The Orocobre Limited (ASX: ORE) share price closed yesterday’s trade flat, despite the lithium miner revealing the impact of COVID-19 on its operations in the quarter ended June 2020.

COVID-19 restrictions meant the miner’s Olaroz lithium facility was closed for several weeks from late March. Upon reopening, operating rates were lower, partly due to the company’s bio-security protocol. Production for the quarter of 2,511 tonnes was down 27% on the prior corresponding period. 

Despite COVID-19 disruptions, Orocobre managed to achieve its lowest cash cost of sales for 3 years at US$3,920 a tonne in the quarter. But sales volumes were impacted by COVID-19, falling 36% quarter-on-quarter to 1,601 tonnes. Sales revenue fell even further, down 48% from the previous quarter to US$6.3 million.

Orocobre reported a realised average price of US$3,913 a tonne for the quarter.

Projects pushed back 

Orocobre’s expansion of the Olaroz facility was also significantly impacted by COVID-19, with construction ceasing for approximately a month. Site works continue to be limited and construction has only progressed slightly since March to approximately 40% of completion.

Construction of the Naraha Lithium Hydroxide Plant continued throughout the period, however deliveries are expected to be delayed due to COVID-19. Orocobre reports that this will likely push back completion by approximately 2 months. 

Market outlook

Orocobre reported that in China, demand for electric vehicles (the majority of which run on lithium batteries) has been largely subdued despite the extension of the country’s subsidy program. Weak global demand and a build up of product inventory saw aggressive sales prices by some producers that were seeking to maintain cash flow, minimise unit costs, or grow market share. Higher-cost Chinese conversion plants began to idle facilities or moderate production. 

The miner also noted that widespread delays in lithium expansion projects from a number of producers were announced during the quarter. This reflected a combination of market conditions, limitations on workforce availability, and lower plant and equipment availability. 

Electric vehicle (EV) manufacturers were buoyed by signals the European Union would use “green” industries as the platform for economic recovery, post-COVID. Two of the largest automobile markets in Europe, Germany and France, have increased EV subsidies by 50% and 17%, respectively. This brings some EV sale prices in line with internal combustion engine equivalents. Sales in both markets grew 100% year-on-year in May reflecting the impact of these subsidies on consumer appetite. 

Foolish takeaway

While the lithium market suffered a setback due to COVID-19, Orocobre says the long-term outlook remains positive and continues to be reinforced by increased government regulation and funding.

The Orocobre share price is currently sitting at $3.08 per share, which is 9.6% up, year to date, and a 9.22% gain on this time last year.

More reading

• HUB24 and 2 more ASX 200 shares to watch this week
• These are the 10 most shorted shares on the ASX
• These were the ASX 200’s biggest share gainers last week
• ASX 200 Weekly Wrap: ASX has week of high volatility
• These were the best performing ASX 200 shares last week

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 August reporting season has already begun with some companies starting to report this week and next. However, the majority of companies will start to report in week 3, beginning on 10 August.

So in reality, you have a week to decide which ASX shares to buy to position yourself for the greatest impact.  

Some ASX shares are obvious. Companies like Kogan.com Ltd (ASX: KGN) and Temple & Webster Group Ltd (ASX: TPW) have already given very positive market updates. It is also pretty clear that iron ore and gold companies are likely to report strong FY20 results. 

Nonetheless, I believe there are a few ASX shares which the market has oversold that could see a more significant share price rise. Here are the top 2 ASX shares I think will outperform during the reporting season.

Australian real estate investment trusts 

I am expecting a couple of Australian real estate investment trusts (A-REITs) to do well during reporting season, but my favourite share in this space right now is Centuria Office REIT (ASX: COF).

On the ASX today, Centuria Office is the largest listed pure-play office A-REIT. I believe the long average lease life of office A-REITs has provided resilience during the coronavirus lockdowns. In the case of Centuria Office, its lease term is 5.1 years.

Furthermore, it is trading at a market capitalisation that is just under half of its net tangible asset value. Therefore, theoretically, if you purchased the entire company, you could sell its assets for an immediate profit. In addition, the company has a trailing 12-month dividend yield of 9.3%.

Lastly, the company recently went ex-dividend. Income investors regularly purchase companies to capture the dividend, and then sell it off after the ASX share goes ex-dividend. So right now, the share price is lower than it normally is. 

Online ASX shares

An ASX share I think is going to do well during earnings season is Jumbo Interactive Ltd (ASX: JIN), which is an online lottery business. I think the current noise around the buy now, pay later sector is overshadowing this growth share.

Jumbo has 3 potential paths to generate revenue. First, via charities. Charities do not need a license to sell lottery tickets. Second, via LotteryWest, the West Australian lottery commission. These negotiations are continuing. Third, under license from Tabcorp Holdings Limited (ASX: TAH). Jumbo and Tabcorp recently completed a negotiation that took their agreement from 2023 through to 2030, albeit with increased fees.

While this is a good share on many fronts, I think it will do well in reporting season for the following reason: In normal time, the company sells 26.7% of all lottery sales online, while newsagents and kiosks sell the remainder. As such, in my opinion there is a high likelihood of increases in revenue for Jumbo due to the coronavirus lockdown.

Foolish takeaway

On closer inspection, Centuria Office and Jumbo have characteristics that I believe have enabled them to sail under the radar during the coronavirus pandemic. I expect both of them to surprise on the upside in a reporting season that will likely be marked with a lot of missed targets. 

More reading

• Why these ASX mid cap shares could smash the market over the next 5 years
• Is now the time to buy the Jumbo Interactive share price?
• 2 hidden ASX shares to benefit from coronavirus
• Why UBS thinks now is the time to be buying this underperforming ASX 200 stock
• 4 trends to invest in before August earnings season

Daryl Mather owns shares of Centuria Office REIT. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Kogan.com ltd and Temple & Webster Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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On Thursday the S&P/ASX 200 Index (ASX: XJO) was back on form and stormed higher.

A good number of shares were on the rise yesterday, with a handful even managing to hit record highs.

Three ASX 200 shares that have just reached this milestone are listed below. Here’s why they are flying high:

Coles Group Ltd (ASX: COL)

The Coles share price was on form again on Thursday and climbed to a record high of $18.54. Investors have been buying the supermarket giant’s shares in anticipation of the release of a strong full year result in August. Coles has experienced a strong increase in sales this year because of the pandemic. This appears to have positioned it to deliver a solid lift in its earnings and dividends. And given the recent outbreak in Victoria, FY 2021 could be equally as strong.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price continued its positive run and hit a record high of $17.59 yesterday. The iron ore producer’s shares stormed higher after the release of its fourth quarter update. During the quarter, Fortescue shipped 47.3 mt of iron ore. This took its FY 2020 total shipments to 178.2mt, which was ahead of its guidance. This was achieved at a low C1 cost of US$12.94 per wet metric tonne, despite increased expenses relating to the COVID-19 pandemic. This compares to its average realised selling price of US$81 a dry metric tonne. In FY 2021, Fortescue is aiming to ship 175mt to 180mt with C1 costs of US$13.00 to US$13.50 per wet metric tonne.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price hit a record high of $46.30 on Thursday. Investors have been buying the retailer’s shares after its sales surged during the pandemic. This appears to have positioned JB Hi-Fi to deliver a very strong full year result next month. Goldman Sachs, for example, expects the company’s earnings before interest and tax to come in 34.8% higher in FY 2020. Though, it is worth noting, that after its strong share price gain, the broker rates JB Hi-Fi’s shares as neutral on valuation grounds.

More reading

• Coles and Wesfarmers share prices reach for new highs. Should you invest?
• 3 top ASX shares to buy for growth investors in August
• ASX 200 rises 0.75%, Fortescue impresses and Macquarie remains robust
• JB Hi-Fi share price hits record high: Is it good value ahead of earnings season?
• ASX 200 jumps 0.7%: Fortescue impresses, Macquarie’s tough Q1, big four banks rise

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Cimic Group Ltd (ASX: CIM) share price is one to watch this morning after the group announced it is scrapping its interim dividend amid a drop in net profit after tax (NPAT).

What were the financial highlights?

Cimic reported that its half-year revenue fell $0.8 billion from 1H19 to $6.2 billion for the half-year ended 30 June 2020 (1H20).

The company’s $317 million NPAT result was achieved with a 5.1% NPAT margin. Cimic’s $534.6 million operating profit was achieved on a margin of 8.6%.

Unsurprisingly, the coronavirus pandemic weighed on the company’s result. That included delaying the award of new projects and a slowdown of domestic and offshore revenues.

Operating cash flow pre-factoring in the last 12 months was $1.3 billion, up $495 million year-on-year.

The Cimic share price will be worth watching as investors weigh up the underlying versus statutory result. 

Cimic reported strong liquidity with gross cash of $4.0 billion and just $264 million of debt repayments due in the next 12 months.

Net debt totalled $1.3 billion with work in hand of $38.1 billion as at 30 June 2020.

COVID-19 update

Cimic’s executive chair Macerlino Fernández Verdes said the outlook across Cimic’s core businesses “remains positive”. 

The announcement also highlighted that a strong mining market and government stimulus for the construction and services market is good news for the year ahead.

CEO Juan Santamaria said the company’s focus remains on “project delivery, cost efficiency measures, risk and working capital”.

However, Cimic will not pay an interim dividend to shareholders following the half-year result.

What about the company’s pipeline?

Cimic’s infrastructure business Ventia also completed its acquisition of Broadspectrum on 30 June 2020. The acquisition is expected to generate annual revenue in excess of $5 billion and helped boost Cimic’s work in hand by $3.1 billion.

Cimic also reported ~$70 billion of relevant tenders are expected to be bid and/or awarded for the remainder of the year.

There are also around $130 billion public-private partnership (PPP) opportunities identified for the remainder of 2020 and beyond.

The Cimic share price is down 40% since this time last year, and will be one to watch as investors evaluate the present results against future prospects.

More reading

• Why AP Eagers, CIMIC, NAB, & Virgin Money shares are charging higher
• Cimic share price dips despite $2.5 billion contract win

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Unibail-Rodamco-Westfield (ASX: URW) share price sunk 5.26% to $3.78 yesterday after the shopping centre operator released its half-year results.

Unibail reported that the COVID-19 pandemic has significantly impacted its business. Authorities in many of the markets the company operates imposed restrictions on the opening of shopping centres. Many tenants were unable to trade, and not all retailers continued or restarted operations. 

Unibail-Rodamco-Westfield’s operations 

Unibail operates shopping centres, convention centres, and office buildings in the United States (US) and Europe. With 86% of Unibail’s portfolio in retail assets, a large proportion of tenants were unable to trade during COVID-19 lockdowns. On average, Unibail’s shopping centres were closed for 67 days. The majority of centres have reopened but the ongoing economic downturn is likely to impact  tenants. 

The implementation of health and safety measures has been a key element of reopening, with additional cleaning, supplies, and communications required. Unibail reports footfall trends have been encouraging since reopenings and generally better than expected. June footfall for centres open throughout the month was 73.8% of June 2019. But the closures had a devastating impact on tenant sales, which fell 39.4% in Europe over the year to June 2020. June 2020 sales remained 19.7% lower than June 2019 in continental Europe. 

Financial impact 

The closure of centres meant Unibail has struggled to collect rent, although some governments have provided tenant support packages. Only 41% of rent and service charges were collected in Q2 2020, down from 96% in Q1 2020. Of Q2 2020 rent, 34% was deferred or discounted and 25% is overdue and to be recovered. Many tenant negotiations are ongoing, which may have affected the collection rate. Unibail is hoping to see this improve once negotiations are concluded. 

Unibail has identified 201.1 million euros in impacts from COVID-19, including rent reductions, increases in doubtful debtors, lower variable revenues and an increase in financial expenses due to liquidity measures taken during the crisis. This has caused a 1.45 euro reduction in earnings per share. Overall adjusted recurring earnings per share fell from 6.45 euros in 1H 2019 to 4.65 euros in 1H 2020.  

About the Unibail share price 

The Unibail share price is down 66.5% from its January high, and is actually trading lower than its March low. Like other shopping centre operators, it is struggling with lack of patronage in a post-COVID world. Encouragingly, sales have been impacted less than footfall, and categories such as home and technology have been performing well. 

More reading

• These shares were the ASX 200’s biggest losers last week
• Is the Vanguard Property ETF a good long-term investment?

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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I think diversification is important when investing in ASX shares.

You don’t want too many of your eggs in one basket in the current COVID-19 situation that the world is in.

It’s hard to predict what’s going to happen over the next 12 months. Vaccine success could send the share market higher. Shares could also fall if a healthcare solution isn’t produced, if COVID-19 infections spread or if the economic impacts are worse than expected.

With the above uncertainty, I think it’s a good idea to make sure your portfolio is diversified with good shares. There’s not much point diversifying just for the sake of it if your returns are hampered.

Here are three ASX share ideas to quickly add diversification:

BetaShares Global Quality Leaders ETF (ASX: QLTY)

This is an exchange-traded fund (ETF) which is offered by BetaShares, one of the biggest ETF providers in Australia.

There are some global ETFs that offer exposure to many hundreds or even thousands of businesses. This ETF offers diversification with investments in 150 global businesses ranked as high-quality companies.

They need to rank well with a high return on equity (ROE) and profitability, low leverage and earnings stability.

The largest positions only have a weighting of around 2%, so it’s not too exposed to any particular business. I think most Aussie investors need to get more exposure to global shares, not ASX shares. The ETF’s biggest positions are: Adobe, Accenture, Apple, Nvidia, Cisco Systems, Intuit, L’Oreal, Vertex Pharmaceuticals, UnitedHealth and Nike.

Quality tends to shine through difficult periods and over the long-term. Since inception in November 2018, the ETF has delivered an average return per annum of 19.76% per annum after fees.

The current annual cost is 0.35% per annum, which is pretty cheap.

Future Generation Global Invstmnt Co Ltd (ASX: FGG)

I really like to buy shares for cheaper than they’re worth. Future Generation Global is a listed investment company (LIC). As the name suggests, it’s not invested in ASX shares – it invests in global shares.

But it doesn’t directly invest in shares, it’s invested in the funds of fund managers who invest in international shares. But those fund managers work for free so that Future Generation Global can donate 1% of its net assets per annum to youth mental health charities.

Some of the fund managers it has investments with include Magellan Financial Group Ltd (ASX: MFG), Cooper, Marsico, Caledonia and Munro Partners.

Looking at the gross investment portfolio performance of the LIC, it has outperformed the MSCI AC World Index (AUD) over the past six months, 12 months, three years and since inception in September 2015.

Aside from the outperformance and diversification, another reason to like the LIC is that’s trading at an attractive discount to its net tangible assets (NTA). At the end of June 2020 it had pre-tax NTA per share of almost $1.47. The current Future Generation Global share price is trading at a 17% discount to the June 2020 NTA.

Infratil Ltd (ASX: IFT)

Infratil is a New Zealand based business that is invested in a variety of sectors across Australia and New Zealand.

The ASX share owns 66% of Wellington Airport. Infratil owns almost half of a data centre business, it owns half of Vodafone New Zealand, it’s involved in various renewable energy projects, it owns a diverse commercial real estate portfolio, it owns half of RetireAustralia – which is the largest privately-held pure-play retirement operator in Australia – and it’s involved with Australian Social Infrastructure Partners.

Each of the above investments are long-term ideas which could produce solid total returns for Infratil.

I think Infratil is a good bet for the long-term growth of the economies in New Zealand and Australia.

At the current Infratil share price it offers a dividend yield of 3.4%.

More reading

• How to create a yearly income of $65,000 in dividends
• 4 ASX shares to buy and hold forever

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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