Tag: Motley Fool

There’s plenty of uncertainty in the market in 2022, but S&P/ASX 200 Index (ASX: XJO) dividend shares could be a saving grace.

The coming years will likely see above trend economic growth and higher inflation, according to Epoch Global Equity Shareholder Yield portfolio manager, John Tobin.

And while plenty of investors might turn to growth stocks to buoy their portfolios in the near future, the expert is betting on dividend shares.

Here’s why the fundie thinks established dividend-paying stocks are worth looking at right now.

Why is this fundie bullish on dividend shares?

According to Tobin, investing in established, dividend-paying shares has been “out of favour” in recent years.

However, long duration stocks – those delivering strong yields such as dividends, free cash flow, and buybacks – might be about to have a moment of “salvation”. Tobin commented:

The view that we have at Epoch is that interest rates are at an inflexion point and from here they are likely to go up. The reasons for that are pretty straightforward – we see above trend economic growth around the world.

Tobin points out that stocks with high dividend yields have previously been found to outperform the market during periods when rates are rising.

“For many that’s a surprising and counter intuitive,” Tobin said. “We tend to think the dividend stocks are probably going to get hurt by rising rates.

“The evidence suggests the opposite.”

Tobin also noted that, between 1994 and 2019, the biggest annual return on the MSCI World Index was seen in stocks with growing dividends.

However, that’s flipped in recent years and the largest returns have come from non-dividend paying shares.

“What this is telling us is, longer duration equities (growth stocks) were out performers in a period of artificially low interest rates,” Tobin said.

“Our argument is long duration stocks are going to face stronger headwinds when rates rise.”

Which ASX 200 dividend shares could benefit from rate rises?

According to Tobin, shares with growing dividends could benefit most from rising interest rates.

Such shares include the ASX 200’s National Australia Bank Ltd. (ASX: NAB).

As The Motley Fool Australia recently reported, the big bank is expected to grow its dividends this financial year.

Bell Potter believes it will hand out dividends worth 132.5 cents per share in financial year 2022. That is predicted to grow to 134.5 cents in financial year 2023.

Renown ASX 200 dividend stock Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) could fit Tobin’s brief.

According to my Foolish colleague Tristan Harrison, Soul Patts has grown its dividends every year since 2000. Additionally, it hasn’t missed an annual dividend since it listed in 1903.

The post This expert says now is the time to buy ASX dividend shares. Here’s why appeared first on The Motley Fool Australia.

More reading

• ANZ (ASX:ANZ) shares drop amid $1bn raising: Time to buy?
• Is the ANZ (ASX:ANZ) share price in the buy zone following its Q1 update?
• 2 ASX shares to rise with higher interest rates
• Rising tide? Here’s why ASX 200 bank shares are having such a good run today
• This global financial giant is buying up Bitcoin. Could ASX banks be next?

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. owns and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/hVRXC4n

At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is back on form and pushing higher. The benchmark index is currently up 0.5% to 7,241.1 points.

Here’s what is happening on the ASX 200 today:

CSL share price charges higher on half year results

The CSL Limited (ASX: CSL) share price is charging higher following the release of its half year results. The biotherapeutics giant reported a 5.3% increase in revenue to US$6,041 million but a 5% constant currency decline in net profit after tax to US$1,722 million. The latter was driven by plasma collection headwinds, which weighed on margins. However, an upgrade to its guidance for FY 2022 has got investors excited.

Fortescue falls on half year results

The Fortescue Metals Group Limited (ASX: FMG) share price is trading lower today despite delivering a half year result in line with the market’s expectations. The iron ore giant posted a 13% decline in revenue to US$8.1 billion and a 32% decline in underlying net profit after tax to US$2.8 billion. A fully franked interim dividend of 86 Australian cents per share was declared.

Treasury Wine shares jump

The Treasury Wine Estates Ltd (ASX: TWE) share price is racing higher today following the release of its half year results. Due largely to being shut out of Mainland China, the wine giant reported a 10.1% decline in net sales revenue to $1,267 million and a 6.7% decline in EBITS to $262.4 million. Management has advised that it is now shifting its focus from “recovery and restructuring” to one of “growth and innovation.” This appears to have gone down well with the market.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Treasury Wine share price with a 10% gain following its results. The worst performer has been the Netwealth Group Ltd (ASX: NWL) share price with a 16% decline after its results disappointed the market.

The post ASX 200 (ASX:XJO) midday update: CSL upgrades guidance, Treasury Wine jumps appeared first on The Motley Fool Australia.

More reading

• Cheers! Treasury Wine (ASX:TWE) share price jumps 13% on half year results
• Fortescue (ASX:FMG) share price slips on FY22 half-year results
• CSL (ASX:CSL) delivers US$1.7bn half year profit and tips plasma collection rebound
• Down by a quarter in less than three months, is the CSL (ASX:CSL) share price a buy?
• 5 things to watch on the ASX 200 on Wednesday

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. owns and has recommended CSL Ltd. and Netwealth. The Motley Fool Australia owns and has recommended Netwealth. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/TBIlDJf

The Breville Group Ltd (ASX: BRG) share price soared by 9% shortly after the market open on Wednesday, after the home appliances company reported its half-year earnings for the 2022 financial year (1H22).

The Breville share price is currently up 1.09% to $28.75 after closing at $28.45 yesterday. The shares hit $31 this morning before falling back.

Breville share price up on solid first half update 

• Revenues up 26.5% from $711 million in 1H21 to $878.7 million in 1H22
• Earnings before interest, tax, depreciation and amortisation (EBITDA) up 16.6% from $107.6 million to $125.5 million
• Earnings before interest and tax (EBIT) up 22.8% from $91.7 million to $112.5 million
• EBIT margin of 12.8%, down slightly from 12.9% in 1H21
• Net profit after tax (NPAT) up 25.1% from $62.1 million to $77.7 million
• Earnings per share (EPS) rose 23.7% from 45.1 cents to 55.8 cents
• Interim dividend of 15 cents per share, fully franked.

What else happened in the first half?

Breville experienced strong growth across all of its target markets over the half. Europe, Middle East and Africa revenue saw the most growth, rising by 39.4% to $201.1 million. Asia Pacific revenue was up 22% to $162.7 million. Americas revenue rose 17.1% to $370.1 million.

All three areas have now seen compounded annual growth of more than 20% since the 2019 financial year. Breville said its gross margins were affected by a “turbulent” environment and inflation headwinds, partially offset by price increases.

What did management say?

Here’s some of what Breville CEO Jim Clayton had to say on these results:

Sustained consumer demand across geographies and categories underpinned our 1H22 performance. The business continued its move from strength to strength delivering 23.6% sales growth, despite a strong prior period and global logistical constraints (most acute in the US); double digit EBIT growth with continued investment in mid-term growth drivers; and, an improved inventory position, which we plan to further reinforce in the 2H to support growth in the 1H23.

What’s next?

Going forward, Breville has told investors to expect EBIT for the full 2022 financial year to be “consistent with the market’s current consensus forecast of ~$156 million”. However, that assumes no significant change in economic conditions and no further supply chain disruptions “beyond what we experienced” in the first half.

Breville said that it is expecting inflationary pressures to continue, as well as supply chain constraints. The company also said that it would “begin building inventory for peak season FY23 to try to get ahead of ongoing logistical challenges”.

Breville Group share price snapshot

Although the Breville share price had a strong open today, it remains down by 10.9% so far in 2022. It’s also down by 7.9% over the past 12 months. Over the past 5 years, Breville shares have risen by a healthy 231%.

At the current Breville share price, this ASX 200 share has a market capitalisation of $3.96 billion, with a trailing dividend yield of 0.95%.

 

The post Breville (ASX:BRG) share price pops after 25% profit surge appeared first on The Motley Fool Australia.

More reading

• 3 excellent ASX growth shares to buy before it’s too late
• 3 fantastic ASX 200 growth shares to buy
• Here are 3 excellent ASX growth shares for investors in February
• 4 fantastic ASX growth shares to buy
• Top ASX shares to buy in February 2022

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/JWMNh5C

Motley Fool Australia Chief Investment Officer Scott Phillips joined Nine’s Late News on Tuesday night to discuss the huge interim dividend from BHP Group Ltd (ASX: BHP), rising interest rates — helping banks but costing mortgage-holders — and falling energy stocks as Ukraine tensions ease.

The post BHP’s stunning dividend, rates to rise, energy falls. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

More reading

• Is it a buy? Top brokers rate BHP (ASX:BHP) share price after solid earnings
• Top fundie says these blue chip ASX shares are a buy
• BHP (ASX:BHP) declares record interim dividend: What you need to know
• Record exploration: Are ASX 200 shares gearing up for the next mining boom?
• ASX 200 (ASX:XJO) midday update: BHP and SEEK impress, Beach sinks

Motley Fool contributor Scott Phillips 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/TCIrHEW

The Liontown Resources Limited (ASX: LTR) share price is off to the races today.

Liontown shares closed yesterday at $1.39. The ASX lithium producer is currently trading for $1.61 per share, up 16% at time of writing.

The Liontown share price leap today follows the company’s announcement that it’s entered into a binding lithium supply agreement with US electric vehicle giant Tesla Inc (NASDAQ: TSLA).

Highlights below…

Liontown share price soars on agreement

ASX investors are bidding up the Liontown share price after the battery materials company reported that Tesla has agreed to purchase Lithium Spodumene Concentrate from its new $473 million Kathleen Valley Lithium Project, located in Western Australia.

The initial 5-year agreement is expected to commence in 2024. It will see Liontown supply Tesla with 100,000 dry metric tonnes (DMT) of Lithium Spodumene Concentrate in the first year, with Tesla buying 150,000 DMT in the following years.

The agreement remains conditional on Liontown commencing commercial lithium production at its Kathleen Valley Lithium Project by 2025, along with the 2 parties completing negotiations by 30 May 2022.

Liontown expects to start major construction activities at Kathleen Valley by the fourth quarter of 2022.

The Liontown share price could also be getting a boost from the report that Tesla’s purchase agreement equates to approximately one-third of the project’s initial forecast production capacity.

With the new Tesla agreement taken into account, Liontown said it’s now contracted more than half of its forecast production from the Kathleen Valley Lithium Project during the first 5 years of operation.

What did management say?

Commenting on the agreement, Liontown’s CEO Tony Ottaviano said:

Securing our second offtake sales agreement is another fantastic milestone for Liontown towards the development of the Kathleen Valley Lithium Project, and we are absolutely delighted to have signed this agreement with leading EV manufacturer, Tesla… Our shareholders should be proud that future Tesla cars will be powered by Liontown lithium.

We are also continuing to progress discussions with additional potential customers for the remaining available production and we are looking forward to announcing additional arrangements in the weeks ahead as we continue to implement our strategy to develop the project and deliver value for our shareholders.

Liontown share price snap shot

The Liontown share price is up an impressive 260% since this time last year.

By comparison the S&P/ASX 200 Index (ASX: XJO) has gained 5% over the 12 months.

So far in 2022, Liontown shares are down 10%.

The post Liontown (ASX:LTR) share price rockets 16% today on Tesla lithium deal appeared first on The Motley Fool Australia.

More reading

• Is Tesla stock a buy?
• This is how we’ll know the share market has bottomed
• Here are the top 10 ASX shares today
• ‘Strong support’: Here’s why the Liontown (ASX:LTR) share price is pouncing higher today
• Why Tesla stock was on fire today

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/Ndk4MDa

The Corporate Travel Management Ltd (ASX: CTD) share price is up more than 5% today amid the company announcing a 120% jump in revenue and other income.

Corporate Travel released its half-year results this morning, spurring its share price to $23.97 at the time of writing, a 5.13% gain.

Let’s take a look at what the travel company reported.

Corporate travel share price ascends amid half yearly results

Highlights of the company’s half-year (H1 FY22) results include:

• Total revenue and other income surged 120% on the previous corresponding period (PCP) to $163 million
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $18.2 million, a 219.7% boost on the PCP. (In H1 FY22, underlying EBITDA was -$15.2 million)
• Underlying net loss after tax of $0.4 million, compared to a loss of $26.6 million in the PCP
• Total transaction value (TTV) of $2,083.1 million, a 416% boost on the PCP

What else happened in the half?

The COVID-19 Omicron variant cut down travel activity between November and January. However, Corporate Travel Management is expecting this to ramp up in areas where travel restrictions have been lifted.

The company is seeing a quick rebound in February in the United Kingdom and North America.

In the first half of 2022, the company invested in rebuilding staff levels in preparation for the travel recovery.

In North America, the company saw a 213% boost in revenue and other income to $92 million. Client wins are at the highest levels in the company’s history in North America. These are at a greater rate than prior to the pandemic.

Revenue in Europe also jumped by 229% to $43.8 million. Australia and New Zealand was impacted by restrictions during the half, however, underlying EBITDA still finished in the green at $0.9 million. Domestic travel is bouncing back in the ANZ region.

Asia losses were “well contained” despite travel restrictions in most of the region in the first half of 2022.

Management comment

Commenting on the results, managing director Jamie Pherous said:

The strategic acquisitions we made during the pandemic have transformed CTM into a much larger business with greater exposure to the North America market which, along with the UK market, is rebounding sharply.

Revenue in North America is now above pre-CTM COVID levels shows, pointing to the potential of the business when the travel market fully recovers. Strategic M&A has made North America our largest region and integration execution is well advanced.

Because of our expanded global footprint and strong financial position, we are targeting EBITDA of $265m in full recovery compared with $150m pre-pandemic

What’s next

Corporate Travel Management expects to complete the acquisition of Helloworld Corporate in the third quarter of 2022, subject to regulatory and contractual approvals.

The company didn’t offer a guidance for FY22 due to short term uncertainties. However, the company believes underlying EBITDA will build in February and March.

When the market fully recovers, Corporate Travel Management estimates it can achieve an underlying EBITDA of $265 million and revenue of $810 million.

Corporate Travel share price summary

The Corporate Travel share price has surged 32% in the past year and more than 8% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 5% over the past year.

Corporate Travel has a market capitalisation of roughly $3.4 billion based on today’s share price.

The post Corporate Travel (ASX:CTD) more than doubles its revenue amid easing COVID-19 travel restrictions appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares to buy that are perfectly set up to rally
• These were the best performing ASX 200 shares last week
• 2 ASX shares that top analysts are loving right now
• Are ASX travel shares finally emerging from the COVID storm?
• Top broker says Corporate Travel Management (ASX:CTD) shares can rise 36%

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 Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/1r4ImLW

The Lark Distilling Co Ltd (ASX: LRK) share price is freefalling during Wednesday morning trade.

During market open, the whisky producer’s shares hit an intraday low of $3.48, before slightly bouncing back.

At the time of writing, Lark shares are now changing hands at $3.60, down 20.88%.

Lark CEO shock resignation

Investors are selling off Lark shares following the unexpected announcement regarding its most senior leader.

In a statement to the ASX, Lark advised that its managing director and CEO, Geoff Bainbridge has tendered his resignation.

The reason given as to why Mr Bainbridge has decided to depart the company is due to a personal matter. This was brought to the attention of the board late yesterday afternoon.

The immediate effect of Mr Bainbridge’s resignation will see current non-executive director, Laura McBain assume the role on an interim basis.

Ms McBain’s previous experience includes CEO and managing director of ASX-listed Bellamys from 2014 to 2017. Prior to this, Ms McBain held the title of CEO/general manager of the infant formula company since 2007.

During her time, Ms McBain was responsible for change, innovation and business growth including expansion into South East Asia and China.

Ms McBain also held the title of managing director of Maggie Beer from 2017 to 2019, and former non-executive director of Export Finance Australia from 2014 to 2020.

Lark stated that it had already begun its global CEO search in December 2021 as part of its succession planning. The process will now be accelerated to find a permanent replacement for the top job.

About the Lark share price

Over the last 12 months, the Lark share price has surged to register a gain of 116% for investors.

The company’s shares accelerated from July to mid-October, reaching a 52-week high of $5.60. Since then, its shares have gradually declined under the $5 mark before sinking to $3.60 today.

Lark commands a market capitalisation of roughly $271 million, with approximately 75.28 million shares on its registry.

The post Here’s why the Lark (ASX:LRK) share price is nosediving 21% today appeared first on The Motley Fool Australia.

More reading

• Is it a buy? Top brokers rate BHP (ASX:BHP) share price after solid earnings
• More lithium! Here’s why the Ioneer (ASX:INR) share price is surging 10% higher today
• In the dirt: Evolution Mining (ASX:EVN) share price slips amid 60% profit plunge
• Profit surge fails to boost Santos (ASX:STO) share price today
• Cheers! Treasury Wine (ASX:TWE) share price jumps 13% on half year results

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/PeuQv6y

Shares in ASX resources giant BHP Group Ltd (ASX: BHP) are sliding from the open today and now trade at $46.98 apiece.

Following the release of the miner’s better than expected half-yearly results yesterday, analysts at several investment firms have chimed in on BHP’s investment debate. Let’s take a closer look.

Is BHP a buy after its strong earnings?

Analysts at Australian investment bank Macquarie were quick to jump in on the commentary. They note BHP’s strong cash flow result underpinned by working capital management in 1H FY22.

This enabled BHP to declare a stronger than expected dividend payout. This trumped analysts’ estimates at both that level and the net profit level.

In fact, the mining giant’s underlying results were 6%-8% higher than what Macquarie had baked into its own modelling, according to the broker.

It was happy with the company’s balance sheet and amount of leverage at 31 December. Macquarie responded to management’s guidance on net debt.

“Post dividend payment,” the broker said, “BHP’s net debt will have increased to $13.7 billion, within the new wider guidance range.” That compares to roughly $6 billion at the end of 2021.

It will be interesting to see what this will mean for the BHP share price.

Meanwhile, over at RBC Capital Markets, analysts note that BHP’s debt guidance of $5 billion to $15 billion still leaves plenty of headroom for the miner to make acquisitions, future buybacks, or bump its dividend further.

Not to mention, if commodity prices continue their current rally, the upside case is even stronger for this to happen, according to the broker.

RBC analysts reckon BHP’s results were an “incremental positive”. They suggest investors might continue bidding up shares on what are “already very strong market perceptions” of the miner.

BHP has managed to “drive a successful unification” whilst posting “a very strong half-year financially, leaving the group with a blank canvas for future M&A or cash returns,” the broker says.

Macquarie rates BHP as a buy and values the company at $51 per share. Whereas RBC has its rating as sector perform with a $46 price target.

After a string of broker updates yesterday, the consensus still has BHP weighted towards a hold. The average price target is $46.23, which is a small amount of downside potential yet to be priced in.

BHP share price snapshot

The BHP share price has had a difficult year, although it has regained steam lately. In the last 12 months, BHP shares are barely breakeven, 0.03% in the red based on the current price. Although they are up 13% year to date.

On closer inspection, the BHP share price has tracked the S&P/ASX 300 Metals & Mining Index (ASX: XMM) closely over the last year, as shown in the chart below.

The post Is it a buy? Top brokers rate BHP (ASX:BHP) share price after solid earnings appeared first on The Motley Fool Australia.

More reading

• Top fundie says these blue chip ASX shares are a buy
• BHP (ASX:BHP) declares record interim dividend: What you need to know
• Record exploration: Are ASX 200 shares gearing up for the next mining boom?
• ASX 200 (ASX:XJO) midday update: BHP and SEEK impress, Beach sinks
• BHP (ASX:BHP) share price storms higher following ‘better than expected result’

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/US8lDwW

The Ioneer Ltd (ASX: INR) share price has been a strong performer on Wednesday.

In morning trade, the US based lithium-boron producer’s shares are up 10% to 62.5 cents.

Why is the Ioneer share price racing higher?

Investors have been bidding the Ioneer share price higher today following the release of an update on a lithium offtake agreement at its Rhyolite Ridge Lithium-Boron Project in Nevada.

According to the release, EcoPro Group, a major cathode supplier for global battery manufacturers, has agreed to increase its offtake volume with Ioneer to 7,000 tonnes per annum. This compares to 2,000 tonnes per annum previously and is the maximum amount under the June 2021 binding agreement.

EcoPro expects to convert this lithium carbonate into high purity lithium hydroxide at its recently complete integrated cathode plant in Korea.

Management notes that this agreement represents approximately 34% of Ioneer’s annual lithium carbonate production from Rhyolite Ridge in the first three years of operation. It is expecting to produce an annual average of approximately 20,600 tonnes of lithium carbonate per year over the 26-year mine life.

Management commentary

Ioneer’s Managing Director, Bernard Rowe, commented: “We are delighted that EcoPro Innovation has increased their lithium carbonate offtake commitment from Rhyolite Ridge. As a major cathode supplier for global battery manufacturers EcoPro Group is an ideal partner for Ioneer. We are encouraged to support the US car manufacturing industry and look forward to continuing to work with EcoPro Group in these endeavours.”

This sentiment was echoed by EcoPro Innovation’s President, Anthony Kim.

He said: “We have always had great relationship with ioneer and we are pleased to strengthen our partnership with ioneer by increasing lithium carbonate offtake volume. We, EcoPro as a group, have intentions to expand overseas to support environmental policies such as carbon neutralization and net zero emission. With ioneer as a partner, we look forward to contributing to the electrification of transportation in the USA.”

The post More lithium! Here’s why the Ioneer (ASX:INR) share price is surging 10% higher today appeared first on The Motley Fool Australia.

More reading

• Why the Ioneer (ASX:INR) share price has dropped 19% in a month

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/1FdOJL8

The Evolution Mining Ltd (ASX: EVN) share price is in the red after releasing its much-awaited half-year results.

In early morning trade, shares in the gold mining company are down 0.63% to $3.91. This places the company’s shares at a 28% discount to its 52-week high.

Evolution Mining share price sinks on steep profit fall

Here are the highlights of the company’s latest results:

• Revenue down 9% from prior corresponding period to $898.6 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) down 23.6% to $393.3 million
• Underlying net profit after tax (NPAT) down 57.2% to $100.1 million
• Statutory NPAT down 60.3% to $90.8 million
• Fully franked interim dividend of 3 cents per share, down from 7 cents per share
• Total gold production of 318,766 ounces at an all-in sustaining cost of $1,381 per ounce

What happened during the first half?

During the six months ending 31 December 2021, Evolution Mining experienced a reduction in revenue and earnings compared to the same period a year earlier.

According to the release, the company’s revenue failed to surpass the previous first half due to low gold volume from Mt Rawdon and Red Lake mines. On top of this, Evolution achieved a 4% lower gold price at $2,371 per ounce.

Other key events during the half-year period included the Kundana acquisition from Northern Star Resources Ltd (ASX: NST). Evolution processed its first higher grade ore from the mine in late August. Efforts to reduce duplicate activities and recognise some synergies are currently underway.

In November, the Evolution Mining share price moved to the upside following the $1 billion acquisition of the Ernest Henry mine in Queensland. The Australian gold mining giant has a remaining $200 million payable on 6 January 2023 for the acquisition.

ASX-listed Evolution Mining now estimates its mineral resources to be around 29.6 million ounces. This represents a 12% increase year-on-year.

What did management say?

Evolution Mining executive chair Jake Klein commented on the result:

The half-year to 31 December 2021 has been transformational for Evolution. The portfolio has benefitted from key acquisitions and a significant investment in growth projects at our cornerstone assets, which is supported by a high quality Mineral Resource and Ore Reserve base, and our business is well-positioned to deliver a very strong second half.

Full ownership of Ernest Henry will deliver a material increase in cash flow and financial performance and was considered when declaring the interim dividend. Evolution’s history of dividend payments with almost A$1 billion paid since 2013 demonstrates our commitment to maximising shareholder returns.

What’s next?

In terms of guidance, Evolution Mining expects to produce 670,000 to 725,000 ounces of gold in FY22. Notably, this is forecast to be done with an AISC between $1,135 to $1,195 an ounce.

On the dividend front — investors will need to be on the register before 28 February 2022 when shares will go ex-dividend. From there, shareholders can expect to receive 3 cents per share on 25 March 2022.

Evolution Mining share price snapshot

Despite inflation fears, the Evolution Mining share price has been sitting in the red over the last 12 months. Shareholders are have witnessed a 16.9% fall in the gold miner’s shares during this time. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is up 4.3% in the same timeframe.

The Evolution Mining share price is now trading on a price-to-earnings (P/E) ratio of around 19 times.

The post In the dirt: Evolution Mining (ASX:EVN) share price slips amid 60% profit plunge appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today
• Why are ASX 200 gold shares rocketing today?
• Why is the Evolution Mining (ASX:EVN) share price leaping 8% today?

Motley Fool contributor Mitchell Lawler 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/wDiIesR