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The Vection Technologies Ltd (ASX: VR1) share price retreated from an intraday high of 14.5 cents to close flat at 13.5 cents today – the same price it opened at this morning. This comes after the tech company announced the launch of an augmented and mixed reality (XR) interface for computer aided design (CAD) software through its 2021 Mindesk suite.

In today’s release, Vection said it will officially launch its Mindesk suite at the world’s biggest tech stage, CES 2021. The annual event brings the biggest names together to display their latest technology. It is being conducted online through the organiser’s media hub this year due to COVID-19.

Mindesk in a nutshell

Mindesk is a Vection subsidiary based in California that develops a real-time 3D design platform for use by designers, architects, engineers and CAD users.

The company enables users to design projects from CAD through a XR interface without the need to export. In addition, users can seamlessly switch their workflow between XR and desktop, editing and collaborating on demand.

New Mindesk 2021 suite

Previously, Mindesk’s Live Link supported the use of CAD software in a virtual reality environment, negating the need for programming skills and time-consuming export and configuration processes.

However, with the latest Mindesk release, the platform now includes Microsoft Hologens 2, Varjo XR1, and Varjo XR3. This new interface lets engineers and designers to place a virtual hologram of their model next to their workstation. The program is operated by mouse and keyboard, or by a 6DOF XR controller.

Developed to meet demanding requirements in the digital work space, Vection said that Mindesk XR application was “a milestone breakthrough”. Users can project the image which will allow them to take note of 3D assemblies, simulations, or point clouds.

One of many potential applications that Mindesk can be integrated within is the automotive industry. Modelling a 3D car in XR can effectively cut significant time in any rework for design concepts, thus bringing the product faster to market.

Management commentary

Vection director and Mindesk subsidiary CEO Gabriele Sorrento, said:

VR has been increasingly accepted by enterprises in the past two years. However, Mixed Reality now offers the opportunity to reach a wider professional audience.

We directed our efforts at breaking down the latest barriers of adoption of VR. The natural blend of mixed reality with existing professional tools and practices makes the transition to the XR not just seamless, but undelayable.

Vection managing director Gianmarco Biagi, added:

We are pleased to participate in the world’s biggest annual consumer electronics show, the CES 2021, presenting the breakthrough integration of XR in the Vection Technologies’ Mindesk software, a pivotal advancement of the company’s strategy around disruptive tools for design and engineering.

As the company progresses its global growth strategy, it continuously strives to develop disruptive technologies to cement a unique software suite, generating value for all stakeholders, toward wider product adoption in a fast-pacing high growth market segment.

More reading

• Why the Vection (ASX:VR1) share price has surged 9% today

Motley Fool contributor Aaron Teboneras 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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If you’re wanting to construct a balanced portfolio, having a few blue chip ASX shares in there could be a smart move.

This is because blue chips tend to be companies that are well-known, long-established, and have strong financial positions. In other words, they are not going anywhere any time soon and should allow investors to make long term investments that benefit from compounding.

With that in mind, listed below are two ASX blue chip shares that come highly rated:

Cochlear Limited (ASX: COH)

The first blue chip to look at is Cochlear. It is one of the world’s leading hearing solutions companies and has delivered strong sales and profit growth over the last decade.

The good news is Cochlear appears well-positioned to continue this trend over the next decade. This is thanks to its strong market position, leading technology, the industry’s high barriers to entry, and its exposure to the ageing populations tailwind.

In respect to the latter, by 2050 there are forecast to be 1.5 billion people over the aged of 65. This will be almost triple the number of over 65s in 2010 and bodes well for demand for its product portfolio.

Analysts at Macquarie are fans of the company. They have been looking into the industry and believe the company is winning market share in the United States. Macquarie has an outperform rating and $241.00 price target on its shares. This compares to the latest Cochlear share price of $182.93.

Goodman Group (ASX: GMG)

Goodman Group is an integrated commercial and industrial property group. It owns, develops, and manages industrial real estate in 17 countries.

Goodman has been growing at a solid rate over the last decade thanks to the diversity of its operations and its exposure to quick growing markets such as ecommerce. This has resulted in strong demand from blue chip customers such as Amazon, Coles Group Ltd (ASX: COL) and Walmart, which appears to have positioned Goodman for sustainable growth over the 2020s.

One broker that is positive on its growth prospects is Morgan Stanley. It has been pleased with Goodman’s development work, high occupancy rates, and the yields it is commanding. In light of this, it has an overweight rating and $20.90 price target on its shares. This compares to the current Goodman share price of $18.07.

More reading

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• 3 ASX shares to buy for 2021 and beyond

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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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The Cobalt Blue Holdings Ltd (ASX: COB) share price has rocketed to a 52-week high today, after the company responded to the ASX regarding its share price movements recently.

In today’s mid-session release, the company denied any knowledge of insider information that might have caused the share price to surge recently, notably a 14% spike on 8 January.

Following the release, the Cobalt Blue share price shot up 42% to 35.5 cents before closing at 34 cents.

Why did the Cobalt Blue share price surge today?

On 8 January, Cobalt Blue received a “please explain” from the ASX after shares in the company jumped almost 14% despite no news being announced.

The company today advised that it was “not aware of any explanation for the price change and increase in volume in the securities of Cobalt Blue, other than as referred to in previous ASX announcements”.

However, the company noted there were a number of factors that could explain investor interest in Cobalt Blue securities.

The company said that cobalt was a critical ingredient for high-performance lithium-ion batteries, which in turn are used globally to power electric vehicles (EV) and energy storage systems (ESS).

As many countries move towards clean energy, more subsidies on EV vehicles are being rolled out. These are significant, effectively subsidising between 20% to 35% of the purchase price of EVs in the European Union, for example – and turning the bloc into the largest global market in EV.

The company also said that the upcoming Biden Clean Energy plan in the United States includes a US$400 billion investment supporting the roll out of 25 million EVs, which will be another tailwind for the company.

In addition, the cobalt market has increased significantly from US$12/lb in April 2020, to more than US$19/lb at this time. It believes the cobalt price is on track to retrace its four-year longer-term average price of US$25/lb.

And finally, Cobalt Blue says that its Broken Hill-based Pilot Plant is on track to operate from February 2021, as already announced to the market on 21 December 2020.

About the Cobalt Blue share price

Before today’s surge, the Cobalt Blue share price has risen by almost 78% in the last 12 months. Including today’s move, the share price has increased 115% in that period.

The Cobalt Blue commands a market valuation of around $61 million.

More reading

• ASX 200 drops 0.9%
• Mesoblast (ASX:MSB) share price soars 14% on clinical trial results
• Fund manager tips 2 booming ASX miners for 2021 uranium bull market
• These 2 ASX healthcare shares popped today
• Ex-COO of ASX giant arrested in Sydney

Motley Fool contributor Eddy Sunarto 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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The S&P/ASX 200 Index (ASX: XJO) fell by almost 0.9% today to 6,697 points.

Here are the highlights from the ASX:

Mesoblast Limited (ASX: MSB)

The Mesoblast share price went up 14% today after giving the market an update.

It announced today additional results from the landmark DREAM-HF randomised controlled phase 3 trial in 537 treated patients with chronic heart failure with reduced left ventricular ejection fraction (HFrEF) who received rexlemestrocel-L or control shame.

Mesoblast explained that a single dose of rexlemestrocel-L resulted in substantial and durable reductions in heart attacks, strokes and cardiac deaths.

The ASX 200 company said that existing therapies have only minimal or no benefit on these endpoints, these notable outcomes may signal a breakthrough in addressing the principal unmet needs in patients with chronic heart failure.

Based on the observed reduction in mortality and morbidity in this phase 3 trial, Mesoblast intends to meet with the FDA to discuss a potential approval pathway.

Magellan Financial Group Ltd (ASX: MFG)

The Magellan share price went up 1.4% after updating the market with its funds under management (FUM) for December 2020.

The fund manager revealed that its total FUM fell from $103 billion to $101.4 billion. The main part of the decline was a $2 billion decline of FUM in the global equities strategy.

Magellan said that, in December, it experienced net inflows of $579 million, included net retail inflows of $327 million and net institutional inflows of $252 million.

The ASX 200 fund manager reported that it is entitled to performance fees of approximately $12 million for the six months ended 31 December 2020. It stated that performance fees may fluctuate significantly from period to period.

Average FUM for the six months ended 31 December 2020 was almost $101 billion, this compares to average FUM of $92.8 billion for the six months ending 31 December 2019.

Magellan stated that the average exchange rate between the Aussie dollar and the US dollar for the six months ended 31 December 2020 was 0.7234, compared to 0.6848 for the six months ending 31 December 2019.

Shaver Shop Group Ltd (ASX: SSG)

The Shaver Shop share price went up 11.3% today after the grooming business gave a trading update and profit guidance for the first half of FY21.

Shaver Shop said that the sales for the second quarter of FY21 increased by 12.4% in total and 13.7% growth of like for like sales. Online sales growth was 64.7% in the second quarter, and this was the primary driver of sales.

FY21 first half online sales grew 102% helped like for sales grow by 17.3% and total sales went up 15.2%. Online sales represented 30.3% of total sales in the first half.

The gross profit margin is expected to increase by more than 200 basis points across the first half of FY21. The company tried to balance volume growth and profit margins.

FY21 first half net profit is expected to be between $13.5 million to $14 million, compared to $7.6 million in the prior corresponding period.

Shaver Shop managing director and CEO Cameron Fox said: “Our teams across Australia and New Zealand have remained focused and resilient and have consistently delivered exceptional customer service during an incredibly uncertain time. With in-store sales conversion more than 50% and average transaction values increasing more than 10%, our store teams were able to more than offset the 20% plus decline in outside foot traffic we saw in December.

“We expect our first half profit to increase 75% to 85% when we release our results in February and we are on track to deliver another record profit for the full year.”

More reading

• Mesoblast (ASX:MSB) share price soars 14% on clinical trial results
• Why the QBE (ASX:QBE) share price is in focus today
• ASX 200 down 0.4%: Afterpay tumbles, bank shares lower, gold miners crash
• The latest ASX “buy” recommendations from top brokers
• Why the SelfWealth (ASX:SWF) share price is on the rise this morning

Motley Fool contributor Tristan Harrison 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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The Mesoblast Limited (ASX: MSB) share price rocketed on news that the company’s drug, rexlemestrocel-L, is showing promising signs.

The Mesoblast share price closed today’s trade 14.29% higher at $2.56 per share. Notably, today is the highest its shares have been since the failure of remestemcel-L in treating COVID-19 patients was announced in late December.

Why is the Mesoblast share price soaring?

Mesoblast announced that a single dose of its drug rexlemestrocel-L provides a reduction in heart attacks, strokes and cardiac death in patients with chronic heart failure.

The results come from its landmark, randomised controlled phase 3 trial with 537 patients. Of the patients, who all had chronic heart failure, some received rexlemestrocel-L and others received a control sham. The study found that a single dose of the drug resulted in a substantial and durable reduction in heart attacks, strokes, and cardiac deaths. The patients were monitored for 30 months after the dose was administered.

Since the existing therapies have very minimal benefit on these same endpoints, Mesoblast claims that these results may signal a breakthrough in addressing certain unmet needs with patients who have chronic heart failure.

Heart attacks and strokes were reduced by 60% from a single dose, while incidence of death from rexlemestrocel-L was also reduced by the same amount. Across the board the drug reduced all 3 outcomes of death by 30%.

This comes as a sharp turnaround from the news Mesoblast released on 15 December that there was no reduction in the recurrent non-fatal decompensated heart failure events from the drug, which caused its share price to fall by 15%.

Chronic heart failure affects 6.5 million people in the US and 26 million globally, with those numbers increasing in prevalence and incidence every year.

About the Mesoblast share price

The Mesoblast share price was particularly volatile in 2020, rising as high as $5.70 and dropping as low as $1.02. Nonetheless the recent news has pushed shares in the company higher, resulting in a 1-year return of 11.79%.

More reading

• ASX 200 drops 0.9%
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• Mesoblast (ASX:MSB) share price could be facing more pressure in 2021
• Do ASX mining companies carry the Australian share market?
• These are the 10 most shorted shares on the ASX

Motley Fool contributor Daniel Ewing 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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ASX uranium shares are once again becoming a hot topic.

Somewhat ironically, investing in uranium miners is controversial in Australia. I say that because Australia is believed to have the world’s largest uranium resources. At least for resources that are recoverable at a reasonable cost.

Yet with no nuclear power generation of its own, and no nuclear-powered naval vessels, many Aussie investors view uranium as a dangerous energy source best relegated to the last century.

Now there are good reasons to be cautious around uranium. It can, after all, be enriched for use in nuclear missiles. And the waste remains radioactive for many centuries.  

On the flipside, however, uranium produces power without any carbon emissions. And in a world intent on de-carbonising without turning off the power, some analysts are forecasting a fresh bull run for uranium.

The case for a 2021 uranium bull market

Ben Cleary is a portfolio manager at Tribeca Investment Partners. Cleary has a decidedly bullish outlook for many hard commodities this year. And, as the Australian Financial Review reports, Cleary believes uranium could enter a bull market in 2021.

According to Cleary:

Things like uranium, which have no carbon footprint, are starting to get some recognition. Oil can double, uranium can go up five times. It’s that structural demand and supply mismatch – last year, for example, there was 200 million pounds of [uranium] consumption and 100 million pounds was mined.

The difference between what was consumed and what was mined was made up from existing stockpiles. But those stockpiles will only last so long if demand remains in excess of new supply. Economics 101 dictates that any prolonged period of excess demand without a matching increase in supply will drive prices higher.

Cleary tipped 2 All Ordinaries Index (ASX: XAO) uranium miners he believes are well-placed to benefit from an increase in uranium prices: Bannerman Resources Limited (ASX: BMN) and Boss Energy Ltd (ASX: BOE).

Boss Energy and Bannerman Resources share price and company snapshots

Boss Energy (formerly Boss Resources) holds interests in the Honeymoon uranium project located in South Australia.

The Boss Energy share price fell hard today, down 9.0%. That leaves it flat for the 2021 calendar year. Over the past 12 months, though, Boss Energy shares have gained 100%.

Bannerman Resources focuses on the development of large open-pit uranium operations. The majority of its interest are in the Etango Uranium Project in Namibia, Africa.

The Bannerman Resources share price also dropped today, down 7.7%. Shares are still well into the green for the year though, up 20% since 4 January. Over the past 12 months Bannerman Resources shares have gained a whopping 200%.

More reading

• These 2 ASX healthcare shares popped today
• Ex-COO of ASX giant arrested in Sydney
• It’s electrifying: Vulcan Energy (ASX:VUL) share price up 23% today
• Genesis Energy (ASX:GNE) share price drops 5% today after closing at 52-week high last week
• The Marley Spoon (ASX:MMM) share price is up over 700% in 12 months

Motley Fool contributor Bernd Struben 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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The All Ordinaries Index (ASX: XAO) slid down close to a percent today, with the healthcare sector doing the same. At the time of writing, the All Ords is down 0.96% and the healthcare sector has dipped 1.2%.

Regardless of this lacklustre performance, these 2 ASX healthcare shares are having a pretty good day. 

Anteris Technologies Ltd (ASX: AVR)

The Anteris share price has surged 18.60% today to reach $5.10 per share. This gain comes after a tough year, with the Anteris share price dropping more than 62% over the past 12 months.

The company’s mission is to create the world’s most durable heart valve. While no significant news hit the wires today, the company continues to steadily progress its heart valve technology.

In March 2020, Anteris announced the first implantation of its ADAPT-treated single-piece 3D aortic valve in a patient with aortic stenosis.

At the start of this year, the company confirmed that it had entered into a short-term facility for a $1,220,000 advance, based on its forecasted research & development (R&D) tax incentive. Anteris followed this statement up two days later announcing an additional $20 million in secured funding.

According to Anteris, the company continues to focus on delivering “next generation technologies that help healthcare professionals create life-changing outcomes for patients.”

CleanSpace Holdings Ltd (ASX: CSX)

The CleanSpace Holdings share price is currently up by 7.29%, trading at $7.51 at the time of writing. The company engages in the design and manufacturing of respiratory protection equipment (RPE) for healthcare and industrial employers internationally.

The purpose of RPE is to protect people from inhaling hazardous substances in the air. The Sydney-based company was founded by a team of biomedical engineers in 2009. Products sold by CleanSpace include the CleanSpace Halo for the healthcare market and the CleanSpace2, CleanSpace Ultra and CleanSpace Ex designed for industrial markets. 

While it’s been a rocky ride over the previous 12-month period, the CleanSpace share price has just managed to inch into the green, returning 0.67% over the past year.

In its most recent trading update, CleanSpace upgraded its first half FY21 revenue expectations to be in the range of $39 million–$41 million for the six months ended 31 December 2020.

More reading

• 2 more small cap ASX shares to watch in 2021
• Why the CleanSpace (ASX:CSX) share price is climbing today

Motley Fool contributor Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia has recommended CleanSpace Holdings 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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Former Cimic Group Ltd (ASX: CIM) chief operating officer David Savage has been arrested as he exited hotel quarantine in Sydney on Monday.

Australian Federal Police officers detained the 60-year-old over allegations he was involved in a major bribery scandal with Iraqi government officials back when Cimic was called Leighton Holdings.

Savage will face Sydney Central Local Court later on Monday, facing two charges of knowingly providing misleading information.

The high-flying executive was living in France but returned to Australia on 27 December, when a border alert was triggered.

Like all overseas arrivals, he went into mandatory COVID-19 quarantine in a Sydney hotel. When the 2-week period was complete on Monday, police made an immediate arrest.

Another ex-Cimic executive, Russell Waugh, was arrested in November over the same scandal.

The arrests come after a complicated 9-year investigation by the Federal Police, which uncovered about US$77.6 million of “suspicious payments” made to Iraqi Ministry of Oil and the South Oil Company of Iraq officials.

Leighton at the time was trying to win two contracts worth US$1.46 billion.

The police were tipped off in November 2011 about the allegedly criminal payments.

Most senior execs ever arrested for foreign bribery

Savage and Waugh, according to The Sydney Morning Herald, are the most senior executives from an ASX-listed business to be charged with foreign bribery violations since the law came into being in 1999. 

The AFP enquiry resulted in more than 2 million documents seized and harvested evidence from 10 countries.

AFP deputy commissioner Ian McCartney said back in November his team had shown “outstanding resilience over the past 9 years”.

“They persevered through the painstaking process of piecing this jigsaw together from facts and allegations of alleged corruption that reached internationally, to a level that allowed us to bring this before the court in Australia.”

AFP did not rule out further arrests. A third former Cimic executive, Peter Cox, is also reportedly sought by police but believed to be living in Asia.

Cimic announced to the ASX back in November that it “continues to cooperate with all official investigations”.

The Cimic share price is down 1.6% to $25.18 at the time of writing.

More reading

• Cimic (ASX:CIM) share price slides lower after new CFO announced
• ASX 200 drops 1.4%
• Cimic (ASX:CIM) share price wobbles on $2.2 billion sale news
• ASX 200 down 0.6%: Flight Centre sinks, big four banks lower, Ramelius jumps
• Why the CIMIC (ASX:CIM) share price is pushing higher

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The Vulcan Energy Resources Ltd (ASX: VUL) share price rocketed 23.51% today. Shares are now in a trading halt pending a further announcement.

Vulcan’s share price has risen by 2,924% over the past 12 months, a no doubt exhilarating ride for Vulcan shareholders. A steady stream of announcements regarding the company’s European lithium project has largely been the driver for the gains.

The road so far for Vulcan Energy 

Early site investigations

Vulcan entered 2020 with the largest Joint Ore Reserves Committee (JORC)-compliant lithium resource in Europe. From there, the company got underway with building an experienced team and conducting studies of the resource.

On 21 February 2020, Vulcan indicated that scoping studies confirmed the potential for a combined lithium and renewable energy production project – enabling a net-zero carbon footprint.

For the following few months, the company went on an Australian virtual roadshow. While doing so, it continued its pre-feasibility studies and raised $4.8 million to facilitate further development.

July delivered two expert chemical and mechanical engineers to the Zero Carbon Lithium team.

In early August, the company announced that it had completed direct lithium extraction (DLE) tests. The DLE results from the Upper Rhine Valley geothermal brine showed lithium recovery rates in excess of 90%.

Experienced appointments to Vulcan

On 26 August 2020, Vulcan announced that Dr Kathrina Gerber would bring her extensive lithium-ion battery expertise to its executive team as project manager.

Shortly after in September, it was announced that ex-Tesla Inc (NASDAQ: TSLA) director Jochen Rudat would join Vulcan. A former direct report to Elon Mush, Mr Rudat was integral in the launch of Tesla’s Models S, 3, X, and Roadster in the Central European region. 

Mr Rudat’s role will be to explore offtake partnerships in the electric vehicle and battery sector in Europe.

Regulatory changes

More recently, Vulcan updated the market to regulatory propositions in Germany, and Europe more broadly, that are expected to be advantageous to the company. Germany’s Amended Renewable Energy Sources Act will reduce the decrease in the rate for prices on geothermal energy fed into the grid.

Additionally, the European Commission proposed a maximum carbon footprint threshold that manufacturers would need to comply with.

Today, the company is in a trading halt, pending an announcement in relation to a pre-feasibility study for its Zero Carbon Lithium project.

What next?

Vulcan shares will remain in the trading halt until the earlier of the commencement of normal trading on Wednesday 13 January 2020, or until the release of the company’s announcement.

Based on its share price at the time of the trading halt coming into effect, Vulcan commands a market capitalisation of $398.66 million.

More reading

• 2 ASX shares that ran over 1,500% in 2020
• These 6 ASX companies just started measuring ESG
• The Vulcan (ASX:VUL) share price just hit an all-time high

Motley Fool contributor Mitchell Lawler 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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The Genesis Energy Ltd (ASX: GNE) share price has dropped almost 5% to $3.50 today, after closing last week’s trading at a 52-week high of $3.68.

The Genesis Energy share price is falling today amid a broader fall in ASX energy shares. Shares in Contact Energy Limited (ASX: CEN) fell by 7%, while the Energy Resources of Australia Limited (ASX: ERA) share price also dropped 6.5% today.

Let’s take a look at what’s been driving the Genesis Energy share price in the last 6 months.

Solid FY20 results

The company’s share price has been riding on the back of solid FY20 results, in which it reported net profit after tax (NPAT) of $46 million. This was despite challenging market conditions due to the coronavirus pandemic.

Genesis followed up with another solid update for the first quarter of FY21 in October, when it reported 3.4% increase on its retails sales versus prior corresponding period.

As a result, the Genesis share price has been making grounds in the last 6 months, rising by 30% in that period.

Headwinds ahead

Genesis advised that longer term earnings faced material headwinds as depletion of its Kupe oil and gas field accelerates. Kupe currently contributes about a quarter of group earnings before interest, tax, depreciation, and ammortisation (EBITDA).

Genesis owns a 46% share in the Kupe gas field located in the Taranaki Basin in New Zealand. Kupe provides the company with a reliable supply of gas to its thermal power plants, and underpins its dual-fuel (electricity and gas) offering to retail customers.

In the company’s annual report, Genesis advised that its earnings from Kupe could end within 10-15 years, as resources in the field begin to deplete. As such, there is a material risk to Genenis’ earnings and cash flow over the longer term. To counter this, the company said it will embark on new oil and gas discoveries.

In November, the company announced that it was undergoing a strategic review on Kupe, and an announcement is forthcoming at some point mid-2021. 

Brief take on Genesis Energy

Genesis generates around 17% of New Zealand’s electricity from its thermal and hydro power stations, and commands 26% of the Kiwi retail electricity market.

New Zealand is unique, with 80% of power coming from unsubsidised renewable energy as the country is blessed with good hydrological, geothermal and wind resources – combined with a small population.

The country’s natural blessings could become a double-edged sword for the company, however. According to its annual report, Genesis’s earnings were exposed to the ups and downs in rainfall levels. This is because its hydro-generator provides it with low-cost generation during times when there is sufficient rainfall, and vice versa when the weather is relatively dry.

About the Genesis Energy share price

The Genesis Energy share price has risen by 15% over the last 12 months, and 30% in the last 6 months, as mentioned.

The company commands a market cap of $3.84 billion.

More reading

• ASX company stops Kakadu uranium production
• The Energy Resources (ASX:ERA) share price is falling. Here’s why.
• ASX 200 rose 1.6%
• ASX 200 drops 1.1%
• Here’s how ASX renewable energy shares have performed in 2020

Motley Fool contributor Eddy Sunarto 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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