returns. She concluded:

What we hoped was going to be a relatively smooth economic landing coming out of COVID has got a little bumpy, as we face into growing inflationary pressures, a tight jobs market, rising wages and general global uncertainty.

Cash rate increases from the Reserve Bank are beginning to have an impact on property values in some markets and we can expect credit growth to moderate and competition to remain intense.

Taking inflationary headwinds into account, our aim is to keep costs broadly flat. Our investment spend will remain at current levels through to FY24 before declining and impairment expenses should return to historical averages over the medium term.

The post Bendigo Bank share price slumps 5% following FY22 results appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Aaron Teboneras 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 Bendigo and Adelaide Bank Limited. 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 JB Hi-Fi Limited (ASX: JBH) share price is edging into the red on Monday morning. This follows the release of the Australian retailer’s official financial reports for FY22.

At the time of writing, JB Hi-Fi shares are down 0.33% to $45.40 apiece after initially climbing on market open. For comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.54%.

Let’s check the highlights of the company’s reports.

JB Hi-Fi share price lifts on another record year

• Total sales up 3.5% to a record $9.23 billion
• Online sales lifted 52.8% to $1.63 billion
• Earnings before interest and tax (EBIT) up 6.9% to $794.6 million
• Net profit after tax (NPAT) up 7.7% to a record $545 million
• Declared final fully franked dividend of $1.53 per share, up 43% from the prior year

Notably, these strong results have flowed through during the first full financial year under JB Hi-Fi group CEO Terry Smart.

What else happened in FY22?

The latest financial year was one defined by online sales and strong consumer demand for JB Hi-Fi. According to the company’s reports, online sales accounted for 17.6% of all group sales in FY22. In the second half, despite all physical stores being open, online sales still represented nearly 12% of all sales.

Furthermore, sales in Australia were underpinned by demand for consumer electronics and home appliance products. Meanwhile, in New Zealand, total sales inched 0.3% higher to NZ$262.4 million from growth in visual, games hardware, and smart home categories.

Finally, the Good Guys segment recorded a 2.7% improvement in sales to $2.79 billion. This was bolstered by key product categories such as laundry, portable appliances, floor care, and dishwashers.

What did management say?

In light of the positive momentum, JB Hi-Fi group CEO Terry Smart stated:

These results reinforce the enormous trust our customers have in our brands and the strength of our multichannel offer, which continues to provide customers with choice on how to shop.

In terms of how a tightening economy may impact the retailer, Smart highlighted its value-oriented business as a beneficiary.

As we enter an increasingly uncertain retail environment and household budgets come under further pressure, customers will gravitate to trusted value-driven retailers. Our ongoing strategy of providing customers with the best value and outstanding service every day, will ensure our brands continue to deliver for our customers and remain a destination of choice into the future.

What’s next?

While the company did not provide future guidance, it did provide a July sales update. Last month, JB Hi-Fi Australia witnessed total sales growth of 9.7% compared to the prior corresponding period. However, the New Zealand division experienced a 0.9% reduction.

The Good Guys business also recorded a 7.8% lift relative to the prior period.

JB Hi-Fi share price snapshot

The JB Hi-Fi shareholder has had a slightly better experience this year compared to the S&P/ASX 200 Index. Year-to-date, JB Hi-Fi shares are down 5.73% compared to the benchmark’s disappointing 7.3% fall.

Based on today’s NPAT, the company now trades on a price-to-earnings (P/E) ratio of around 9.1 times. For context, the industry average currently sits at 10.5 times.

The post JB Hi-Fi share price dips as full-year dividend jumps 43% appeared first on The Motley Fool Australia.

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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 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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AGL Energy Limited (ASX: AGL) shares will likely be front of mind this week as the energy producer and retailer gears up to release its full-year earnings.

The S&P/ASX 200 Index (ASX: XJO) giant is expected to drop its financial year 2022 results on Friday, alongside many other market favourites.

The AGL share price slumped slightly over the last financial year. It’s currently trading at $8.51.

So, what might market watchers expect to hear of AGL’s earnings, dividends, and expenses later this week? Let’s take a look.

AGL shares in focus as the company gears up to report

Interested in AGL shares this reporting season? There are a number of reasons the company’s earnings might disappoint some market watchers.

Let’s start with the energy giant’s own expectations. AGL downgraded its full-year guidance back in May, blaming a generator fault at its Loy Yang A power station.

Its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) is now expected to come in between $1.23 billion and $1.3 billion. Meanwhile, its underlying after-tax profit is expected to be between $220 million and $270 million.

For context, it reported $1.66 billion of underlying EBITDA and an after-tax profit of $537 million for financial year 2021.

AGL also offered investors 75 cents per share of unfranked dividends in financial year 2021. Brokers have tipped that to fall significantly this time around.

AGL’s latest interim dividend was 16 cents – down 60% on the prior corresponding period.

While some brokers think the company’s final payout might match its interim dividend, others are sceptical. Indeed, many believe AGL’s final dividend for financial year 2022 will be in the single digits, as my Fool colleague Tristan reports.

AGL’s controversial demerger might also weigh on the stock this earnings season. The company ultimately binned its plan to split in two, but not before forking out $160 million.

Finally, AGL’s ASX 200 peer Origin Energy Ltd (ASX: ORG) dropped its June quarter earnings late last month. Its CEO Frank Calabria said the three months ended 30 June were “an extraordinarily challenging quarter for the energy industry globally and in Australia”.

Thus, the final stretch of financial year 2022 could have been rough on AGL too.

No doubt all eyes will be on the AGL share price on Friday when the company drops its full-year earnings.

The post Hoping to pounce on AGL shares? Here’s what to watch when the energy giant reports this week appeared first on The Motley Fool Australia.

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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.

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Australia has been called ‘the lucky country’ for a long time. Certainly, it has a large amount of in-demand resources. Iron ore, copper, gold, lithium, and so on can all be found here. But, interestingly, coking (or metallurgical) coal could also see strong and growing demand in the coming years.

Coal may not sound like a forward-facing commodity. But it’s important to note that there are two different types of coal.

Thermal coal is the coal that typically gets negative attention because it is used to generate energy and is seen as a major source of carbon emissions, adding to climate change.

But it is metallurgical coal that I want to talk about in this article. Metallurgical coal, also known as coking coal, is a vital part of the steel-making process when using a blast furnace.

There are several miners on the ASX that give exposure to metallurgical coal including Whitehaven Coal Ltd (ASX: WHC), Yancoal Australia Ltd (ASX: YAL), New Hope Corporation Limited (ASX: NHC), and BHP Group Ltd (ASX: BHP).

How could Australian metallurgical coal benefit?

While China is a big purchaser of Australian iron ore, Indian steel giant Tata Steel has big plans for using more Australian coking coal.

The Australian Financial Review reports that a large amount of Queensland coal already ends up in Tata Steel mills. As it stands, Tata Steel has mills in the UK, the Netherlands, Thailand, and India. It reportedly bought 33% of Australian metallurgical coal exports.

Now India wants to double its steel production to 300 mt annually by 2030.

Tata managing director Thachat Viswanath Narendran said (as reported by the AFR):

Demand for coking coal in India is going to grow, it is going to double in the next 10 years. India is already a bigger importer of coking coal than China.

The concern I have at this stage is that I don’t see too much investment happening in growing coking coal capacities in Queensland because there is concern about coal as a whole.

The Tata business said that India will “use a lot of coal for a long time because India doesn’t have gas”. It was noted that India is working on renewables, but it “can never fully substitute the grid”.

What about the net zero target of 2045?

On net zero concerns, Thachat Viswanath Narendran said:

The way we see it, even in 2045 we will be running blast furnaces, but we will have fully captured a lot of the carbon dioxide that is being emitted at that time. That is why carbon capture becomes a very important part of the solution. There will be a rising share of production without using coking coal, but there will not be [zero] production with coking coal, that may happen let’s say by 2070 or some time in the future.

The point is coking coal demand is not going to fall off a cliff. Tata Steel has a 2045 ambition, but no other steel producer in India has said net zero by 2045, and we are going to be only 20 per cent of the production in India. So there is a huge market for coking coal out there. It is not as though five or 10 years later there will no demand for coking coal.

In other words, coal could continue to be in demand for at least the rest of this decade.

Coal miner snapshots

Let’s check ASX coal shares over the last six months:

The New Hope share price has risen 78%.

The Yancoal share price has inicreased 61%.

The Whitehaven share price has gone up 117%.

The post Why India can’t get enough of Aussie coking coal and which ASX shares have exposure appeared first on The Motley Fool Australia.

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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.

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