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Shares in OceanaGold Corp (ASX: OGC) are up almost 8% in afternoon trade on Friday and are now trading at $3.43 apiece.

The OceanaGold share price has spent the entire day in the green after opening sharply higher alongside the company’s release of its quarterly update for the three months ending 31 March 2022.

The OceanaGold share price has climbed another 15% during the past month, continuing a three-month trend where shares thrust off a low of $2.07 in January.

OceanaGold bumps gold production

Key highlights for the quarter include:

• OceanaGold produced 134,035 ounces of gold, a 26% increase quarter-on-quarter
• Consolidated all-in sustaining costs (AISC) for the quarter of $1,084 per ounce on gold sales of 129,191ounces
• Record quarterly revenue of $286 million and record quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) of $158 million
• Net profit after tax (NPAT) of $79 million
• Earnings per share (EPS) of 11 cents after full dilution
• Generated $63 million in free cash flow for the period
• Net debt, inclusive of equipment leases, reduced by 29% quarter on quarter to $168 million
• Leverage ratio of 0.40x and period-end gearing of 9%.

What else happened last quarter for OceanaGold?

The company saw a 26% increase in gold production compared to the previous quarter. The gain also signifies a 61% increase when compared to Q1 FY21.

OceanaGold reported “record quarterly production” at the Haile Gold Mine in South Carolina and a “solid quarter of production” at Didipio Mine in the Philippines. This was partially offset by decreased production at the company’s Waihi operation in the North Island of New Zealand.

Specifically, Waihi produced 6,752 ounces of gold, a 56% year on year gain, but a simultaneous 43% drop compared to last quarter.

In addition, the company’s reported AISC was 18% lower than the last quarter and 14% lower when compared to Q1 FY21.

Sales of $285 million carried down to EBITDA of $158 million, representing 37% and 78% quarter on quarter gains respectively.

However, EBITDA was 155% higher year on year “related to resumption of operations at Didipio and increased gold prices”.

Management commentary

Speaking on the results, OceanaGold CEO Gerard Bond said:

OceanaGold has started the year strongly with the first quarter safely delivering record quarterly revenue and EBITDA and significant free cash flow.

This quarter’s performance was underpinned by record quarterly gold production at our Haile operation in the United States and a very strong first quarter of full production at our Didipio operations in the Philippines.

At Haile, we are continuing to see the benefits of operational and productivity improvements that began in mid2021. At Didipio, the operation achieved full underground mining rates at the end of the first quarter, ahead of schedule by nearly one quarter.

What’s next?

The company was able to restate its full-year consolidated guidance of 445,000–495,000 ounces of gold and 11,000–13,000 tonnes of copper. It hopes to realise these sales at an AISC of $1,275–$1,375 and cash costs between $675–$775 per ounce sold.

Adding further comments, CEO Bond said the company remained “focused on safely and responsibly delivering on our production guidance for 2022, maximising free cash flow generation and progressing the attractive growth options in our portfolio”.

OceanaGold share price snapshot

The OceanaGold share price has climbed 52% over the past 12 months and is up more than 47% for the year to date.

The post OceanaGold share price lifts 8% on gold production boost appeared first on The Motley Fool Australia.

More reading

• Top broker tips Mineral Resources share price to rise 25%
• 3 ASX 200 energy shares storming to new 52-week highs today
• Why Kogan, Reliance, ResMed, and Sandfire shares are dropping
• The Domino’s share price just hit a 52-week low. Is it time to tuck into some?
• Why did the Westpac share price go backwards in April?

Motley Fool contributor Zach Bristow 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 Mineral Resources Limited (ASX: MIN) share price was a strong performer in April.

The mining and mining services company’s shares stormed 15% higher during the month.

Can the Mineral Resources share price keep rising?

The good news for investors is that one leading broker believes the Mineral Resources share price can keep climbing from here.

According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted their price target to $73.80.

Based on the current Mineral Resources share price of $58.54, this implies potential upside of 26% over the next 12 months.

Why is the broker so bullish?

There are a few reasons for Goldman’s bullish view on the Mineral Resources share price. This includes its compelling volume and earnings growth outlook and favourable iron ore and lithium prices. It explained:

“Compelling volume and earnings growth: We forecast a more than doubling of group EBITDA to over A$2bn in FY23 driven by higher lithium and low grade iron ore prices, and a 5% increase to mining services volumes to ~300Mt. Over the next 5yrs we expect MIN’s mining services volumes to increase ~50% to over 400Mtpa, lithium volumes to triple, and iron ore equity volumes to nearly double.

“Lithium spodumene price have settled at around US$4,500/t for the June Q. We are positive iron ore near term also – we forecast Fe to average US$145/t in 2Q22 (but see upside risk to this forecast on near term SD outlook) with seasonal weakness in Aus & Brazil supply from wet weather and an expected recovery in Chinese steel production. At spot lithium & iron ore our FY23 EBITDA would increase to >A$3bn.”

All in all, this could make Mineral Resources shares worth considering if you’re looking for exposure to the resources sector.

The post Top broker tips Mineral Resources share price to rise 25% appeared first on The Motley Fool Australia.

More reading

• Here’s why the Mineral Resources share price is leaping 5%
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• Why Chalice Mining, EML Payments, Mineral Resources, and South32 shares are tumbling
• Why is the Mineral Resources share price sinking 9% today?

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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After taking a beating on Tuesday, the first day of this shortened week’s trading, S&P/ASX 200 Index (ASX: XJO) energy shares are storming back.

In afternoon trading, the S&P/ASX 200 Energy Index (ASX: XEJ) is up 1% compared to a 0.8% gain posted by the ASX 200.

Energy prices have pulled back some from multi-year records in recent days on fears that China’s COVID-zero policies could see lockdowns expanded and crimp the nation’s voracious energy demand.

But with pre-existing energy supply shortages exasperated by Russia’s invasion of Ukraine, coal, crude oil, and gas remain at levels offering frothy profit margins to the top ASX 200 energy shares.

Below are 3 leading companies hitting fresh 52-week highs today to finish off the week and month.

EV charging plans spur investor interest

The first ASX 200 energy share breaking into new 52-week highs is Ampol Ltd (ASX: ALD).

Shares in the fuel station and convenience store operator are up 1.1% at the time of writing to $33.86. You have to go back to just before the pandemic-fuelled market rout in February 2020 to find the Ampol share price worth more.

Ampol shares received a boost earlier this month when the New Zealand Commerce Commission greenlighted its divestment of Gull for some NZ$509 million of cash to Allegro Funds Pty Ltd.

Today Ampol shares look to have gotten an additional boost following a media release reporting that it’s ramping up electric vehicle charging ambitions via its EV charging brand, AmpCharge.

Coal demand drives this ASX 200 energy share to another 52-week high

Moving on, ASX 200 energy share Whitehaven Coal Ltd (ASX: WHC) is also ratcheting up a new 52-week high… barely!

With shares retracing in late afternoon, the Whitehaven Coal share price stands at $4.98 per share at the time of writing, up a slender margin from yesterday’s close of $4.96.

Whitehaven Coal has benefited from record prices for coal, spurred by global conflict and supply shortages as demand has soared.

In the company’s quarterly report, released on 20 April, it reported receiving an average coal price of $315 per tonne, up from $101 per tonne in the first quarter of 2021.

Which brings us to…

The third ASX 200 energy share notching 52-week highs

The third company hitting fresh 1-year highs today is Viva Energy Group Ltd (ASX: VEA).

Viva energy shares are up 0.2% in late afternoon trade, having also retraced from earlier gains.

Still, at $2.80 per share, the Aussie energy retailer is trading at levels not seen since December 2019.

Last week the ASX 200 energy share provided a strong quarterly operational update, indicating its total sales volumes in 1Q22 increased 9% over the same period last year.

The post 3 ASX 200 energy shares storming to new 52-week highs today appeared first on The Motley Fool Australia.

More reading

• Ampol share price lifts amid electrifying new EV charging plans
• Why did ASX coal shares having such a stellar run on Thursday?
• 3 ASX 200 shares smashing new 52-week highs today
• Here are the top 10 ASX shares today
• How might the election outcome impact the outlook for ASX energy shares?

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 S&P/ASX 200 Index (ASX: XJO) is on form again and on course to end the week on a positive note. In afternoon trade, the benchmark index is up 0.95% to 7,426.8 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Kogan.com Ltd (ASX: KGN)

The Kogan share price has crashed 13% to a new multi-year low of $3.95. This morning the ecommerce company released its third quarter update and revealed that its sales fell 3.8% to $262.1 million. In addition, further margin weakness led to the embattled retailer reporting an operating loss of $0.8 million for period. Kogan also conceded that it has once again got it wrong with its inventory management.

Reliance Worldwide Corporation Ltd (ASX: RWC)

The Reliance share price is down 1.5% to $3.95. This follows the release of a trading update out of the plumbing parts company this morning. For the nine months ended 31 March, Reliance reported a 14% increase in sales to $845 million. This was overshadowed by margin pressures caused by higher input costs, which led to its EBITDA falling 8% year on year to $182.6 million.

ResMed Inc (ASX: RMD)

The ResMed share price is down 5% to $28.88. Investors have been selling this sleep treatment company’s shares after its quarterly update fell short of expectations. ResMed posted a 12% increase in revenue to US$864.5 million and a 2% lift in earnings per share to US$1.32. Goldman Sachs points out that this missed consensus estimates by 5% and 9%, respectively.

Sandfire Resources Ltd (ASX: SFR)

The Sandfire share price is down 3% to $5.65. This appears to have been driven by profit taking after a very strong gain on Thursday following its quarterly update. Though, analysts at Morgans think it is worth holding onto Sandfire’s shares. This morning the broker put an add rating and $7.50 price target on its shares.

The post Why Kogan, Reliance, ResMed, and Sandfire shares are dropping appeared first on The Motley Fool Australia.

More reading

• Reliance Worldwide share price slips despite sales growth
• ASX 200 midday update: ResMed disappoints, PointsBet rockets higher
• Here’s why the ResMed share price is sinking 6% today
• Kogan share price crashes 12% to multi-year low amid Q3 sales decline
• ASX 200 mining shares just had their best trading day in 5 weeks. What’s next?

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 positions in and has recommended Kogan.com ltd and Reliance Worldwide Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended Kogan.com ltd. The Motley Fool Australia has recommended Reliance Worldwide Corporation Limited and ResMed Inc. 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 Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is down another 5% today. It just hit a 52-week low. Could it be time to grab a slice of the pizza business at this price?

Over the last six months, the Domino’s share price has declined by over 40%. What’s going on for investors to be lukewarm on the company?

Well, overnight the Domino’s Pizza, Inc. (NYSE: DPZ) share price fell 5% after handing in its quarterly update.

FY22 half-year growth didn’t impress

A couple of months ago, the business reported its result for the first six months of FY22.

Brokers like Credit Suisse have been reducing their price targets on the company because HY22 profit wasn’t as good as expected, with concerns about the Asian division and questions about how many of its stores will be profitable.

Domino’s reported that network sales rose by 11.1% to $2.05 billion, while online sales rose 11.5% to $1.6 billion. However, earnings before interest and tax (EBIT) dropped 5.7% to $144.7 million and underlying net profit after tax (NPAT), after minority interests, dropped 5.3% to $91.3 million.

Let’s look at what Domino’s said about the Asian operations.

In the period, it added its 10^th market – Taiwan, which came with 156 stores with the acquisition. Domino’s also added 87 more organic stores. The ASX share reported that sales grew by 16.4% despite the lifting of the state of emergency in Japan. However, EBIT dropped 17.3% “reflecting rebasing of Japan sales and accelerated corporate store openings compressing margins.”

The Asian division achieved same-store sales growth of 3.5%. Domino’s said that the Taiwan market performed above expectations, with sales growth and new store openings accelerating compared to before the acquisition.

The company is expecting long-term growth

The outlook can have an effect on the Domino’s share price.

Domino’s said that in the first few weeks of the second half of FY22, its network sales were 6% higher, with 1.7% same store sales growth. FY22 same store sales growth is expected to be “slightly below” its three to five year outlook.

The company is going to tackle short-term inflation pressure by serving larger meal offerings that “are a win for customers and franchisees.”

It opened its 3000^th store in the first half of FY22. The 4000^th store is planned for the 2023 calendar year and the 5000^th store is planned for either 2026 or 2027.

Over the next three to five years, the company is aiming to achieve same store sales growth of between 3% to 6%. The company says it is continuing to invest in its future, with net annual capital expenditure at between $100 million to $150 million as it helps franchisees with store expansion and investing in future digital technology and initiatives.

Domino’s thinks its new platforms will lead to higher conversion rates.

Domino’s share price targets

Credit Suisse is neutral on the business, with a price target of $87.80. That implies a possible rise of more than 15% over the next year.

Citi is much more positive on the business. It has a price target of $108.30, which implies a potential rise of over 40% over the next year.

Morgan Stanley just rated Domino’s as a buy, with a price target of $100 – that suggests a rise of over 100%. It notes the long-term international growth potential of the business.

The post The Domino’s share price just hit a 52-week low. Is it time to tuck into some? appeared first on The Motley Fool Australia.

More reading

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Domino’s Pizza. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price outperformed its ‘big four’ banking peers over the first three months of 2022. However, April brought a far different performance from the bank.

Westpac’s stock has slipped 1.8% since the end of last month. For context, the S&P/ASX 200 Index (ASX: XJO) has dipped 1.2% over the same period.

At the time of writing, the Westpac share price is trading at $23.84, 1.06% higher than its previous close. The ASX 200 is also up 0.63% today.

So, what’s been going on with Westpac this month? Let’s take a look.

Westpac share price slumps amid $114.5m in fines

The Westpac share price has struggled over the last month.

Its underwhelming performance came as the bank was hit with millions of dollars of fines after the Federal Court sided with the Australian Securities and Investments Commission (ASIC) on several matters.

The first fine handed down was the smallest, at $1.5 million. The penalty came after the court found Westpac mis-sold consumer credit insurance with its credit cards and flexi loans to customers who didn’t agree to purchase the policies.  

Westpac was hit with a further six fines – worth a total of $113 million – over the remainder of April. They related to charges brought against the bank in November 2021.

The Federal Court noted it had found “widespread compliance failures across multiple [Westpac] businesses“.

The bank was fined $40 million for charging advice fees to deceased customers.

Its subsidiary, BT Funds Management, was hit with a $20 million fine after it was found to have charged superannuation members banned commission payments.

Another $20 million fine was ordered after Westpac was found to have allowed around 21,000 deregistered company accounts to stay open, with fees continually charged to said accounts.

A $15 million penalty was dropped on it for distributing duplicate insurance policies, making customers pay for multiple, unnecessary policies.  

It will pay another $12 million for overcharging interest on credit card debt and loans and a final $6 million fine for charging fees for financial advice without proper disclosure.

Despite last month’s poor performance, the Westpac share price is having a good year so far on the ASX.

Shares in the bank are currently trading 11.6% higher than at the start of 2022. However, they have fallen 5.3% since this time last year.

The post Why did the Westpac share price go backwards in April? appeared first on The Motley Fool Australia.

More reading

• Top broker downgrades ANZ and Westpac shares
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• Own Westpac shares? Here’s why the bank has just copped a further $100m in fines
• Analysts name 3 ASX 200 shares to buy now

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a high. At the time of writing, the benchmark index is up 0.8% to 7,414.6 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Nitro Software Ltd (ASX: NTO)

The Nitro share price has jumped 21% to $1.38. Investors have been buying this document productivity software company’s shares amid a rebound in the tech sector and the release of its quarterly update. The latter revealed that Nitro had a record quarter and is on course to deliver on its annual recurring revenue guidance in FY 2022.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price is up 10% to $2.97. This follows the release of the sports betting company’s quarterly update. PointsBet reported a 54% increase in turnover to $1,398 million. This was driven by a 37% increase in Australian turnover to $579.4 million and a 70% jump in US turnover to $818.6 million.

Sezzle Inc (ASX: SZL)

The Sezzle share price is up 8.5% to 88.5 cents. This morning the buy now pay later provider released its quarterly update and revealed active customer growth of 31.6% to 3.5 million. This supported a 20.1% year-on-year increase in underlying merchant sales, which hit US$450.5 million during the first quarter.

Siteminder Ltd (ASX: SDR)

The Siteminder share price has jumped 9% to $4.72. Investors have been buying this hotel booking technology company’s shares after it reported a big improvement in its performance during the third quarter. SiteMinder recorded its strongest ever March quarter, with third quarter revenues of $29 million. This was up 16.1% year on year in constant currency.

The post Why Nitro, PointsBet, Sezzle, and Siteminder shares are racing higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: ResMed disappoints, PointsBet rockets higher
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• Nitro share price storms 23% higher on record quarter
• PointsBet share price shoots 13% higher on strong Q3 growth
• 2 quality ASX 300 tech shares trading at multi-year lows

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 positions in and has recommended Pointsbet Holdings Ltd and SiteMinder Limited. The Motley Fool Australia has recommended Nitro Software Limited and 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 Flight Centre Travel Group Ltd (ASX: FLT) share price is taking off on Friday, outperforming the S&P/ASX 200 Index (ASX: XJO) by more than 2%.

Its gains come despite no news from the company. However, there’s been plenty of happenings that might have got the market excited about the travel agent’s stock.

At the time of writing, the Flight Centre share price is $22.61, 2.96% higher than its previous close.

For context, the ASX 200 is currently boasting a 0.7% gain.

Let’s take a look at what might be going on with Flight Centre’s stock today.

Flight Centre share price outperforms on Friday

Stock in Flight Centre is pushing ahead of the ASX 200 on Friday. Its movement follows a strong performance from international travel stocks overnight.

While most Aussies snored, stock in Airbnb Inc (NASDAQ: ABNB), Trip Advisor Inc (NASDAQ: TRIP), and Booking Holdings Inc (NASDAQ: BKNG) gained alongside the broader Nasdaq Index.

That, and other similar movements, likely bolstered excitement in domestic travel stocks like Flight Centre.

On top of that, Australians have returned to travel in droves over the last few months, potentially bolstering sentiment for the travel agent’s shares.

Flight Centre is on the hunt for more than 500 new staff members as demand for its services takes off, the Australian Financial Review reported yesterday afternoon.

Additionally, Melbourne airport saw its highest levels of monthly domestic traffic since the onset of the pandemic in March.

More than 1.5 million passengers jetted from the Victorian capital to land at other Aussie airports last month.

The airport also recorded a total of 1.72 million travellers last month – just 7,642 thousand fewer than it did in March 2020.

Today’s gains have helped push the Flight Centre share price even higher into the year to date green.

Right now, the ASX 200 travel stock is trading for 21% more than it was at the start of 2022. It has also gained 32% since this time last year.

The post Why is the Flight Centre share price trouncing ahead of the ASX 200 today? appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 travel shares having a first-class end to the week?
• How long will the Flight Centre share price keep getting battered by COVID-19?
• These are the 10 most shorted ASX shares
• How do you value the Flight Centre share price in April 2022?
• The Flight Centre share price just surged to a 6-month high. Here’s why

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 Airbnb, Inc., Booking Holdings, and TripAdvisor. The Motley Fool Australia has recommended Booking Holdings, Flight Centre Travel Group Limited, and TripAdvisor. 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 S&P/ASX 200 Index (ASX: XJO) is heading higher once more today in what will be a pleasant way to end the week. At the time of writing, the ASX 200 is up by a robust 0.84% at just over 7,400 points.

But let’s dive a little deeper into these market moves and take a glance at the ASX 200 shares currently at the top of the share market’s volume charts, according to investing.com.

The 3 most-traded ASX 200 shares by volume this Friday

AVZ Minerals Ltd (ASX: AVZ)

AVZ Minerals is our first ASX 200 share to check out today. This lithium stock has had a notable 17.22 million shares trade on the markets so far. It’s unclear what is causing this high volume. The company did release a quarterly report yesterday, which was poorly received by investors at the time. The AVZ share price has been volatile today as well and is now down another 0.5% at 99 cents a share. It could be a combination of these events that is resulting in AVZ’s presence on this list today.

Pilbara Minerals Ltd (ASX: PLS)

Another ASX 200 lithium stock is next up today in Pilbara Minerals. Pilbara has had a sizeable 18.34 million of its shares change hands as it currently stands. We have a somewhat similar situation here. Pilbara also dropped a quarterly report yesterday. But investors appear to have liked what they see with this one. Pilbara shares are also up a pleasing 5.6% so far today at $2.84 a share. This is almost certainly why we are seeing this elevated trading volume.

Paladin Energy Ltd (ASX: PDN)

Our final and most traded ASX 200 share today is uranium share Paladin Energy. This Friday has seen a hefty 19.98 million shares bought and sold on the markets so far. Like with Pilbara, the Paladin share price is on fire, having risen by 5.84% so far today at 82 cents a share. Investors were selling the company yesterday after Paladin flagged ongoing issues at one of its mines. But all of that seems forgotten today, despite no additional updates out of the company. This jump higher is the likely reason we are seeing Paladin shares at the top of this list. 

The post Here are the 3 most heavily traded ASX 200 shares on Friday appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 travel shares having a first-class end to the week?
• ASX 200 midday update: ResMed disappoints, PointsBet rockets higher
• Is rising inflation reducing how much Aussies are investing in ASX shares?
• Despite dropping 17% in April, is the Pilbara Minerals share price still overvalued?
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Sebastian Bowen 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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Shares in Reliance Worldwide Corporation Ltd (ASX: RWC) are having a mixed trading day on Friday after the company released its trading update for the nine months ending 31 March 2022.

The Reliance Worldwide share price spiked hard from the open and touched $4.14. After spending a morning in the green, however, shares in the company have since plunged into negative territory and are now down 1.6%, trading at $3.95 apiece.

Reliance Worldwide is an ASX industrial share that designs and manufactures branded plumbing products across major global operations. Let’s take a look at its results.

Reliance Worldwide sees sales growth

Key takeouts for the nine months include:

• Net sales $845 million, a 14% gain over the same period in FY21
• Sales growth in the Americas and Asia Pacific (APAC) region, whilst Europe, Middle East, Africa (EMEA) was lower
• Reported EBITDA of $182.6 million, an 8% backstep from the prior corresponding period (pcp)
• Net debt of $555 million, up 278% from the pcp, from unsecured note issuance in the United States private placement market
• Supply chain constraints have continued to inhibit growth in remodelling activity in the United Kingdom.

What else happened during this period?

Sales for the nine months were 14% stronger than the same time last year. Of the $845 million recognised, around $70 million came from the acquisition of EZ-FLO, acquired by the company back in November.

Geographically, growth was seen most in the Americas and APAC regions, underlined by a “winter freeze” event in Texas.

“Sales in the third quarter of the pcp included an estimated $31 million resulting from a winter freeze event in Texas and surrounding US states,” the company said.

“Adjusting for this, and excluding EZ-FLO, group sales were 9% higher than pcp,” it added.

Aside from that, the company saw some headwinds to operating margins, the result of “the impact of higher prices…[that] were dilutive to overall margins”.

Management commentary

Speaking on the results, Reliance Worldwide CEO Heath Sharp said:

Repair and remodelling activity levels have remained strong. In the Americas, Asia Pacific and Continental Europe, we have been able to grow revenues from the significantly higher base recorded
in FY21. The UK has seen demand revert to longer term trend after a period of heightened activity last year following the COVID lockdowns in that market.

We have been able to achieve further price increases to offset materials and other cost inflation, with prices on average up 8.7% for the nine months. Given the lag between cost rises and price increases, however, EBITDA margins were adversely impacted in the third quarter.

Further price increases introduced in the third quarter and planned for the fourth quarter will deliver near double-digit price increases for the full year.

What’s next for Reliance Worldwide?

Regarding its outlook for upcoming periods, the company didn’t provide specific sales or earnings guidance.

“RWC expects to achieve further price increases in the fourth quarter to offset cost inflation, with average price increases across the group expected to be close to 10% for the year as a whole,” Reliance said.

As a result, it expects operating margins to improve from these latest results. However, as per the company, rising interest rates, supply chain constraints and inflationary pressures remain headwinds for the company.

RWC believes it is well placed with its local manufacturing operations and strong track record of class-leading customer execution to navigate these challenges and respond to customer needs. We also expect our ongoing new product introductions will enable us to continue our long-standing record of delivering above-market growth with quality margins.

Reliance Worldwide share price

The Reliance Worldwide share price has slipped 20% into the red in the last 12 months and has fallen almost 37% this year to date.

The post Reliance Worldwide share price slips despite sales growth appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow 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 Reliance Worldwide Corporation Limited. The Motley Fool Australia has recommended Reliance Worldwide Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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