Tag: Motley Fool

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.

It wasn’t all that long ago that many investors viewed Bitcoin (CRYPTO: BTC) as an ideal hedge against inflation. They reasoned that the cryptocurrency was like gold — long considered to be a solid inflation hedge — in one important way. Bitcoin was a limited resource, with a maximum of only 21 million coins allowed to exist.

However, this theory doesn’t claim the luster that it once did. Here’s why.

The numbers don’t lie

Inflation remained low throughout the last decade. Meanwhile, Bitcoin delivered impressive gains. There wasn’t a compelling reason to dismiss the idea that the cryptocurrency could serve as a good hedge against inflation with inflation rates at historical lows.

Then the COVID-19 pandemic changed everything. The federal government, afraid of the pandemic’s economic impact, responded with unprecedented stimulus packages. At the same time, supply chain disruptions resulted in many businesses being unable to keep up with demand. After a long hibernation, inflation began to rear its ugly head once again.

It was the perfect scenario for Bitcoin to show just how great of an inflation hedge it could be. But it didn’t.

Bitcoin Price data by YCharts

No, Bitcoin didn’t completely fall apart. However, over the past 12 months, the cryptocurrency took investors on a rollercoaster ride. It’s up, but only by a little over 20%. Bitcoin is currently near its lowest level in six months.

The inflation rate, though, has more than quintupled during the same period. The numbers don’t lie: Bitcoin has proven to be an abysmal hedge against inflation.

Bitcoin’s underlying problem

Why isn’t Bitcoin better at hedging against inflation? We can easily rule out one possible reason. It isn’t that a large number of new digital coins have been mined. The number of Bitcoins in circulation has risen by less than 1.8% over the past 12 months.

The primary underlying problem for Bitcoin is that for any asset to be an inflation hedge, investors must actually believe that it will hold its value as inflation rises. It’s abundantly clear that isn’t the case with Bitcoin.

Bitcoin is only as valuable as investors believe that it is. It doesn’t have any real intrinsic value like stocks do.

Investors think that cryptocurrencies, in general, are risky and volatile. And they seem to be lumping Bitcoin in with every other digital coin. Bitcoin has fallen roughly the same amount as some altcoins such as Dogecoin over the last three months.

A hedge in waiting?

Don’t throw in the towel on Bitcoin as an inflation hedge just yet, though. There’s still a possibility that the cryptocurrency could be exactly what investors once hoped it would be.

Increased adoption of the cryptocurrency would help. The more real-world utility that Bitcoin has, the more justifiable its valuation will be. At some point, the digital coin’s valuation could become more stable.

If and when this happens, Bitcoin’s fluctuations could inversely correlate with inflation rates much more than they do now. The cryptocurrency isn’t an inflation hedge yet, but it just might be a hedge in waiting. 

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

The post Has the case for Bitcoin as an inflation hedge crumbled? appeared first on The Motley Fool Australia.

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Keith Speights has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin. The Motley Fool Australia owns and recommends Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

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Key points

• Treasury Wine shareholders, have lost almost 15% since January 1
• Morgan’s is constructive on the company, and see’s a potential of 34% at the current share price
• The broker positive with its recent acquisition of Frank Family Vineyards
• Goldman Sachs isn’t as positive on the Frank Family Vineyards transaction and is neutral on the stock

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The Treasury Wine Estates Ltd (ASX: TWE) share price is rangebound from the open today and is now trading at $10.57 apiece.

Lately however, it’s been a bloodbath for Treasury Wine shareholders, having lost almost 15% since January 1 and more than 15% in the last month of trading.

Shares in the wine specialist fell off the cliff-face in early January, amid a brutal ASX selloff that disproportionately hurt high-beta names like the company and its peers in the S&P/ASX 200 Consumer Staples Index (XSJ).

Treasury Wine leads the broad index in losses this year with the wider sector booking a 9% dip into the red since we commenced trading in 2022.

So what’s next for the listed-liquor player – whose portfolio includes brands like Penfolds, Beringer, Lindemans, Wolf Blass and Rosemount Estate and many more – in 2022? Let’s take a look.

What’s next for Treasury Wine Estates?

There’s no denying that January 2022 has been one to forget with respect to the stock market and its ability to create wealth.

In fact, if global markets close down again today, it will mark the worst January performance on the major indices on record – that’s something to think about.

Hence why the team at Morgan’s is constructive on the Treasury Wine share price, and see’s a potential of 34% upside with its valuation of $14.06 on the stock.

“TWE has the China reallocation risk and it will take 2-3 years to recover these earnings in new markets. However once it comps China earnings, we expect TWE to deliver strong earnings growth from the 2H22 onwards” Morgans said in a recent note.

“Organic growth will be supplemented by [merger and acquisition activity] M&A”, the broker says, noting strengths of this to the company’s earnings profile.

With respect to the company’s recent M&A activity, Morgans was positive with its recent acquisition of Frank Family Vineyards, claiming the “high margin business” should accelerate Treasury Wine’s efficiency goals.

“We view TWE’s recent acquisition of Napa Valley luxury wine business, Frank Family Vineyards (FFV) as strategically important” Morgans said in an update to clients.

“This high margin business should see [Treasury Wine] achieve its US margin target two years earlier than planned.”

Meanwhile, Goldman Sachs isn’t as positive on the Frank Family Vineyards transaction. The fellow broker had a mixed reaction to the company’s decision to tuck the smaller entity into its current portfolio of luxury brands.

Goldman also noted the deal could add in additional e-commerce capacity and is parallel with the company’s pivot strategy in the Americas.

“However”, the broker cautioned, “we remain conservative in the potential for FFV to become a margin accretive = channel for wine currently used in lower margin brands”.

It expects “this acquisition to remain a lacklustre addition into FY22/23,” retaining its neutral rating on the stock, however, lifted its price target by 20 cents to $11.80 in the update.

Alas, with the recent turmoil in global equity markets set to continue this week, time will tell which broker’s forward estimates will come to fruition.

A bit more on the Treasury Wine share price

The Treasury Wine share price is down more than 14% this year to date and had collapsed more than 15% over the past month.

Although, in the past year of trading, shares have held gains and are up 5% in that time – more than can be said for many other ASX names at the moment.

At the time of writing, the company has a market capitalisation of $7.6 billion and trades on a price to earnings (P/E) ratio of approximately 30.5x.

The post The Treasury Wine (ASX:TWE) share price has plunged 25% from its 2021 highs. What’s next? appeared first on The Motley Fool Australia.

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• Here are Scott Phillips’ top 5 ASX shares for 2022. Is it time to buy?
• 5 things to watch on the ASX 200 on Monday

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 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.

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Shares in ASX 100-listed technology company NextDC Limited (ASX: NXT) are rallying after dropping from the open today following a company announcement.

At the time of writing, NextDC shares are fetching $10.63 apiece, up 2.36%, after hitting a low of $10.15 early in the session.

It’s a welcome sign for the data centre-as-a-service company which has seen its shares slip more than 19% year to date amid a tech-heavy selloff across the ASX.

The broader S&P/ASX All Technology Index (ASX: XTX) is also having a better start to the trading week, up 2.45% at the time of writing.

Let’s have a look at NextDC’s latest news.

What did NextDC announce?

This morning, the company advised that “following recent customer wins”, it has secured an increase in contracted utilisation for the 6 months ending 31 January 2022.

According to the company’s announcement, specifically-contracted utilisation (excluding expansion options and reservations) has increased by approximately 5.5MW since 30 June 2021 to roughly 81MW at 31 January 2022.

NextDC says it will book sales for “most of the new contracted capacity” from next year. As such, revenue is expected to be recognised from FY23 “following completion and commissioning of the associated data halls”.

The company has been building on momentum in contracted utilisation for some time. For instance, in its FY21 results, it announced that contracted utilisation increased 5.5MW, or 8%, to 75.5MW, while “interconnections” accounted for 7.7% of recurring revenue.

At the time, NextDC also advised that approximately 80% of built capacity was contracted at 30 June 2021, whilst 87% of contracted utilisation was billing at the same time.

Back then, in August 2021, the company said it had “significant expansion potential with total planned capacity of 400MW”. This excluded Sydney’s “target capacity of around 300MW announced 28 July 2021”.

It had guided capital expenditures of $480-$540 million for FY22, focused mainly on building key expansion networks in Melbourne and Sydney (M3 and S3/4 respectively).

NextDC’s CEO and Managing Director Craig Scroggie said the company’s “sales pipeline remains robust”:

The demand for our premium data centre services remains strong and we are pleased to have secured these new material customer commitments, including new hyperscale orders, across our national network of world class facilities.

Furthermore, the sales pipeline remains robust, with the Company seeing the strong sales momentum carry forward into the second half of FY22.

NextDC is also prioritised securing and developing new contracted capacity. That, in turn, will generate “annuity-style economic returns”, according to Scroggie.

“We remain on track to bring our third generation hyperscale data centre campuses, M3 and S3, into service at the end of FY22, further expanding our muti-site, multi-zone availability solutions for customers”.

NextDC share price summary

The NextDC share price is already down 19% this year to date after sliding 19.63% in the past month. The selloff in ASX tech shares has been brutal so far this year and the company isn’t immune.

As such, over the last 12 months, shares are down more than 10% after trading as high as $14.04 in September last year.

The post Why is the NextDC (ASX:NXT) share price climbing today? 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 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.

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Key points

• Airtasker’s growth accelerated in the second quarter
• Strong demand experienced as lockdowns eased
• Management has upgraded its second half guidance

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The Airtasker Ltd (ASX: ART) share price has been on fire on Monday morning following the release of its second quarter update.

At the time of writing, the online local services marketplace provider’s shares are up 17% to 75 cents.

Airtasker share price rockets on Q2 update

• Gross marketplace volume (GMV) up 39% quarter on quarter to $48.6 million
• Record weekly GMV run rate of $4.5 million achieved in December
• UK GMV up 121% over the prior corresponding period and US posted task growth of 71% quarter on quarter
• Second quarter revenue up 37.5% quarter on quarter to $8.1 million
• Second half GMV guidance upgraded to $107 million to $110 million

What happened during the quarter?

Airtasker had a strong second quarter, with GMV increasing 39% quarter on quarter to $48.6 million after the easing of lockdowns. Management notes that year on year customer acquisition rose 2.1% in October, 6.6% in November, and then 8.9% in December. This was complemented by a 24% increase in quarterly average task price over the prior corresponding period to $255.

In light of this strong quarter, management has upgraded its GMV guidance for the second half from $105 million to between $107 million and $110 million. This will represent full year GMV of $191 million to $194 million, which will be an increase of 25% to 27% over FY 2021’s GMV of $153.1 million.

Management commentary

Airtasker’s Co-Founder and CEO, Tim Fung, was pleased with the quarter.

He said: “The strong performance this quarter demonstrates the robust and resilient underlying growth of the Airtasker marketplace. Based on our current growth trajectory, a clear outlook on no further lockdowns and an exciting product and marketing roadmap – we’re super pleased to be upgrading our H2 guidance for FY22.”

The post Why the Airtasker (ASX:ART) share price is rocketing 17% higher today appeared first on The Motley Fool Australia.

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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 recommended Airtasker Limited. 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.

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Key Points

• PlaySide Studios shares lift following another record performance
• All-time high revenue of $5.36 million, up 71% pcp
• Management experts strong pipeline of releases in FY22

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The PlaySide Studios Ltd (ASX: PLY) share price is heading north today following the company’s latest trading update for FY22.

At the time of writing, the video game developer’s shares have accelerated to 99.5 cents, up 3.65%.

What’s driving PlaySide Studios shares higher?

Investors are buying up PlaySide Studios shares after the company reported a robust performance for the second-quarter of FY22.

According to its release, PlaySide Studios advised it has achieved record quarterly unaudited commercial revenue of $5.36 million. This represents an increase of 71% over the corresponding period (pcp), and a 33% improvement quarter-on-quarter (QoQ).

Management credited the company’s original IP business which registered $3.3 million in revenue, a growth of 53% on pcp. First development revenue for Age of Darkness: Final Stand and initial revenue from the Dumb Ways to Die portfolio primarily contributed to the result.

The work for hire business continued its growth trajectory with $2.08 million in revenue, up 112% on pcp and 57% QoQ. The key achievements included signing a major strategic agreement with 2K Games and a material new contract with Shiba Inu Games.

In line with its growth plans, PlaySide Studios is continuing to invest in its game development roadmap. The investment in original IP titles across mobile, PC & console platforms is expected to provide a strong pipeline of releases in FY22.

The company declared $33.01 million in cash reserves, representing an increase by $23.67 million for the quarter. It is worth noting though that the bulk of the positive movement comes from a net $26.7 million placement and share purchase plan.

What did management say?

PlaySide Studios CEO, Gerry Sakkas commented:

PlaySide continues to deliver strong results with another record quarter of revenue, building on a strong start to FY22. Our Original IP business continued to track extremely well with development revenue generated from Age of Darkness: Final Stand and games revenue from our Dumb Ways to Die acquired portfolio being recorded for the first time.

Additionally, highly anticipated title Legally Blonde entered soft launch during the quarter and is tracking strongly towards commercial launch in Q4 FY22.

PlaySide Studios share price snapshot

Over the past 12 months, PlaySide Studios shares have gained 150%, but are down by more than 10% year-to-date.

Based on today’s price, PlaySide Studios commands a market capitalisation of roughly $138.52 million, with approximately 144.29 million shares outstanding.

The post PlaySide Studios (ASX:PLY) share price climbs on record revenue appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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Key points

• The Ansell share price is down more than 20% on Monday
• First half earnings are expected to be significantly impacted due to COVID-19 demand dwindling
• A US customs order brings disposable glove supply to a halt
• Full year guidance has now been revised lower

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The Ansell Limited (ASX: ANN) share price is falling off a cliff following the release of a trading update.

In morning trade, shares in the protective personal equipment manufacturer are down 20.4% to $24.90. After opening, the company’s share price touched a new 52-week low of $23.85.

Ansell share price sinks on disappointing first half earnings

Investors are applying selling pressure to the Ansell share price on Monday morning after checking out the company’s latest trading update.

The details contained in the release relate to the half-year ended 31 December 2021. While the official first-half results are expected to be released on 15 February 2022, today’s announcement gives shareholders a fair idea of what those numbers will look like.

According to the release, Ansell expects to deliver FY22 first-half sales of US$1,009 million. Notably, this represents an increase of 7.6% compared to the prior corresponding period. However, as we run further through the financials we’ll see this is the full extent of positive news.

Preliminary numbers suggest Ansell will report earnings before interest and tax (EBIT) of US$111 million. In addition, earnings per share (EPS) is slated to come in at 61 US cents for the half. Disappointingly, these metrics are down 24.7% and 26.4% respectively from the previous year’s first half. Unsurprisingly, the Ansell share price is struggling on this news.

According to Ansell, margin compression is a result of COVID-19 related operational challenges and softer demand in the exam/SU division.

Additionally, the company’s outsourced finished goods experienced a lower volume of sales as customers opted to reduce inventories prior to ordering more.

Other factors hurting business during the half included higher freight and labour costs; as well as manufacturing shutdowns. Although, higher costs were partially dealt with through passing on price increases to customers.

What else?

Investors could be responding negatively to Ansell’s other portion of today’s update. Regarding manufacturing and supply, the company has been witnessing an increase in COVID-19 cases at its manufacturing facilities. Because of this, the Malaysia facility had to shut down completely last week.

Meanwhile, on 28 January 2022, the United States Customers and Border Protection issued a withhold release order against YTY Industry Holdings Sdn Bhd (YTY). This company is a major supplier of exam/SU gloves to Ansell.

The order means ASX-listed Ansell will be unable to import its disposable gloves into the US while the order stands. At this stage, YTY is working with the necessary parties to show that its operations are free of forced labour practices.

Lastly, Ansell provided a guidance update today to allow for disruptions to YTY supply. As a result, the company now expects FY22 EPS to be between 125 cents to 145 cents. This is compared to the previous range of 175 cents to 195 cents.

The Ansell share price is now down ~37% in the last 12 months following today’s update.

The post Ansell (ASX:ANN) share price crashes 20% as guidance slashed appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares that could be buys for both growth and dividends

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 recommended Ansell Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• ASX dividend shares could be useful for income, particularly after the recent drop in the market
• Adairs is an expanding homewares and furniture retailer that is priced cheaply and expected to pay a big dividend
• Soul Pattinson is an investment conglomerate that has the longest-running streak of dividend growth

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The ongoing ASX share market volatility may present income-focused investors with the ability to buy ASX dividend shares at a cheaper price and with a higher dividend yield.

When share prices fall, it means that the prospective dividend yield is larger for new investors.

Whilst there’s more to consider about a business than just its yield, it could be a useful time to consider these two ASX dividend shares:

Adairs Ltd (ASX: ADH)

Adairs is one of Australia’s leading retailers of furniture, homewares and furnishing.

It’s currently rated as a buy by a few different brokers including UBS and Morgans. Their most recent thoughts came after the recent trading update which was for the period where there were lockdowns and supply chain impacts affecting the business.

However, UBS reckons that these impacts are only short-term problems and the business can come through the problems. Store trading days were reduced by around 31% in the 26 weeks ending 26 December 2021. Stock flow from Asia remains inconsistent because of factory and shipping capacity disruptions across the region. It has faced challenges with its own supply chain with its new distribution centre and workforce shortage.

However, the ASX dividend share has plans to grow profit in a number of ways with its national distribution centre which is expected to reduce, upsizing selected stores, expanding its range, adding to its omnichannel capabilities and integrating Focus into the business.

Morgans thinks the Adairs share price is valued at 8x FY23’s estimated earnings with a projected FY23 dividend yield of 12.4%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

Soul Pattinson is a very old investment conglomerate which has been listed for over 100 years, though it started off as just a pharmacy business. It has paid a dividend every year since 1903.

The business has built a diversified portfolio of assets that, combined, provide the ASX dividend share with a fairly consistent and defensive source of investment income.

Some of its investments includes listed businesses like: TPG Telecom Ltd (ASX: TPG), Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Pengana Capital Group Ltd (ASX: PCG), Pengana International Equities Ltd (ASX: PIA) and Bki Investment Co Ltd (ASX: BKI).

Soul Pattinson also has unlisted investments including resources, agriculture, financial services and swimming schools.

It has managed to grow its dividend every year since 2000, which is the record for consecutive years of dividend increases.

The company is steadily diversifying its portfolio away from its main, long-term investments. Soul Pattinson is looking at opportunities like the energy transition, global shares, education, health and ageing, ‘real assets’, financial services and agriculture.

Soul Pattinson has a trailing grossed-up dividend yield of 3.3%.

The post Are these 2 ASX dividend shares buys in February 2022? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns Pengana International Equities Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended ADAIRS FPO, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns and has recommended ADAIRS FPO, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A Queensland man is facing up to a decade in jail after pleading guilty to 2 charges relating to insider trading of an ASX-listed company.

Jin Xi Li of Caloundra, Queensland appeared in the Brisbane District Court to plead guilty to one charge of trading while in possession of inside information.

He also pleaded guilty to a charge of getting his wife to trade while holding inside information.

Traded just before PanAust shares popped after acquisition

The charges related to copper producer PanAust Limited (ASX: PNA).

Back in 2015, the company was wholly acquired by Guangdong Rising HK (Holding) Limited and subsequently delisted from the ASX.

But just before this became public knowledge on 30 March 2015, Li is accused of buying 390,000 PanAust contracts for difference (CFDs) over a period of 8 days.

Li also allegedly bought a further 265,000 CFDs under his wife’s name over 5 days.

The CFDs that Li and his wife bought were linked to the share price of PanAust.

After the acquisition was announced, Li and his wife’s trading brought them a windfall of about $343,000.

Long court case could end with 10 years’ jail

The maximum penalty for insider trading is currently 15 years imprisonment. However, at the time of Li’s offences, a maximum of 10 years applied.

Li will face Brisbane District Court again on 28 February for sentencing.

The Australian Securities and Investments Commission originally started its investigations after its surveillance team identified suspicious trading.

The Li case has been through the courts since 2017.

The post Man faces 10 years’ jail for making $343,000 from insider trading appeared first on The Motley Fool Australia.

More reading

• Are these 2 ASX dividend shares buys in February 2022?
• Pilbara Minerals (ASX:PLS) share price races higher after strong lithium prices offset potential guidance downgrade
• Origin (ASX:ORG) share price lifts amid APLNG’s 33% revenue boost
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• Here’s why the Vulcan Energy (ASX:VUL) share price is climbing 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.

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Key points

• Pilbara Minerals had a disappointing quarter for production and shipments
• FY 2022 guidance likely to be downgraded with half year results
• But very strong lithium prices are offsetting this disappointment

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The Pilbara Minerals Ltd (ASX: PLS) share price is starting the week strongly following the release of its second quarter update.

At the time of writing, the lithium miner’s shares are up 4% to $3.35.

What happened during the second quarter?

For the three months ended 31 December, Pilbara Minerals reported production of 83,476 dry metric tonnes (dmt) of spodumene concentrate.

This was down 2.7% quarter on quarter and fell short of the downgraded guidance range of 85,000 to 95,000 dmt given with just 10 days of the quarter remaining on 21 December. Management advised that this was due to the extended outages at both the Ngungaju and Pilgan plants in the latter part of December.

It further explained that the key impacts being experienced relate principally to manning levels for increased contract mining, construction, and improvement projects, as well as delays in sourcing additional labour and equipment for plant shutdowns and repairs. It notes that these issues are being widely experienced across the entire Western Australian resources sector.

During the quarter, Pilbara Minerals shipped 78,679 dmt of spodumene concentrate, which was down 14% quarter on quarter.

In light of the above, management has warned that it is reviewing its FY 2022 guidance for production of 400,000 to 450,000 dmt and shipments of 380,000 to 440,000 dmt.

Finally, in respect to costs, Pilbara Minerals reported a unit operating cost of US$587 per dmt at the Pilgan operation. While this is higher quarter on quarter, it is largely due to higher royalties linked to significantly higher selling prices.

Strong lithium prices

It wasn’t all doom and gloom during the second quarter. One highlight was the sky high prices that Pilbara Minerals is commanding for its lithium. The release explains that the average prices received in the December quarter were in the range of approximately US$1,750 per dmt to US$1,800 per dmt on a CIF China SC 6.0 basis. This was at the top end of its guidance range of US$1,650 to US$1,800 per dmt.

It gets better. Management revealed that indicative pricing for the third quarter under existing offtake contracts is expected to be in the range of US$2,600 to US$3,000 per dmt on a CIF China SC6.0 basis.

Judging by the Pilbara Minerals share price performance today, this news appears to have offset the disappointment of a potential production and shipments downgrade next month.

Further details, including its FY 2022 guidance, will be provided with its half year results next month.

The post Pilbara Minerals (ASX:PLS) share price races higher after strong lithium prices offset potential guidance downgrade appeared first on The Motley Fool Australia.

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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.

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Key points

• The Origin share price opened 0.18% higher this morning at $5.53
• The rise is gaining momentum after the release of the company’s report for the December quarter
• Over the quarter, the company’s integrated gas business was boosted alongside energy commodity prices while its gas sales dropped 17%

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The Origin Energy Ltd (ASX: ORG) share price is trading in the green this morning amid the release of the company’s results for the December quarter.

At the time of writing, the Origin share price is $5.60, 1.27% higher than its previous close.

Let’s look at the highlights of the company’s latest results:

Origin share price rises on $555m of APLNG revenue

• APLNG’s production increased 2% and its revenue boosted 33% quarter-on-quarter
• As of 31 December, Origin has received $555 million from the venture this financial year
• Origin’s electricity sales increased 2% quarter-on-quarter
• Its gas sales volumes dropped 17% on the prior comparable quarter’s

The company’s integrated gas business was boosted last quarter. Australia Pacific LNG (APLNG) – an incorporated joint venture between Origin, ConocoPhillips, and Sinopec – saw its production increase 2% on that of the September quarter.

The venture’s commodity revenue also increased 33% quarter-on-quarter, driven by 3 spot cargos capturing record spot LNG prices and higher realised oil prices. Though, a drop in short-term contract volumes saw its domestic revenue fall last quarter.

APLNG’s year-to-date revenue is also 91% higher than it was at the end of 2020’s December quarter.

Origin received $555 million of cash from APLNG over the 6 months to December.

Origin’s realised gas price last quarter was $13.29 a gigajoule, comprising an average LNG price of US$11.80 per million British thermal units and an average domestic price of $6.33 a gigajoule.

In energy markets news, the company’s electricity sales volume increased 2% on that of the previous comparable quarter.

A 10% increase in business volumes – partly offset by COVID-19 impacts – was weighed down by a 6% drop in retail volumes due to cooler weather and, again, COVID-19.

The average National Energy Market spot electricity price for the quarter was $57.50 per megawatt hour.

That was down from $66.10 per megawatt hour in the prior quarter, but up from $43.80 per megawatt hour in the prior comparable quarter.

Meanwhile, Origin’s gas sales volumes fell 17% on that of the December 2020 quarter. Gas sales to generation also fell 39% quarter-on-quarter.

What else happened in the December quarter?

Last quarter also saw plenty of asset movement from the company.

The Origin share price fell when it announced it’s acquiring WINconnect for $42.2 million post-tax. Purchasing WINconnect is expected to see Origin with another 87,000 customers.

Additionally, APLNG joint venture partner ConocoPhillips purchased a 10% stake in the venture from Origin for $2.21 billion. Origin will continue to be APLNG’s upstream manager.

In exploration news, drilling of the Velkerri 76 S2-1 well – located in the Beetaloo Basin in the Northern Territory – was completed last quarter. Its preliminary results indicate the Velkerri shales are within the wet gas maturity window.

Meanwhile, in the Canning Basin in Western Australia, drilling at the Rafael 1 well indicated liquids-rich gas potential in a conventional reservoir.

What did management say?

Origin CEO Frank Calabria commented on the company’s quarterly results, saying:

Australia Pacific LNG has continued its strong performance and was able to benefit from the substantial increase in oil and spot LNG prices and favourable currency movements, helping to drive a large increase in revenue compared to the prior year.

In Energy Markets, a cooler start to summer and reduced economic activity owing to continued lockdowns in the two most populous states meant the December quarter was subdued. Prices across the National Energy Market were lower in this period, as a consequence of fewer unplanned baseload outages and increased renewable generation.

What’s next?

Those keeping an eye on the Origin share price have plenty to look forward to.

Origin’s acquisition of WINconnect is set to be finalised in the first half of 2022 and the company is expected to drop its results for the first half of financial year 2022 on 17 February.

It’s also analysing core samples from the the Velkerri 76 S2-1 well and is planning to begin a production test at the Rafael 1 well in the current quarter.

Origin share price snapshot

So far, the Origin share price has been gaining in 2022.

The company’s stock is currently trading for 5.33% more than it was at the end of 2021. It has also gained 16.67% since this time last year.

The post Origin (ASX:ORG) share price lifts amid APLNG’s 33% revenue boost appeared first on The Motley Fool Australia.

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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 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.

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