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The Qantas Airways Limited (ASX: QAN) share price is down again. The ASX airline share has seen declines since the beginning of COVID-19, and over the past few weeks.

At the time of writing, Qantas shares are down 16% since 8 June 2022.

A lot has happened in the last couple of months, including significant interest rate hikes by the Reserve Bank of Australia (RBA). It has implemented back-to-back 50 basis point (0.5%) rises.

That certainly can affect the valuation of assets. Interest rates can act like gravity on asset prices. The higher the interest rate, the harder it pulls downward on the price. Billionaire Ray Dalio once said about interest rates:

It all comes down to interest rates. As an investor, all you’re doing is putting up a lump sum payment for a future cash flow.

But there’s a lot more to understanding the Qantas share price situation. Management and investors have been waiting for demand to come back after more than two years of disruption from the pandemic.

What’s the latest from Qantas?

Comments from the airline could indicate what medium-term demand and financial growth may look like.

The last update we heard from the ASX airline share was a market update in June 2022.

It said that “travel demand remains strong across all categories”. Indeed, the demand may have been more than Qantas was initially prepared for as it thanked customers for their “patience and understanding while the airline works through what has been a challenging restart for the industry globally”.

But, fuel prices are hampering things. Fuel is one of the biggest expense items for Qantas.

The airline has reduced its domestic capacity for FY23 to assist with the recovery. For July and August, a further 5% of capacity will be removed on top of the 10% announced in May. The 15% total will also apply to September. A reduction of 10% will be applied to schedules from October to the end of March 2023.

This means that Qantas’ planned domestic flying will be brought down 106% of the pre-COVID level for the second quarter and 110% for the third quarter.

Qantas explained that these reductions, combined with “robust” international and domestic travel demand, are expected to help the airline recover the elevated cost of fuel. If this helps profitability, it could help the Qantas share price.

There are no changes to international capacity plans, with flying steadily increasing from around 50% of pre-COVID levels in June to around 70% by the end of the FY23 first quarter (30 September 2022) to meet demand.

Qantas says that capacity growth will continue as additional A380s return to service. International capacity is expected to reach 90% of pre-COVID levels by the fourth quarter of FY23, which is the three months between April 2023 to June 2023.

What will the airline do with the profit it’s making?

The ASX airline share said that it expects net debt reduction. The improved demand is expected to reduce net debt to around $4 billion by the end of FY22.

In the second half of FY22, it’s expecting to report underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $450 million and $550 million.

Is the Qantas share price a buy?

Brokers are somewhat mixed on the business.

UBS and Morgan Stanley both rate the company as a buy, with price targets of $6.55 and $6.60 respectively. This implies a possible rise of more than 40% over the next 12 months. The brokers were pleased with the better net debt expectations.

However, Credit Suisse rates the airline as ‘underperform’, with a price target of just $4.35 because of concerns that higher fuel prices will hit potential profit.

Using Credit Suisse’s profit expectation, the Qantas share price is valued at 22x FY23’s estimated earnings. The Morgan Stanley profit projection puts the Qantas share price at 19x FY23’s estimated earnings.

The post Will the Qantas share price fly higher in FY23? appeared first on The Motley Fool Australia.

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More reading

• ‘Disappointed’: Qantas share price lifts despite Heathrow chaos
• Clipped wings: Why ASX 200 travel shares are having trouble getting off the ground today
• Qantas share price slips amid COVID’s continuing toll  
• Own ASX travel shares? Here’s the outlook for FY23
• Here are the top 10 ASX shares today

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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The Novonix Ltd (ASX: NVX) share price is taking off on Wednesday despite the company’s silence.

The battery technology and materials stock is joined in the green by many of its S&P/ASX 200 Index (ASX: XJO) tech peers.

At the time of writing, the Novonix share price is $2.26, 4.63% higher than its previous close.

For context, the ASX 200 is currently up 1.56%.

So, what’s helping to boost the ASX 200 technology giant’s stock higher today? Let’s take a look.

Novonix share price takes off on Wednesday

It’s a brilliant day for the S&P/ASX 200 Information Technology Index (ASX: XIJ) and the Novonix share price is riding the hype.

The tech sector is leaping 4% at the time of writing, with Novonix’s stock trading in the middle of the pack.

Out in front is the share price of Megaport Ltd (ASX: MP1) following the release of the company’s latest quarterly update. It’s currently up 19%. Megaport’s revenue for the June quarter was 10% higher than that of the prior comparable period, coming in at $30.6 million.

The tech sector’s strong performance also comes on the back of an equally good session on the tech-heavy NASDAQ index overnight.

The NASDAQ Composite lifted 3.11% on Tuesday, marking its best session in close to four weeks.

Sadly, the Novonix share price has a long way to go before it can break even. The stock is currently trading 75% lower than it was at the start of 2022. It has also slipped 13% since this time last year.

The post Why is the Novonix share price launching 5% higher today? appeared first on The Motley Fool Australia.

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More reading

• The only certainty in uncertain times: expert
• ‘Unusually cheap’: ASX experts call out massive buying opportunity
• 5 things to watch on the ASX 200 on Wednesday
• Down 76% this YTD, can the Novonix share price claw back gains?
• Is the NAB share price in danger from a resurgent ANZ?

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 positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 BrainChip Holdings Ltd (ASX: BRN) share price is having a strong day on Wednesday.

In morning trade, the semiconductor company’s shares are up 9% to $1.08.

Why is the BrainChip share price charging higher?

The BrainChip share price is racing higher today despite there being no news out of the company.

However, it is worth noting that the tech sector is booming on Wednesday following a very strong night of trade on Wall Street’s NASDAQ index.

The tech-focused index stormed 3.1% higher overnight on the belief that markets have now found a bottom following stronger-than expected corporate earnings.

Today’s gains have been particularly strong among loss-making tech shares like BrainChip which have been hammered in recent months.

For example, the Life360 Inc (ASX: 360) share price is currently up 7%, the PointsBet Holdings Ltd (ASX: PBH) share price has jumped 8%, and the Zip Co Ltd (ASX: ZIP) share price has surged 9% higher.

This has ultimately led to the S&P/ASX All Technology Index rising by a sizeable 4.4% on Wednesday morning.

Time will tell if the market has reached a bottom or if this is another dead cat bounce.

The post Why is the BrainChip share price storming 9% higher? appeared first on The Motley Fool Australia.

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More reading

• Why did the BrainChip Holdings share price leap 14% on Monday?
• Here’s a look at the 5 best ASX All Ords tech shares in FY22
• How Brainchip shares gained 63% in a year when tech stocks nosedived
• Why did the BrainChip share price crash 30% in June?
• Why is the BrainChip share price sliding 4% today?

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc., Pointsbet Holdings Ltd, and ZIPCOLTD FPO. The Motley Fool Australia has recommended Pointsbet Holdings 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 Iluka Resources Ltd (ASX: ILU) share price is charging higher in morning trade, up almost 6%.

Shares of the mineral sands explorer and producer closed yesterday at $8.62 and are currently trading for $8.945 each, or 3.77% higher. That’s after the share price hit a high of $9.12 in early morning trade, a jump of 5.8%

This comes as ASX investors digest the miner’s latest figures from its quarterly update for the three months ending 30 June.

What was reported for the June quarter?

The Iluka share price is surging after the company reported a 5% year-on-year increase in its zircon, rutile, and synthetic rutile production. Total production for the quarter reached 189,000 tonnes.

The first half sales of zircon, rutile, and synthetic rutile reached 421,000 tonnes. This exceeded production levels and decreased Iluka’s inventory of the minerals by 53,000 tonnes.

The Iluka share price also could be getting a lift after the miner revealed it had achieved a weighted average zircon price of US$1,910 per tonne, up 25% from the second half of 2021.

The company also said the “weighted average prices for zircon sand increased by approximately US$140 per tonne, effective 1 July, and all of Iluka’s Q3 2022 zircon sales are fully contracted”.

The miner reported mineral sands revenue of $540.9 million, up from $391.1 million in Q2 2021. And total revenue for zircon, rutile, and synthetic rutile sales during the quarter came in at $2.1 billion, compared to $1.5 billion in the corresponding quarter.

Along with increasing revenues, costs were also up. Iluka spent $2.4 million on exploration and evaluation activities during the quarter, compared with $2.1 million in Q2 2021.

The company increased its full-year guidance on cash costs of production by $55 million to $715 million. It attributed 65% of the increase to higher fuel costs.

As at 30 June, Iluka had $600 million in net cash.

Keep an eye out for the miner’s 2022 half-year results on 24 August 2022.

Iluka share price snapshot

The Iluka share price is up 5% over the past 12 months. By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 7% over the full year.

The post Iluka share price leaps 6% on increased mineral sands production appeared first on The Motley Fool Australia.

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More reading

• Why are these ASX 200 mining shares behind the eight ball today?
• Goldman Sachs says Iluka shares are a strong buy with 40% upside
• 5 things to watch on the ASX 200 on Thursday
• Mineral Monday: What you need to know about rare earths and which ASX shares are cashing in on them
• Here’s why analysts rate these ASX 200 mining shares as buys

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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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.

What happened

Much ado has been made of the recent news that the upcoming Ethereum (CRYPTO: ETH) merge will take place on or around Sept. 19. This catalyst has continued to propel the value of Ethereum higher, with the world’s second-largest cryptocurrency appreciating 3.4% over the past 24 hours as of 11:30 a.m. ET.

However, the token many Ethereum enthusiasts are really focusing on right now is Ethereum Classic (CRYPTO: ETC). The “original” fork of the Ethereum blockchain is up 10.9% over this same 24-hour period and has absolutely skyrocketed over the past week. The seven-day return for this token stands at 77%, which far exceeds Ethereum’s (still not shabby) 41% weekly return. 

So what

Ethereum Classic was formed initially out of a dispute among crypto miners in years past. Essentially, various major upgrades require the approval of all validators on a network. If a number of nodes dissent with the direction an upgrade will take a given project, and fail to upgrade their software accordingly, a fork can take place in which the blockchain is split in two different directions.

Most investors may not necessarily pay attention to Ethereum Classic, due to the reality that most of the action in the Ethereum ecosystem happens on the Ethereum blockchain. However, crypto miners have quietly continued their mining activity with ETC, creating an oasis for Ethereum miners who wish to continue mining in a post-merge world.

The Ethereum merge will usher in a new age of proof-of-stake validation. What this means is that the energy-intensive proof-of-work calculations that are currently needed to secure the Ethereum blockchain and validate blocks will become obsolete. While great for the environment, this isn’t necessarily great for Ethereum miners, who have in many cases invested heavily in the equipment to mine it.

Now what

Given the similarities between Ethereum and Ethereum Classic, miners looking to switch off of Ethereum and support ETC can do so with minimal upgrades. Additionally, should the Ethereum blockchain experience issues with its Beacon Chain merge, investors can always go back to “old faithful,” making Ethereum Classic a quasi safe haven of sorts for those with concerns.

Thus, it appears all this anticipation around the upcoming Ethereum merge could indirectly benefit proof-of-work variant Ethereum Classic to a greater degree, at least in the near term. With more momentum comes more speculation, so this run should be a fun one to watch for investors looking at short-term trading ideas. 

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

The post Ethereum surges, but Ethereum classic up much more on merge anticipation appeared first on The Motley Fool Australia.

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More reading

• Iluka share price leaps 6% on increased mineral sands production
• Pendal share price slides amid ‘potential transaction’
• Beach share price falls despite solid FY22 revenue growth
• Megaport share price explodes 38% on June quarter profit
• Allkem share price falls despite record quarter

Chris MacDonald has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia owns and has recommended Ethereum. 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 Pendal Group Ltd (ASX: PDL) share price is heading south today.

This follows the company’s announcement late yesterday regarding a ‘potential transaction’.

At the time of writing, the fund manager’s shares are swapping hands at $4.36, down 1.53%.

Let’s take a look at what was released to the market.

Pendal in high-level discussions about possible acquisition

In its statement, Pendal advised that it is in talks with Perpetual Limited (ASX: PPT) about a possible acquisition. 

It noted that the meetings are highly confidential and preliminary, and do not guarantee that a transaction will take place.

The Pendal board will keep shareholders informed in accordance with its continuous disclosure obligations.

Earlier in April, Perpetual made a $2.4 billion non-binding offer to take over Pendal.

The $6.23 per share offer, which represented a 35.4% premium at the time, was deemed not in the best interests of Pendal shareholders.

Eventually, the deal fell through.

As reported by The Australian, if the arrangement is on the same terms, then this would value Pendal shares at $5.58 apiece.

Last week, Pendal provided an update on its funds under management (FUM) for the quarter ending 30 June 2022.

The performance wasn’t rosy and led its shares to hit a 52-week low of $3.69 on the day.

Pendal CEO Nick Good touched on the disappointing performance, saying:

During the quarter there have been sustained market challenges. Global equity market volatility increased dramatically with rising inflation worries, ongoing concerns over geopolitical tensions, and fears of economic recession around the world due to aggressive tightening measures by major central banks.

As a result of current market conditions, we remain prudent and flexible in managing costs, focusing on building and strengthening our strategic growth areas…

Pendal share price snapshot

In the past 12 months, Pendal shares have continued to be sold off by investors to fall 44%.

When looking at year to date, its shares have lagged the S&P/ASX 200 Financials Index (ASX: XFJ) – down 20% vs. 8.5%, respectively.

Pendal has a price-to-earnings (P/E) ratio of 7.92 and commands a market capitalisation of roughly $1.69 billion.

The post Pendal share price slides amid ‘potential transaction’ appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• Why are Pendal shares in a trading halt?
• Why JB Hi-Fi, Mesoblast, Pendal, and Woodside shares are pushing higher
• Here are the top 10 ASX shares today
• Why BHP, Jumbo, Pendal, and Rio Tinto shares are sinking today

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 Beach Energy Ltd (ASX: BPT) share price is dropping on Wednesday following the release of the company’s quarterly update.

In morning trade, the energy company’s shares are down 2% to $1.74.

Beach share price lower on Q4 update

For the three months ended 30 June, Beach delivered a 9% increase in production to 5.6 MMboe. Management advised that this was driven by higher customer gas demand from the offshore Otway Basin.

This underpinned a 10% increase in quarterly revenue to $504 million. This comprises oil revenues of $195 million and gas and gas liquids revenue of $309 million.

Full year guidance achieved

For the full year, the company achieved its guidance with production of 21.8 MMBoe.

This led to total revenue coming in at $1,749 million, which represents a 15% increase year on year and was largely in line with consensus estimates for the year.

Another positive is that its unit field operation costs are expected to come in at the low end of its guidance range of $11.50 to $12.50 per boe. So, with the company commanding an average realised price of $78.2 per boe for all its products, it looks set to report strong free cash flow and earnings next month.

In fact, at the end of the quarter, the company had a net cash position of $165 million, which was up from $7 million three months earlier.

Management commentary

Beach Energy’s chief executive officer, Morné Engelbrecht, was pleased with the final quarter and full year. He commented:

A key plank of the Beach strategy is to continue investing in new gas supply to support the east coast market. Our results this quarter against the backdrop of the current energy crisis validate this strategy. This quarter Beach supplied an additional 3.5 PJ (0.6 MMboe) of gas from the Otway Gas Plant to Australian domestic retailers, thanks in part to recent commissioning of two Geographe development wells.

Engelbrecht appears confident on the company’s prospects for the year ahead. He said:

We enter FY23 with strong momentum as we complete our major development projects and deliver more new gas to the domestic market. In the Otway Basin, we will connect four offshore Thylacine development wells and the Enterprise discovery to the Otway Gas Plant to bring production rates back to full capacity. In the Perth Basin, Waitsia Stage 2 is developing material gas volumes for both domestic and global LNG markets.

Beach remains focused on delivering our major Otway and Perth Basin development projects. We are also planning for our next phase of growth, including exploration in the Perth, Otway, and Cooper basins, and we do so with a Balance Sheet capable of supporting our growth aspirations.

The post Beach share price falls despite solid FY22 revenue growth appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• What’s the outlook for Beach Energy shares in FY23?
• 5 things to watch on the ASX 200 on Friday
• These were the 5 top performing ASX energy shares of FY22

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Megaport Ltd (ASX: MP1) share price is soaring today after the company delivered EBITDA profit for the first time.

The technology company’s share price is currently swapping hands at $8.00, a 23.65% gain. That’s after hitting a high of $8.96 in early trade, up 38% on yesterday’s close. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is 1.26% higher at the time of writing.

Let’s take a look at what Megaport reported today.

Megaport delivers profit

Highlights of the Megaport’s unaudited financial results presented in the quarterly report include:

• Monthly Recurring Revenue (MRR) grew 13% on the previous quarter to $10.7 million
• Underlying MRR jumped 10% to $10.7 million
• Total revenue jumped 10% on the previous quarter to $30.6 million
• Annualised recurring revenue of $128 million
• Normalised EBITDA of $1 million, up 126% on the previous quarter
• Profit after direct costs and partner commissions of $19.9 million, up 14% on the third quarter
• Cash position of $82.5 million

What else did the company report?

Megaport delivered EBITDA profit in the fourth quarter, a first for the company. This compared to a loss of $3.8 million on the third quarter of FY22. Canada and Japan becoming profitable earlier than scheduled contributed to this result.

Underpinning the strong monthly recurring revenue growth was strong port sales and a 7% boost in the average revenue per port to $1,120 per month. Net new port sales jumped by 6% to 9,545.

Customers also increased 4% during the quarter to 2,643. Megaport sold 1,447 new services during the quarter, up 6% on the prior quarter.

Multi-cloud connections on the Megaport platform also increased, with 9% more Megaport Cloud Routers (MCR) sold in the June quarter. In total, 14% of the company’s customers have now taken up the MCR offering.

During the quarter, Megaport also launched in Mexico, a market the company describes as the “second largest IT spending market in Latin America”.

Megaport enabled 16 new data centres during the quarter, and four of these were in Mexico.

Overall, monthly recurring revenue leapt 15% in North America, 12% in the Asia Pacific, and 9% in Europe in the fourth quarter of FY22.

Management comment

Commenting on the results, chief executive officer Vincent English said:

During the fourth quarter of fiscal year 2022 Megaport drove steady underlying revenue growth. Uptake of core products, as well as monthly recurring revenue growth, were strong in the quarter.

This is driven by customers continuing to increase the number of service providers they securely connect through our platform as they undertake global digital transformation initiatives.

The underlying Megaport network and business model has strong operating leverage to further increase profit and generate cash as revenue grows.

What’s ahead?

Megaport has a “high degree of confidence” in FY23 and highlighted its solid cash position of more than $80 million.

The company has aligned the business to reduce “cash burn”, enabling it to achieve profit. English added:

Closing fiscal year 2022 with a solid fourth quarter performance across all operating metrics provides excellent momentum going into fiscal year 2023.

Megaport share price snapshot

The Megaport share price has lost 47% in the past year, while it has fallen 55% in the year to date.

However, in the past month, Megaport shares have rocketed more than 62%.

For perspective, the benchmark ASX 200 index has lost more than 7% in the past year.

The post Megaport share price explodes 38% on June quarter profit appeared first on The Motley Fool Australia.

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More reading

• What’s in store for the Megaport share price this earnings season?
• 2 ASX shares we just bought that everyone’s underestimating: fund
• ASX 200 midday update: ANZ to buy Suncorp Bank for $5bn, Whitehaven Coal’s update
• Brokers name 3 ASX shares to buy today
• Broker names 2 ASX tech shares to buy in July

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 positions in and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 Allkem Ltd (ASX: AKE) share price is falling on Wednesday following the release of the company’s quarterly update.

In early trade, the lithium miner’s shares are down 1% to $9.72.

Allkem share price falls despite record quarter

The Allkem share price is falling today despite the company revealing that it had a strong finish to the financial year.

During the three months ended 30 June, Allkem delivered record quarterly group revenue of approximately US$337 million and a group gross operating cash margin of approximately US$292 million.

This means that group revenue for FY 2022 (including Mt Cattlin from the merger date of 25 August 2021) was US$762 million and its group gross operating cash margin was approximately US$594 million (excluding corporate and other non-operating costs).

Allkem finished the year with a hefty cash balance of US$663.2 million, which is an increase of US$213.1 million since the end of March.

What were the drivers of its record result?

The key Mt Cattlin and Olaroz operations finished the year strongly.

In respect to the former, the Mt Cattlin operation achieved production of 24,845 dry metric tonnes (dmt) and shipments of 37,837 dmt despite COVID-19 cases impacting the mine site over the quarter.

This led to the company delivering record quarterly Mt Cattlin revenue of US$188.9 million with a gross cash margin of 84% based on average pricing of US$4,992 per dmt.

In light of this strong quarter, Mt Cattlin reported record full-year production of 193,563 dmt.

It was a similar story over in Argentina at the company’s Olaroz Lithium Facility. During the quarter, Allkem reported production and sales of lithium carbonate of 3,445 tonnes and 3,440 tonnes, respectively.

This led to the Olaroz Lithium Facility generating record quarterly revenue of ~US$141 million with a gross cash margin of 90% based on average pricing of US$41,033 per tonne.

Once again, this meant record full year production at Olaroz Lithium Facility of 12,863 tonnes of lithium carbonate. Approximately 47% of this was battery grade material, which was in line with targets.

Outlook

It could be the company’s outlook that is underwhelming investors and weighing on the Allkem share price today.

Allkem revealed that it is targeting Mt Cattlin spodumene production of approximately 160ktpa to 170ktpa. This will be down from 193.5ktpa in FY 2022.

Management also warned that costs will be higher in FY 2023. This is due to ongoing developments, lower production volumes, and labour shortages in Western Australia.

However, with customer demand in the spodumene market remaining robust, the company is expecting spodumene concentrate pricing in the September quarter to be higher than the June quarter.

No real guidance was given for Olaroz other than management expecting the lithium carbonate sales price for the September quarter to remain similar to the June quarter.

The post Allkem share price falls despite record quarter appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Is Allkem a top ASX dividend share hiding in plain sight?
• What’s the outlook for Allkem shares in FY23?
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• Why are these ASX 200 lithium shares tumbling today?

Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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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ASX investors don’t need to be told twice that the market is going through turmoil in 2022.

The S&P/ASX 200 Index (ASX: XJO) has sunk more than 12% year-to-date, but many portfolios are in the red far worse than that because the mining and energy sectors have been dragging the index up.

The capitulation is best seen in the initial public offer pipeline. 

According to the HLB Mann Judd IPO Watch Australia mid-year report released this week, there are currently only 15 companies preparing to list on the ASX for a total of $121 million.

That compares to 43 at the end of June last year, seeking to raise $1.25 billion.

This shows it’s not just investors that are frightened. Businesses seeking investment have also gone into their shells.

So far this year, IPOs have raised just $790 million — a minuscule amount against the $2.9 billion harvested in the first half of 2021.

HLB Mann Judd partner and report author Marcus Ohm acknowledged that turbulent market conditions have depressed the IPO market.

“We expect that macroeconomic and capital market conditions will continue to impact the IPO market in the second half of 2022.”

The one shining light, much like the ASX 200, has been the resources sector.

It has dominated IPOs this year, with 44 out of 59 listings representing mining companies.

Even in chaos, these companies have a bright future

So it is no wonder that Ohm reckons the only current reliable thematic is lithium.

“On lithium, there’s just a massive gap between demand and supply at the moment,” he said.

“A few years ago, there was more supply on tap — so that was suppressing growth in the lithium price. But that’s gone now and the sources just can’t meet the demand.”

According to Ohm, just the global transition to electric vehicles (EVs) would see any surge in lithium supply be immediately used up by rising demand.

“Just the EV usage is predicted to go up by 50% over the next two years,” he said.

“All those battery manufacturers and Tesla Inc (NASDAQ: TSLA) have got to pay those prices to lock in the supply. If you don’t have the supply, you have no business, effectively.”

He said this is why it’s important to invest in ASX lithium shares that seek new sources, not just the existing producers.

“If you don’t have a healthy exploration industry, you don’t have a future,” he said.

“I think, lithium, you can confidently predict that’s going to do well.”

Historically, plenty of resources IPOs are for explorers just starting out their journey.

And despite the depressed equities market, those listed this year have done pretty well out of the blocks.

“In terms of share price performance across the materials sector, companies generally outperformed the broader market, recording on average a first-day gain of 19%.”

The post The only certainty in uncertain times: expert appeared first on The Motley Fool Australia.

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More reading

• ‘Unusually cheap’: ASX experts call out massive buying opportunity
• 5 things to watch on the ASX 200 on Wednesday
• Is the NAB share price in danger from a resurgent ANZ?
• Here are the top 10 ASX shares today
• ‘CBA and Westpac are too big’: One fund manager’s take on the future of ASX 200 bank shares

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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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