The Airtasker Limited (ASX: ART) share price has hit the ASX boards at last on Tuesday morning following the successful completion of its initial public offering (IPO).

And what a start to life as a listing company it has had! At the time of writing, the shares of Australia’s leading marketplace for local services are trading at $1.16.

This means the Airtasker share price is up 78% from its listing price of 65 cents.

What is Airtasker?

Airtasker operates in the online labour marketplace industry for local services.

Its platform allows customers to easily search for relevant independent workers and provides independent workers with access to a wide base of potential customers. Its main focus is the local services segment of the labour services market. This includes everyday tasks such as handyman jobs, domestic cleaning, and business administration.

According to its prospectus, the total addressable market for local services in Australia was estimated to be $52 billion in 2019.

However, while Australia is its main market at present, the company operates in several other international markets. This includes Ireland, New Zealand, Singapore, the United Kingdom, and the United States.

Management notes that the aggregated total addressable market was estimated to be $591 billion in 2019.

The Airtasker IPO

Airtasker raised a total of $86.3 million through the issue of 23.1 million shares and the sale and transfer of 105,6 million shares at an issue price of $0.65 per share.

From these funds, $15 million will be received by Airtasker, which will be used for marketing, product development, and working capital.

The remaining $68.7 million will provide existing shareholders with an opportunity to realise all or part of their investment in Airtasker.

As a result of the above, Airtasker hits the ASX boards with 420.6 million shares outstanding.

Based on this and the latest Airtasker share price, this gives it a market capitalisation of almost $500 million.

Management comments

Airtasker’s CEO, Tim Fung, was very pleased with the success of the IPO.

He said: “We’ve been absolutely delighted by the response Airtasker received from institutional and retail investors in our IPO which was more than 5X oversubscribed. But an even more important signal is the demand we received from our Tasker community and our staff, who subscribed for shares more than 10X our initial expectations.”

“We have an incredible foundation to build from and we’re excited to be taking our new shareholders on the exciting journey to fulfill Airtasker’s mission: to empower people to realise the full value of their skills.”

Judging by the Airtasker share price performance today, investors appear just as positive as Mr Fung.

More reading

• Airtasker’s ASX debut happens tomorrow, after 24-hour delay
• Airtasker IPO: staff demand 10 times the shares offered
• One person earned $250,000 on Airtasker last year. Now it’s listing

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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Challenger Exploration Ltd (ASX: CEL) has announced that it has hit outstanding sampling results at its flagship Hualilan Gold Project in Argentina. A positive stream of high-grade mineralisation news has pushed the Challenger Exploration share price up almost 50% this year. Although the company is in its early exploration days, the positive news continues to add to its overall growth strategy. With this in mind, Challenger aims to become a globally significant gold producer.

Challenger Exploration share price up 5% on sampling results 

Challenger Exploration revealed its first results from its Main Manto rock saw channel within the Hualilan project. The results include the following: 

• 71.0m at 10.8 g/t AuEq2 – 9.2 g/t Au, 22.5 g/t Ag, 3.0% Zn in combined Zone 1 and Zone 2

Commenting on the results, Challenger Explorer Managing Director, Mr Kris Knauer said: 

These near surface results are exceptional and continue to reinforce our belief we have a significant gold system at our flagship Hualilan Gold Project in Argentina. We can see that mineralisation is wider than expected near surface and has A strong correlation with high-grade drill hole results down dip and Historical sampling based on the presence of visual sulphides missed broader near surface zones. This is a further important step in delivering on our strategy to become a globally significant gold producer initially targeting high grade shallow mineralisation.

Company overview 

Challenger Exploration possesses two gold projects, the Hualilan Gold project in Argentina and El Guayabo/Colorado V Project in Ecuador. 

The Hualilan project was previously locked up in a dispute 15 years prior to Challenger’s ownership. The company believes there is a historical resource of 627,000 ounces of gold at 13.7 g/t. Albeit a non-JORC compliance resource. Continued sampling and drilling are expected to extend the project’s existing mineralisation. Additionally, it will support multiple resource upgrades in the near term. 

Challenger Exploration has undertaken extensive exploration over the past 12 months. The intention behind the exploration is to generate targets for drilling and land acquisition at El Guayabo. The project is a step behind the Hualilan project with ongoing channel sampling and assaying. The company is looking to finalise its targets for the upcoming drilling program. 

More reading

• Which ASX 200 shares haven’t recovered from the COVID-19 crash?
• Is the Crown (ASX:CWN) takeover offer good value for shareholders?
• Why the MGC Pharmaceuticals (ASX:MXC) share price is jumping 8%
• Here’s why the Payright (ASX:PYR) share price is soaring 9% today
• Why the Vulcan Energy (ASX:VUL) share price is charging 9% higher

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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There are a few S&P/ASX 200 Index (ASX: XJO) shares that are actually materially lower than they were a year ago at the bottom of the crash.

Some of them have seen their ups and downs, but a year on from the bottom of the COVID-19 crash they are still down quite substantially.

Let’s look at the three that are down the most:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is down around 45% over the past year. Despite initially having a strong performance because of the elevated levels of consumer buying and pantry stocking, things have gone wrong for the infant formula business as demand dropped off.

A2 Milk has explained a number of times that the drop in performance is due to the daigou and cross-border e-commerce (CBEC) channels being significantly impacted due to disruption resulting primarily from COVID-19-related issues. Issues include pantry de-stocking, reduced tourism from China and international student numbers because of travel restrictions. Subdued online pricing also isn’t helping.

The ASX 200 share is trying to re-activate the daigou channel.

FY21 half-year revenue was down 16% and it’s now expecting total revenue to be in the order of NZ$1.4 billion. This assumes a strong recovery in the fourth quarter.

AGL Energy Limited (ASX: AGL)

The AGL share price has dropped by around 36% over the past year.

AGL has been suffering from a “sharp decline” in wholesale prices for electricity and large-scale renewable certificates, lower gross margins in wholesale gas, higher costs associated with the COVID-19 pandemic and increased depreciation expenses after recent investments. There was also a $25 million hit relating to the outage of unit 3 of the Liddell Power Station.

All of the above saw the ASX 200 share report a statutory loss of $2.29 billion, which included $2.69 billion of onerous contract provision and impairment charges.

AGL is expecting to report underlying profit after tax of between $500 million and $580 million in FY21. It’s looking for cost reductions, amounting to around $150 million in FY22. It is also trying to deliver a $100 million reduction in sustaining capital expenditure by FY23.

TPG Telecom Ltd (ASX: TPG)

The TPG share price is down by 23% over the last year.

TPG is working through the merger between Vodafone Hutchison Australia and the old TPG. It is still suffering from the impacts of the NBN which is harming margins. There’s also the impact of COVID-19, especially global travel restrictions, ongoing mobile competition as well as regulatory challenges.

The telco ASX 200 share said that, on a pro forma basis, which calculates figures to simulate what the result would have been if the merger had been effective throughout 2020 and 2019, it showed revenue decreased by 6% to $5.52 billion and EBITDA decreased by 10% to $1.79 billion.

However, the company said that it has confidence in a recovery from COVID as the 5G rollout ramps up in major cities and it’s also testing fixed wireless services.

More reading

• Why the A2 Milk (ASX:A2M) share price is under pressure in 2021
• ASX 200 dips, Sydney Airport falls, AGL rises
• ASX 200 down 0.3%: Afterpay & Zip lower, AGL signs Portland Smelter deal
• Why AGL, Clover, QBE, & Volpara shares are pushing higher today
• Why the AGL (ASX:AGL) share price is avoiding the market selloff

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Crown Resorts Ltd (ASX: CWN) share price was an exceptionally strong performer on Monday.

The casino and resorts operator’s shares rocketed 21% higher to $11.97.

Why did the Crown share price rocket higher?

Investors were scrambling to buy Crown shares on Monday after it confirmed the receipt of a takeover offer from US investment giant Blackstone.

According to the announcement, Crown has received an unsolicited, non-binding, and indicative proposal of $11.85 cash per share from Blackstone. This indicative price will reduce by the value of any dividends or distributions Crown declares or pays.

As things stand, the Crown board is assessing the offer and has advised shareholders not to take any action. It also warned them that there’s no certainty that the proposal will result in a transaction.

What are analysts saying about the Crown takeover offer?

While it has not given its verdict on whether it believes a deal will be reached, Goldman Sachs has made a few comments about the Crown takeover offer.

It commented: “We note there remains heightened regulatory overhang on CWN […] and there are multiple conditions around this offer, including approval still from Blackstone’s investment committees, as well as regulatory conditions approving Blackstone as a ‘suitable person’ to hold CWN’s licenses and other gaming-related approvals. We also note the Victorian government’s inquiry into Crown is expected to commence this week (Wednesday).”

Is the offer good value for shareholders?

Goldman Sachs appears undecided on whether the Crown takeover offer represents good value.

It notes that offer isn’t at a meaningful premium to the average multiples it has traded at previously. However, it also concedes that Crown’s earnings composition has changed in recent years.

It explained: “The proposed A$11.85 per share offer equates to 12.9x EV/EBITDA on our FY22E EBITDA (including ~A$750 mn of debt), or on more normalised earnings of 11.6/11.1x FY19A/FY23E, respectively. For context, CWN’s long run historical 12-mo forward trading average has been ~12x, whilst its 3/5 year averages have been ~11x. However, we note CWN’s change in earnings composition over the years, noting that volatile, lower-multiple VIP revenues, as a percentage of group amounted to close to ~30% back in FY15/16, falling to ~20% by FY19, and we expect this to represent only ~10% of group revenues on our FY22 estimates.”

All eyes will be on the Crown board in the coming days or weeks when it reveals whether it feels it is good value or not.

More reading

• ASX 200 climbs, Crown soars, Mineral Resources drops
• Why AnteoTech, Crown, Dotz Nano, & Galan Lithium are zooming higher
• ASX 200 up 0.35%: Crowns surges, ANZ & CBA settle class actions
• Crown (ASX:CWN) share price shoots up 18% after Blackstone takeover bid
• Crown (ASX:CWN) share price on watch after receiving takeover approach

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Crown Resorts Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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MGC Pharmaceuticals (ASX: MXC) shares are on the rise today after the company advised two ethics committees have passed its product for phase III clinical trials on COVID-19 patients. At the time of writing, the MGC Pharmaceuticals share price has surged 8% to 8.1 cents.

The pharmaceutical company’s CimatrA is designed to target infections with inflammatory complications and has been passed for trials at two separate hospitals.

Let’s look take a closer look at the company’s news.

Phase III clinical trials

The MGC Pharmaceuticals share price is gaining ground today after the company stated its CimetrA™ product has been approved by two ethics committees. The trials will evaluate the drug’s efficacy to treat hospitalised patients diagnosed with moderate COVID-19. It will also provide further data on the use of CimetrA as an investigational medicinal product (IMP).

The trials will take place in Israel, at the Rambam Health Care Campus and Nazareth Hospital EMMS. They are expected to begin next month and be completed by September. Full results are expected to be available in October 2021.

CimetrA has had a name change due to the trial. It was formerly known as ArtemiC™, a name which will live on as a food supplement.

The company states that CimetrA encapsulates technology that delivers active ingredients more effectively in higher concentrations, improving the bioavailability of natural active ingredients.

Commentary from management

Co-founder and managing director of MGC Pharmaceuticals Roby Zomer commented on the ethics committee’s approval of CimatrA’s stage III trial:

This is a very significant milestone for the Company being the first Phase III clinical trial of CimetrA™. ArtemiC™ has already proven to be a very successful product for the Company, and we look forward to replicating this with CimetrA as an IMP and improve outcomes for COVID-19 patients.

MGC Pharmaceuticals share price snapshot

The MGC Pharmaceuticals share price is having a fantastic year. Currently, the company’s shares are up by 350% year to date.

MGC Pharmaceuticals has a market capitalisation of around $170 million, with approximately 2.2 billion shares outstanding.

More reading

• Up 310% the MGC Pharma (ASX:MXC) share price is gaining again today

Motley Fool contributor Brooke Cooper 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 Bruce Jackson.

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The Payright Ltd (ASX: PYR) share price is up this morning after providing an update on its key growth initiatives. At the market open this morning, shares in the buy-now, pay-later (BNPL) provider are trading at 73.5 cents.

What did Payright announce?

The Payright share price is on the move today after revealing three important announcements.

According to this morning’s release, the first update Payright advised was the launch of its Bill Smoothing payment option. Bill Smoothing is a direct-to-customer service. The service allows consumers to spread their household bills across a three-month period up to the value of $1,000. This includes utilities, bills, council rates, vehicle registration, car & home insurance premiums, rental payments, and school fees, among others.

The pilot program recorded strong success. Consequently, the options are being offered to all existing Payright customers. However, the company is planning on rolling out the service to new customers in the near future.

Additionally, Payright stated that the Bill Smoothing payment option adds another dimension to its value-added services. The company is seeking to capture the Australian and New Zealand market through its expanded range of products.

Payright co-founder and joint-CEO Piers Redward commented:

With approximately 8.8 million residential gas and electricity customers in Australia, and a total market for electricity bill payments in excess of $9 billion per year, Payright Bill Smoothing offers customers the ability to manage the rising cost of living through an easy and affordable payment plan for their household bills.

Merchant growth

In addition to the new product offering, Payright highlighted that its merchant portfolio continues to grow. The latest inclusions are leading Australian home improvement retailers, Australian Outdoor Living, Stratco, and Into Blinds as well as New Zealand’s national electrical retailer, Appliance Plus.

Management noted that Payright’s merchant portfolio spans over the retail, home improvement, health & beauty, photography, education, and the automotive industry.

New warehouse facility

In a bid to support future operations, Payright has engaged with Gresham Partners. This partnership has allowed Payright to secure a $100 million wholesale warehouse facility. This follows a recent review of the company’s existing funding program.

Management explained that once a new warehouse funding is set up, the company will accelerate new growth programs.

Payright’s other co-founder & joint-CEO, Myles Redward said:

Following Payright’s successful IPO and the recent extension of our existing loan notes program, we are excited to have secured Gresham’s services to assist with the proposed transition to a bank warehouse facility. The combined funding mix will provide us with an enhanced capability to aggressively accelerate growth through merchant and customer acquisition initiatives such as Bill Smoothing, along with a number of other new products scheduled for deployment in the coming months.

Payright share price snapshot

The Payright share price has lost around 35% over the past 12 months. Most of the falls coming from year-to-date. The company’s shares reached a high of $1.22 in the middle of last month.

Based on the current share price, Payright has a market capitalisation of roughly $40 million, with 59 million shares outstanding.

More reading

• The Payright (ASX: PYR) share price tumbles after maiden results
• What on earth happened with the Payright (ASX:PYR) share price today?

Motley Fool contributor Aaron Teboneras 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 Bruce Jackson.

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In morning trade, the Vulcan Energy Resources Ltd (ASX: VUL) share price is charging higher.

At the time of writing, the clean lithium company’s shares are up 9% to $6.88.

Why is the Vulcan share price pushing higher?

Investors have responded positively to an announcement this morning which revealed that Vulcan intends to establish a full lithium traceability and CO2 measurement across its supply chain.

According to the release, Vulcan will work with Traceability-as-a-Service company Circulor to achieve this, which it believes is a world-first for the lithium sector.

The company notes that Circulor’s customers include major European automotive manufacturers such as Volvo Cars, Daimler, Polestar and Jaguar Land Rover. It feels this indicates OEMs’ growing need to demonstrate responsible sourcing of raw materials like lithium and to track and manage the embedded CO2 emission in their upstream supply chain for EVs, as they work towards achieving their net zero targets.

In light of this, Vulcan will be implementing Ciculor’s solution to its future lithium supply contracts with European OEMs to help them meet their objectives.

Setting the way forward

Vulcan’s CEO, Dr Francis Wedin, believes this move is setting the way forward for the raw materials industry.

He said: “This collaboration between Circulor and Vulcan will allow us to develop the world’s first fully traceable, transparent and zero carbon lithium product extracted and consumed in Europe. As well as showing Vulcan’s commitment to a transparent supply chain with net zero carbon footprint, it is another industry-leading move by Vulcan that sets the way forward for the raw materials industry to improve and align to OEMs’ goal of producing truly sustainable EVs.”

Circulor’s CEO, Douglas Johnson-Poensgen, added: “The EV battery market in Europe is evolving fast with many new players establishing themselves in the market, and with a clear advantage for those who can prove sustainable practices. We are pleased to be supporting Vulcan in meeting Europe’s needs for the electric vehicle transition, from a zero-carbon source, for many years to come. Together, we will set a new benchmark for the responsible sourcing of raw materials to enable sustainable mobility for the future.”

More reading

• Why Corporate Travel Management, Silver Lake, Volpara, & Vulcan are pushing higher
• Why the Vulcan Energy (ASX:VUL) share price is charging higher today
• Why the Vulcan Energy (ASX:VUL) share price is up today
• Mining companies with ESG strategies are at the front of the pack
• Vulcan Energy (ASX: VUL) share price up as revenue soars over 1,000%

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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The Sigma Healthcare Ltd (ASX: SIG) share price is pushing higher on Tuesday following the release of its full year results.

In morning trade, the pharmacy chain operator and distributor’s shares are up almost 7% to 71.5 cents.

How did Sigma perform in FY 2020?

For the 12 months ended 31 January, Sigma reported a 4.8% increase in revenue to $3.4 billion. This was driven by a combination of organic growth from its core wholesale sales and pharmacy brands, along with new business.

In respect to the latter, the company notes that sales to Chemist Warehouse reached their full annualised run rate by June 2020 and remain on track to achieve $800 million in sales over a 12-month period.

Sigma’s earnings grew at a quicker rate on both a reported and underlying basis. This was thanks partly to Project Pivot. This transformation program has now concluded, having delivered on the target of $100+ million in efficiency gains.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 39.2% to $81.1 million. This was slightly ahead of its guidance for the year. And on the bottom line, the company’s underlying net profit after tax jumped 133.6% to $29.1 million.

In light of its return to form, the Sigma board has reinstated its dividend and declared a fully franked 1 cent per share final dividend.

“Milestone result”

Sigma’s CEO and Managing Director, Mark Hooper, was very pleased with the result, particularly given the COVID-19 pandemic.

He commented: “This is a milestone result. We’ve delivered on our promise of transforming our business and improving our earnings as we enter a period of sustainable growth and improved returns for shareholders.”

“Significantly, Sigma has navigated the challenges of the COVID-19 pandemic without any reliance on direct government support such as Job Keeper. We have the building blocks in place to underpin our target of 10% per annum growth in Underlying EBITDA for the next two years and around $100m by FY23,” he added.

Outlook

The company’s Chairman, Ray Gunston, believes shareholders should be confident about Sigma’s future growth prospects.

He said: “We have taken significant strides to transform our business, upgrade our infrastructure, improve our operating performance, and enhance our culture. At the same time, we have reduced net debt to $50m at year end. Collectively, it means we are now in an improved position to execute our strategy and actively pursue opportunities for sustainable growth including in our expansion businesses.”

This sentiment was echoed by its CEO. Mr Cooper concluded: “Following a period of significant change, Sigma is now a stronger business and on track to delivering our targeted 10% annual organic growth over the next two years. Having targeted $100m Underlying EBITDA by FY23, we now approach that milestone with far greater confidence. We also sharpen our focus on business development to accelerate our expansion businesses, including in the medical consumables and devices space.”

More reading

• Respiri (ASX:RSH) share price on watch following FDA approval
• Why the New Hope (ASX:NHC) share price is in focus
• Kathmandu (ASX:KMD) share price on watch as dividends resume
• Is the Telstra (ASX:TLS) share price a buy after its restructure update?
• Why the Oceania (ASX:OCA) share price is frozen

Motley Fool contributor James Mickleboro 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 Bruce Jackson.

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The Respiri Ltd (ASX: RSH) share price is on watch today after the company advised it has received United States Food and Drug Administration (FDA) clearance for its Wheezo app. 

About Respiri  

Respiri is a software-as-a-service (SaaS) company supporting asthma patients to monitor and manage their asthma. The company views that asthma is often under-diagnosed and under-treated, creating a substantial burden to sufferers and their families. 

Respiri has created an eHealth SaaS platform, ‘Wheezo’, that uses a device and app to measure, record and monitor asthma symptoms. The device records breath sounds over 30 seconds to be analysed in the app. The app has features that allow users to log symptoms, triggers, medication and local environment factors, which can then be used to build a personalised asthma profile to be shared with healthcare professionals. 

The company believes the sub-optimally managed asthma market represents a significant opportunity, with over 340 million people affected globally. 

Respiri share price in focus 

The Respiri share price will be on the radar this morning after the company announced it has received clearance from the US FDA for Wheezo, thus permitting the company to market and sell its product in the US as a class II medical device alongside the Wheezo app. 

Respiri CEO and Managing Director Mr Marjan Mikel commented on clearance: 

The regulatory clearance of Wheezo and our App in the United States represents a highly significant and major milestone for the Company as we continue to expand our regulatory footprint for Wheezo and enter substantial new markets. The FDA is one of the most stringent regulatory bodies in the world and this clearance further validates the efficacy and utility of our Wheezo device and algorithm. To our knowledge [this is] the first time the FDA has cleared a device/mobile application for the detection, recording and changes of wheeze rates. This represents a step-change in technology for patients with respiratory wheeze seeking an effective, replicable and rapid device measurement and associated App that monitors this important measurement of lung function.

Respiri plans to launch in the US market in Q3 2022 with an initial focus on the 60% of children with persistent and severe asthma, representing 3.3 million patients. According to the company, the Wheezo device and app will play a role in providing significant analytical information for patients and their caregivers. 

Respiri highlights the reimbursement codes available from the Centers for Medicare and Medicaid Services (CMS) in the US as a key tailwind for Wheezo. These enable clinicians and qualified medical professionals advising patients on the purchase of the device and associated SaaS fees to receive financial compensation for the time spent and equipment used for patient care delivered remotely. 

More reading

• Why the New Hope (ASX:NHC) share price is in focus
• Kathmandu (ASX:KMD) share price on watch as dividends resume
• Is the Telstra (ASX:TLS) share price a buy after its restructure update?
• Why the Oceania (ASX:OCA) share price is frozen
• ASX 200 crash anniversary: 5 of the best performing shares of the last 12 months

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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The New Hope Corporation Ltd (ASX: NHC) share price is one to watch after the coal miner’s half-year results announcement.

Why is the New Hope share price on watch?

Today, New Hope reported its half-year results for the period ended 31 January 2021 (1H 2021). The Aussie miner reported what it called a “solid performance” despite a “depressed energy market”.

Both pricing and volumes fell during the quarter and weighed on revenue and earnings. Total tonnes sold fell 23% from 2020 to 4.9 million while the realised sales price of $78.8 per tonne was down 19% on 2020 figures.

Revenue from operations consequently slumped 34% to $405.5 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) before non-regular items fell 62% to $81.2 million.

The New Hope share price is worth watching given the significant profitability hit during the period. That includes a 99% drop in profit before income tax (before non-regular items) to $0.9 million.

Shareholders will also be watching the interim dividend announcement from today’s results. New Hope slashed its interim dividend by 33% to 4.0 cents per share as a result of reduced profits.

The coronavirus pandemic has crimped demand for energy around the world and hit commodity prices hard. That lack of demand saw New Hope’s EBITDA margin fall 41% from 2020 to 20% in 1H 2021.

Higher NSW and Queensland costs during the second quarter weighed on that EBITDA result. Bengalla coal production fell 16.3% from 2020 to 4.6 megatonnes while Queensland operations produced 0.9 megatonnes, down 43.8% from 2020.

Cash generated from operations slumped 58% to $70.2 million for the period. Profit after tax and non-regular items fell 179% as New Hope posted a $55.4 million net loss. On the balance sheet side, New Hope’s gearing ratio came in at 14% and the company remains in compliance with all debt covenants.

New Hope is forecasting “continued strong performance” at Bengalla with targeted cost reductions across the business. The miner said coal prices are expected to stabilise in the short and long term with good demand from Asian markets.

Foolish takeaway

The New Hope share price is one to watch in early trade after this morning’s half-year report. Revenue and earnings slumped for the year due to a depressed energy market despite Bengalla sales coming in better than expected for the period.

New Hope slashed its interim dividend by 33% to 4.0 cents per share as a result of lower profit and a focus on capital management.

More reading

• 3 reasons why Brickworks is a great ASX dividend share
• No ASX dividend share is perfect, but Soul Patts (ASX:SOL) is more perfect than most

Motley Fool contributor Ken Hall 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 Bruce Jackson.

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