Qantas Airways Limited (ASX: QAN) chief executive Alan Joyce revealed Thursday that there are actually some routes that have more customers now than before the pandemic.

Overall the airline lost $2.7 billion before tax for the 2020 financial year due to Covid-19 lockdowns and travel restrictions.

But Joyce said that there is a massive pent-up desire for Australians to travel, citing the success of its first post-Covid sale before the second wave arrived.

“We had Jetstar having the biggest sale in its history when the borders opened up. I think it was 200 bookings a minute. It was unbelievable the level of interest there was for people to travel interstate.”

Surprisingly, some routes are seeing more customers now than before the coronavirus pandemic.

They are intra-state flights that are not affected by state border closures.

“We have routes like Brisbane to Cairns which is actually [now] the top route in Qantas’ network. The traffic on that is bigger than the traffic we had pre-COVID-19,” he said.

“Perth to Broome is actually ahead of what it was pre-COVID-19. Sydney–Ballina is ahead of what it was pre-COVID-19.”

Pent-up demand for travel could turn Qantas’ fortunes

The fervour for intra-state travel, according to Joyce, shows how there could be a surge of business when state borders eventually loosen up.

“People seeing family and friends, people seeing relatives, people doing businesses and seeing business colleagues. It has given us real strong confidence that when we can get the borders there, we know there is huge demand for these services.”

The aviation chief was frustrated at the lack of national consistency in which state borders open and which ones shut.

“We’re saying ‘Let’s have the rules to say what would you have to see in order for those borders to be open?’ So, we all have clarity and know what’s the right thing to do,” he said.

“Western Australia, South Australia, Northern Territory, Queensland, Tasmania – we’ve got closures there still. With very low cases, no cases, and it’s been like that for a while.”

More reading

• Qantas demands national action to avoid horrible ‘cliff’
• Qantas share price on watch following FY 2020 earnings release
• The highest paid CEOs in the ASX 200
• 5 things to watch on the ASX 200 next week
• Qantas share price is facing this new challenge in FY21

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

It was a historic day for Apple Inc. (NASDAQ: AAPL) yesterday. The iPhone maker became the first U.S. company to achieve a market cap of $2 trillion, making it the world’s most valuable company. Apple hit this milestone just two months after hitting $1.5 trillion and two years after becoming the first publicly traded company in the U.S. to hit $1 trillion.  

The ink is barely dry on this latest watermark, and one analyst is already prognosticating that Apple will hit $3 trillion — and sooner than many think.

Technology analyst Dan Ives with Wedbush has gone out on a limb, predicting that Apple’s market cap will balloon to $3 trillion by 2023. He cited several factors that he believes will elevate the company to the next level.

Ives points to the ongoing transition to 5G — the next generation of mobile technology — and the resulting upgrade “super cycle” as a major catalyst. In a recent note to clients, Ives said, “Apple has a ‘once in a decade’ opportunity over the next 12 to 18 months as we estimate roughly 350 million of Cupertino’s 950 million iPhones worldwide are in the window of an upgrade opportunity.”

He also cites Apple’s services segment, which has been an increasingly important part of the company’s business over the past several years. Over the previous four quarters, services has generated revenue of nearly $52 billion, up 18% year over year, and now represents 19% of Apple’s total revenue. Ives values Apple’s services business at between $700 billion and $750 billion.

Ives has a reputation for being among the most bullish of Apple watchers, repeatedly suggesting that the company’s market cap would cross the $2 trillion threshold by year’s end. Turns out his estimates were right, with Apple reaching the benchmark months ahead of schedule. 

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

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Danny Vena owns shares of Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. 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 market may be dropping lower on Thursday, but that hasn’t stopped the Afterpay Ltd (ASX: APT) share price from charging higher.

In morning trade the payments company’s shares jumped 9.5% to reach a record high of $82.00.

Why is the Afterpay share price rocketing higher?

Investors have been scrambling to buy Afterpay shares today following the release of an after-market update on Wednesday.

That update revealed that the company now expects to report stronger than predicted earnings before interest, tax, depreciation and amortisation (EBITDA) in FY 2020.

On 7 July 2020, Afterpay announced that its Net Transaction Loss (NTL) as a percentage of underlying sales was expected to be up to 55 basis points in FY 2020. However, since then, the company has experienced higher than anticipated collections of instalment payments relating to its 30 June 2020 receivables balance.

Management explained: “The July Trading Update for the FY20 NTL% was based on a relatively short period of collections data relating to the 30 June 2020 receivables balance from 1 July 2020 through to the date of the 7 July 2020 announcement. Since that time, and with the benefit of more collections data reviewed as part of the process of preparing the full year financial statements, a reduced NTL% is now expected.”

What does this mean for its earnings?

As a result of the above, management now expects to report a much-improved NTL of just 0.38% for FY 2020.

This means that its Net Transaction Margin (NTM) as a percentage of underlying sales will be stronger than expected, giving its profitability a major boost.

So much so, Afterpay’s EBITDA is now expected to be approximately $44 million in FY 2020. This is a 76% to 120% increase on its previous EBITDA guidance of $20 million to $25 million.

Another positive is that its provisions for the year will now be much lower. Afterpay’s unaudited provision for expected losses is forecast to be approximately $34 million. This represents 4.16% of its unaudited gross consumer receivables balance of approximately $817 million.

Is it too late to invest?

I continue to believe that Afterpay is a great long term investment. However, its shares are looking pretty expensive, so they carry a lot of risk. In light of this, I would suggest investors keep their position to just a small part of a balanced portfolio.

More reading

• Why Afterpay, Codan, IDP Education, & Sonic shares are charging higher
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. 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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Metcash Limited‘s (ASX: MTS) has been given the nod for its acquisition of a 70% majority stake in Total Tools Holdings Pty Ltd for an estimated $57 million. The Australian Competition & Consumer Commission (ACCC) announced today it would not oppose the Metcash acquisition.

Metcash is a wholesaler and retailer of hardware and home improvement products through its Independent Hardware Group (IHG). Total Tools is a leading participant in Australia’s professional tool segment.

The ACCC decision

The ACCC said Metcash’s acquisition would enhance competition with Bunnings in multi-category hardware stores. Bunnings is owned by Wesfarmers Ltd (ASX: WES).

ACCC chair Rod Sims said:

We saw that generally Mitre 10 focuses on DIY customer and those looking for convenience, while Total Tools mainly attracts trade customers because of their extensive range of trade quality products and specialised staff.

We have seen a lot of activity in the tool industry this year. Bunnings is the clear market leader, and with IHG increasing its footprint, any further consolidation of the tool market at a national, state or local level will be scrutinised closely.

The Metcash acquisition

The acquisition includes franchisor operations and one company-owned store. Over time, it will become a mix of independently owned and joint venture retail stores.

In addition, Metcash will provide Total Tools with a $35 million debt facility to support its growth plans and the future acquisition of an ownership interest in a select number of stores. 

Moving forward, the acquisition will include a pathway for Metcash to acquire the remaining 30% within the next 4 years. 

Metcash CEO Jeff Adams said in July the acquisition of Total Tools enhanced Metcash’s position in the hardware market. It would benefit independent retailers in both Total Tools and the independent Hardware Group, and aligned with Metcash’s purpose of “championing successful independents”, he said.

Mr Adams went on to say:

The acquisition is being funded out of existing cash reserves. The equity raising in April strengthened our balance sheet and provided us with the flexibility to execute on strategic acquisitions such as Total Tools.

In morning trade, the Metcash share price is down 2% and is trading at $2.90.

More reading

• Why it may not be too late to chase ASX reporting season record breakers
• Wesfarmers share price on watch after cautious outlook overshadows strong FY 2020 result
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Motley Fool contributor Matthew Donald owns shares of Wesfarmers Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. 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 South32 Ltd (ASX: S32) share price is edging lower in early trade after reporting a US$65 million loss after tax. 

Why is the South32 share price on the move?

Despite record production across three operations, revenue fell 16% lower to US$6,075 million. Those three operations were Australian Manganese Ore, Hillside Aluminium and Brazil Alumina.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) fell 46% to US$1,185 million with an underlying EBITDA margin down 1,200 basis points to 21.9%.

Underlying profit took a big hit, plummeting 81% to $193 million for the year ended 30 June 2020 (FY20). That saw the Aussie miner report earnings per share of 3.9 cents, down 80% from FY19.

Volatile macroeconomic conditions sparked by the coronavirus pandemic hurt the company’s bottom line alongside US$115 million of impairment and restructuring charges.

Lower average realised prices across alumina, manganese ore, metallurgical coal, aluminium and energy coal also offset higher volumes.

Investors have been quick to sell down with the South32 share price falling more than 1% at the open before recovering slightly to its current price of $2.14.

South32 reported a net cash balance of US$298 million following free cash flow of US$583 million including distributions from its manganese EAI.

South32 reported a US 1.0 cent per share half-year dividend, representing a payout ratio of 77%. That distribution follows a February 2020 special dividend and half-year dividend, each 1.1 cents per share.

FY21 outlook

The South32 share price is under pressure this morning. However, the Aussie miner did manage to provide FY21 guidance across its operations.

That included unchanged guidance for its Worsley Alumina, Brazil Alumina, Hillside Aluminium and Mozal Aluminium operations.

FY21 and FY22 guidance was provided for Australia Manganese. Production is expected to increase from 3,470 kwmt (thousand wet metric tonnes) to 3,500 in both FY21 and FY22.

FY21 guidance was increased by 10% for South32’s Cannington zinc, silver and lead operations.

Foolish takeaway

The South32 share price has been under pressure in 2020 and that is continuing this morning.

Weaker commodity prices offset strong production numbers across many of its key operations in FY20. However, the Aussie miner did pay a full-year dividend despite the current challenges.

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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 Zoono Group Ltd (ASX: ZNO) share price is zooming higher on Thursday after the release of its full year results.

At the time of writing the biotechnology company’s shares are up 7% to $2.68.

How did Zoono perform in FY 2020?

It certainly was an unforgettable year for Zoono and its shareholders in FY 2020.

Due to incredible demand for hand sanitisers and sprays because of the pandemic, Zoono’s sales went through the roof.

For the 12 months ended 30 June 2020, Zoono recorded revenue of NZ$38.3 million. This was up a staggering NZ$36.5 million from just NZ$1.8 million a year earlier.

It was even better for its operating earnings before interest, tax, depreciation and amortisation (EBITDA). After posting an EBITBA loss of NZ$2.4 million in FY 2019, Zoono swung to positive EBITDA of NZ$20.6 million in FY 2020. That’s a whopping 944.5% increase on the prior corresponding period.

And on the bottom line, Zoono reported a net profit after tax of $16.7 million for the 12 months.

In light of this strong result, the company has announced its maiden dividend of NZ$0.032 per share unfranked.

What were the drivers of its result?

Zoono’s Managing Director, Paul Hyslop, believes the result demonstrates increasing acceptance of the benefit of its long-lasting antimicrobial products, particularly during the current pandemic.

He said: “The second half of the year was outstanding. The team has done an amazing job keeping up with the unprecedented worldwide demand for our products.”

“Strong sales came from Australia and New Zealand in both the B2B and B2C markets. UK and Europe continue to deliver and, in Asia and China, we are making good progress. We have also recently bought back the US distributor and will be seeking to mirror the success of the UK operations in this region,” he added.

In addition to this, with distribution agreements being signed across the Middle East, Africa, and Asia, the chief executive believes “Zoono is becoming a true global company in the provision of antimicrobial protection.”

However, management has provided no guidance for the year ahead.

Overall, it will be interesting to see how much of these impressive sales can be replicated in FY 2021 or whether they are largely one-offs. Time will tell.

More reading

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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. 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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Zoom Video Communications (NASDAQ: ZM) is taking advantage of the boom in working from home due to the coronavirus pandemic by announcing its videoconferencing software will soon be available on popular smart displays from Amazon.com, Inc. (NASDAQ: AMZN), Facebook, Inc. (NASDAQ: FB), and Google (NASDAQ: GOOGL).

Zoom on Portal from Facebook should be available next month, while capabilities for Amazon’s Echo Show and Google’s Nest Hub Max will be available by the end of the year.

Zoom launched its Home product last month, and it ties together with its hardware-as-a-service (HaaS) program to let businesses outfit their employees with affordable conferencing and collaboration equipment.

It recently announced its Zoom Phone cloud phone service was now available in 40 countries around the globe.

The video communications specialist cites a Morning Consult study that shows working from home has tripled compared to before the COVID-19 pandemic, and a third of workers would upgrade their home office setup if their employers subsidized the cost.

Nearly half (47%) of employers intend to allow employees to keep working full-time from home going forward, and adding Zoom Video capabilities to products people might already have in their homes would certainly expand its utility.

At the same time, Facebook is also looking to tap into the work-from-home trend, separately announcing that beyond its own Workplace collaboration tool and the addition of Zoom functionality, it has also partnered with BlueJeans, GoToMeeting, and Webex for even more videoconferencing options on Portal.

Facebook says Workplace on Portal also includes Portal TV and it is now adding backgrounds for video calls.

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

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Rich Duprey has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Amazon, Facebook, and Zoom Video Communications and recommends the following options: short January 2022 $1940 calls on Amazon, long January 2022 $1920 calls on Amazon, and short August 2020 $130 calls on Zoom Video Communications. The Motley Fool Australia has recommended Alphabet (A shares), Amazon, and Facebook. 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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Qantas Airways Limited (ASX: QAN) chief executive Alan Joyce has called for national action to steer the country away from a disastrous “cliff”.

While announcing a $2.7 billion loss-before-tax for the 2020 financial year, Joyce expressed his frustration at a lack of national coordination for state border closures due to Covid-19.

“At the moment, there are no rules around how borders are going to close and going to open,” he said.

“Some areas of Queensland, Tasmania, and other parts of the country, 30% of the jobs are dependent on tourism.”

Joyce added he’s not asking for a complete opening of all state borders, but merely clear national rules based on health advice on when they’re closed and when they’re open.

“If it’s safe to do it, it should be opened… We’re saying ‘Let’s have the rules to say what would you have to see in order for those borders to be open?’ So, we all have clarity and know what’s the right thing to do.”

Travel restrictions are political, not based on health

The Qantas chief was especially frustrated at the travel restrictions between virus-suppressed areas.

“We still don’t understand why states with zero cases for a long time have borders closed to states with zero cases. That doesn’t seem to make any medical sense or any advice that we  have seen.”

The Queensland premier Annastacia Palaszczuk this week stated her state’s borders would remain shut to Victorians and New South Wales visitors until at least Christmas.

Joyce slammed such a declaration made this far out from December, considering the fast-changing nature of the epidemic.

“What’s the basis of it? … Even if Victoria gets down to no cases, or New South Wales gets back to no cases, is that still the situation?”

“Surely, these decisions should be based on the facts, the health advice, and the level of cases that we’re seeing around the various states. That’s what we’re calling on… And we think that eventually will cost jobs and businesses, particularly a lot of the small businesses in Queensland, to go out of business.”

Flights to the US won’t happen before a vaccine

Qantas would concentrate on reviving the domestic business before shifting its focus to re-opening international routes.

“Potentially have the bubbles, country by country, when we have a similar level of exposure to the virus – New Zealanders, they are an example – that should potentially open up relatively fast compared to the other countries around the world.”

Traditionally a big money-spinner for the airline is travel between Australia and the US.

But the dire Covid-19 infection rate in the North American nation has Joyce pessimistic about a revival anytime soon.

“The US, with the level of prevalence there is probably going to take some time. It will probably need a vaccine before we could see that happening,” he said.

“We potentially could see a vaccine by the middle or the end of next year and countries like the US may be the first country to have widespread use of that vaccine. So that could mean that the US is seen as a market by the end of 21, hopefully we could, dependent on a vaccine, start seeing flights again.”

More reading

• Qantas share price on watch following FY 2020 earnings release
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• Qantas share price is facing this new challenge in FY21
• Will the Qantas share price fly high again in 2020?

Motley Fool contributor Tony Yoo 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 Star Entertainment Group Ltd (ASX: SGR) share price is on the move this morning, up more than 6% after the casino operator revealed its full year results. Although the company performed strongly between July 2019 and February 2020, the COVID-19 shutdown punched a hole in revenues and profits. 

What does Star Entertainment Group do? 

Star Entertainment Group is behind The Star casinos in the Gold Coast and Sydney, the Treasury Casino and Hotel in Brisbane, and manages the Gold Coast Convention and Exhibition Centre on behalf of the Queensland Government. The company has also entered a $3 billion joint venture to redevelop Queen’s Wharf in Brisbane, which is expected to open in 2022. 

How did Star Entertainment Group perform in FY20? 

Star Entertainment Group reported a 46% decline in profits as a result of the shutdowns of its properties. Both Sydney and Queensland ventures showed strong earnings growth pre-COVID-19, however venues were shuttered in March in response to the spread of the pandemic. This led Star to defer its first half dividend and implement strategies to conserve liquidity, standing down 90% of its employees. 

While properties have largely reopened, they are subject to limits on patron numbers and distancing requirements. The shutdowns resulted in a 23.3% fall in net revenue over the full year and 22.8% decline in earnings before interest, taxes, depreciation and amortisation (EBITDA), which fell to 430 million. Net profit after tax dropped 46% to $176 million and no final dividend was declared.

Chair John O’Neill AO said:

Whilst acknowledging the impacts of COVID-19 have been extraordinarily challenging, the fundamental earnings prospects for The Star remain unchanged, underpinned by valuable long-term licences in sought after destinations. The Star delivered record normalised and domestic earnings for July 2019 to February 2020 on a pcp basis before the full impact of COVID-19. This reflected growth from investments, operational improvements and cost management benefits.

What is the outlook for Star Entertainment Group?

Star Entertainment Group’s properties are now operating under capacity restrictions, and travel restrictions mean many VIP gamblers cannot visit. In July, domestic gaming revenues were around 80% of the prior corresponding period, but VIP volumes were only at 5%. Nonetheless, cash flow was materially positive after investments, enabling the company to reduce debt. A debt covenant was waived in June, and no cash dividend can be paid until Star Entertainment Group reduces its gearing ratio below 2.5 times.

At the time of writing, the Star Entertainment share price is up by 6.36% to $3.01 per share.

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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 Pro Medicus Limited (ASX: PME) share price has come under pressure following its full year results release.

In morning trade the Pro Medicus share price is down almost 5% to $24.10.

How did Pro Medicus perform in FY 2020?

For the 12 months ended 30 June 2020, the leading health imaging company reported a 23.9% increase in revenue from underlying operations to $56.8 million.

Management advised that this was driven by solid growth in key jurisdictions, with North American revenue up 23.7% and Australian revenue rising 19.2%. This offset a 37.7% decline in revenue in Europe, which was largely a result of the one-off sale to the German government in the previous period.

Thanks to a lift in its margins to 52.5%, underlying profit before tax (which excludes a $3 million one-off capital sale to the German government in the previous period) was up 33.4% to $30.24 million.

On the bottom line, Pro Medicus posted a full year reported net profit of $23.1 million. This was up 20.7% on the prior corresponding period.

In light of this strong form and its very strong balance sheet (cash reserves of $43.4 million and no debt), the board declared a fully franked final dividend of 6 cents per share. This lifted its total FY 2020 dividend to 12 cents per share, up 14.3% year on year.

Management commentary.

Pro Medicus’ CEO, Dr. Sam Hupert, was pleased with the company’s performance in FY 2020.

He said: “It reinforces the momentum achieved in recent years. Key drivers of the profit increase were growth in transaction revenue in North America and increased RIS sales in Australia. The three key contract wins in the USA extends our growing footprint in the academic hospital segment as well as regionally-based community hospitals.”

The chief executive also provided investors with an update on how COVID-19 was impacting the business. Pleasingly, while there has been some impact, it has not been substantial.

Dr. Hupert said: “We have kept momentum going operationally, and our client volumes have increased steadily after an initial steep drop in exam numbers at the end of March/beginning of April. By 30th June, average examination volumes were back above 90% of normal business levels across the USA and Australia. Compared to many other businesses, we have held up very well.”

No guidance was given for FY 2021, but the chief executive notes that its pipeline remains strong and has continued to grow even during the pandemic.

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus 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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