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The Oil Search Limited (ASX: OSH) share price is edging higher today after the company released its interim result for the half year to 30 June 2020. At the time of writing, the Oil Search share price had climbed 2.67% higher to $3.08. 

What was in the announcement?

Oil Search announced that it produced 14.7 million barrels of oil in the first half of 2020. According to the company, this was the best production by Oil Search since it was affected by an earthquake in 2018.

Production costs in the first half of 2020 were US$10.38 per barrel, production costs were down 20% compared to the first half of 2019.

Oil Search posted a net loss after tax of US$266 million in the half year to 30 June 2020. This came as the company experienced a US$151 million drop in revenue, which Oil Search stated reflected a 45% fall in its average realised oil price and a 15% fall in its realised gas and liquid natural gas prices. The company also had higher exploration expenses as a result of unsuccessful Gobe Footwall well and Kuukpick seismic acquisition costs. The company’s profit was also affected by a non-cash impairment of US$260 million. 

Oil Search had a core profit after tax, which excluded asset impairments of US$25 million in the first half of 2020.

According to Oil Search, its balance sheet was strengthened during the half and the company’s liquidity increased to US$1.67 billion. The company had net debt of US$2.33 billion at 30 June 2020. 

 Oil Search released production guidance of 27.5 million to 29.5 million barrels of oil in 2020.

About the Oil Search share price

Oil Search is an oil and gas exploration and development company in Papua New Guinea. It was founded in 1929 and is listed on the ASX and the Port Moresby Stock Exchange.

In April, Oil Search raised US$700 million via an institutional placement and an entitlement offer to retail shareholders. The shares were issued at a price of $2.10 per share.

The Oil Search share price is up 70.17% from its 52-week low of $1.81, however, it is down 56.44% since the beginning of the year. The Oil Search share price is down 50.96% since this time last year.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The financial impact of coronavirus lockdowns on the Scentre Group (ASX: SCG) was highlighted in the Sydney Morning Herald today. The Scentre Group share price is up almost 4.5% at the time of writing today.

The real estate investment trust (REIT) saw a 46% drop in funds from operations (FFO) compared to the previous corresponding period in 2019. In addition, the company reported a statutory loss of $3.613 billion. This was due to the requirement for the group to record reductions in asset value in the company’s profit and loss statement. 

Scentre Group used to be the domestic shopping centre assets of Westfield Corporation. It currently owns 42 shopping centres, or as the company refers to them, “living centres”, across Australia.  The COVID-19 lockdowns – and the government’s accompanying mandatory Commercial Tenancies Code of Conduct – have impacted the company since late March. 

Activities during lockdown

The Scentre Group has accelerated strategic initiatives to improve engagement with its customers. These include Westfield Direct, a drive-through click and collect service for Westfield retailers with 14,000 products available from 590 retailers. The company has served 10,000 orders so far. 

Westfield Plus is the other initiative. It’s an app-based membership program, now with more than 500,000 members. This initiative is designed to drive value for customers by removing friction, personalising communications and rewarding engaged members with exclusive benefits.

The Scentre Group share price reflected the dip that hit stores trading during April and May of this year.

In Australia, this was down to 46% and 44% respectively. In New Zealand it fell to 2% and 3 % respectively. Accordingly, the company saw a drop in gross rent cash collections to 28% in May and 35% in April.

However, the Scentre Group has experienced a V-shaped recovery with traffic returning to 80%, excluding Victoria, compared with the previous corresponding period (pcp).

The company has a level of liquidity of $4.4 billion in cash and undrawn debt equivalents. It is geared to 38.4% and has a weighted average debt maturity of 4.8 years. 

What management says

Scentre Group CEO Peter Allen praised the efforts of the management and staff.

“At the onset of the pandemic, we acted quickly to secure additional funding, ensuring we are in a strong financial position to see the group through and beyond the volatile period …,” he said.

Mr Allen said the Scentre Group had supported retail partners throughout this period on a case-by-case basis… without receiving financial assistance from government.

He said: “The shopping centre industry has provided over $1.6 billion of support for retailers during the pandemic. Our industry is unique in that it has provided, and self-funded, a level of financial support beyond any other industry as well as most government pandemic support packages…”

Foolish Takeaway

The Scentre Group reported a return to 82% pcp of gross cash rent collections in July of this year. Moreover, the REIT’s 42 shopping centres are strategically located in dense population areas with more than 16 million people living within a 30-minute vicinity. The ability of the company to produce a cash surplus in such conditions is  testament to the resilient nature of its portfolio.

The company has declined to provide guidance on earnings or dividends at this stage. It is currently selling at a price to earnings (P/E) ratio of 9.09 and has a trailing 12-month dividend yield of 9.51%, even though the current dividend has not been announced. The Scentre Group share price is 4.46% higher today and is currently trading at $2.11.

More reading

• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• 2 ASX 200 bargains to buy this week
• Fortescue and 2 more ASX 200 shares to watch this week
• 3 dirt cheap ASX real estate shares
• Are ASX retail shares buys right now?

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Forget the political wrangling with China.

Put aside the still myriad unresolved issues with the United Kingdom’s departure from the European Union.

And Kim Jong-who now?

With the world entering its 7th month of pandemic-fuelled strife, trade wars, Brexit, and nuclear armed rogue nations are off the menu. All eyes are fixated on effective treatments and the eventual silver bullet vaccine to slay our microscopic foe, COVID-19.

Aside from the terrible mounting death toll, the virus has hamstrung businesses, households and governments across the globe since March.

On a national level, economic growth (GDP) is slowing in almost every nation, and GDP is actually shrinking in many. With some notable exceptions — largely in the technology and health sectors — company earnings have taken a big hit from the social distancing and lockdown measures put in place to slow the virus’ spread. Unemployment is up sharply, income growth remains elusive, and debts are piling up to levels that may take decades to repay.

But in this fight against 7.8 billion humans armed with the latest in 21st century technology and accumulated knowledge, the smart money is increasingly betting against the coronavirus.

Advantage humans

Over in the US, Allied BioScience is opening a new front against the virus in the form of its product, SurfaceWise2. Catchy name aside, it’s applied by electrostatic spray to create a protective invisible layer that kills viruses. It reportedly kills COVID-19 on surfaces for a period of 90 days.

Yesterday (overnight Aussie time) Allied BioScience announced that the US Environmental Protection Agency (EPA) had given Texas-based companies a waiver to use SurfaceWise2.

American Airlines Group Inc was quick to jump on the waiver. In its announcement yesterday, American  Airlines said it will be the first airline to use SurfaceWise2 as its electrostatic spraying solution:

In the coming months, American will begin using SurfaceWise2 for electrostatic spraying on surfaces inside its aircraft with plans to use the product throughout its entire fleet, including those in its American Eagle regional partners.

The American Airlines’ share price closed up 10.5% yesterday. And the share price is up another 2.5% in after-hours trading. Though shares are still down 56% from this year’s 12 February peak.

Allied BioScience shares trade on the US over-the-counter (OTC) markets. Shares on OTC markets aren’t listed on a centralised exchange, but rather traded via broker-dealer networks. The Allied BioScience share price gained 31.9% on yesterday’s announcement.

The final answer could usher in a share market boom

Stopping the coronavirus from lingering on surfaces is a big step towards slowing its spread.

But the final answer lies in effective treatments and a mass-produced vaccine to return travel, work and life to normal.

On that front, hundreds of leading companies are involved in developing a vaccine. And powerhouse nations like China, Russia, the UK and the United States are pushing ahead with human trials.

Over the weekend the US Food and Drug Administration (FDA) announced that it was working to increase access to a promising new treatment that employs blood plasma from people who have recovered from the virus. And US President Donald Trump is reportedly considering using his clout to fast track an experimental vaccine. Hoping, no doubt, for significant success before the November presidential elections.

With an eye on the prize, investor sentiment is driving new share market gains.

Technology share prices hit new records

While most share prices are on the upswing, technology shares continue to lead the charge.

Over in the US the NASDAQ-100 Index (NASDAQ: NDX) closed up 0.6% for another new record high. Year-to-date, the index of the biggest 100 US-listed technology related stocks is up 31%. Since the March low, it’s gained 66.2%.

But it’s not just US technology shares that are soaring.

Here in Australia, the share price of buy now, pay later (BNPL) darling Afterpay Ltd (ASX: APT) is rocketing again today, up 6.5% in late morning trade. That puts Afterpay’s share price gains at 28.4% so far in August, and the share price is up a smashing 188% since 2 January.

Afterpay received a welcome boost in today’s trading (as if it needed one) after broker Morgan Stanley raised its target for the BNPL leader to $106 per share. That’s more than 20% above Afterpay’s current share price of $88.05.

BNPL rival Zip Co Ltd (ASX: Z1P) is also trading at new record highs. The Zip share price is up 3.9% in intraday trading and up more than 118% year-to-date.

Joining them in record high territory is electronics retailing giant JB Hi-Fi Limited (ASX: JBH). JB Hi-Fi’s share price is up a more sedate 0.5% in today’s trading and up 35.5% in so far in 2020.

Though these stocks are leading the way higher, the performance of the All Ordinaries Index (ASX: XAO) shows that that rising investor sentiment spreads well beyond the favoured technology shares.

The All Ords is still down 7.0% year-to-date. But it’s in the green again today, up 0.5%, with a remarkable 38.8% rebound since the 23 March low.

If and when a vaccine eventuates, and global economies begin to emerge from their cocoons, the best placed companies could make the ASX share price gains of the last few months pale in comparison.

More reading

• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• Why the Xero share price can crack $100 per share in 2020
• 3 ASX shares that could give investors a stock split in 2020
• ASX 200 rises 0.3%, Afterpay up on European plans
• Is this ASX 200 market too greedy right now?

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is on form again on Tuesday and has followed the lead of U.S. markets by pushing notably higher. At the time of writing the index is up 0.6% to 6,166 points.

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

The Blackmores Limited (ASX: BKL) share price is down almost 5% to $72.27 after its full year result disappointed the market. In FY 2020 the health supplements company posted a 3% decline in revenue to $568 million and a 66% drop in net profit after tax to $18.1 million. And while the company is forecasting profit growth in FY 2021, management warned that it would come predominantly in the second half. It appears as though investors are keeping their powder dry until there is evidence of this return to growth.

The MNF Group Ltd (ASX: MNF) share price has dropped 14% lower to $5.32. This is despite the leading voice communications software provider delivering a record profit result in FY 2020. For the 12 months ended 30 June 2020, MNF’s revenue increased 7% to $230.9 million and its net profit after tax lifted 20% to $11.95 million. Management’s cautious outlook for FY 2021 appears to be weighing on its shares today.

The Nanosonics Ltd (ASX: NAN) share price has tumbled 11% lower to $6.11. This follows the release of the infection control specialist’s full year results this morning. Although Nanosonics recorded a 19% increase in revenue to $100.1 million, its net profit after tax tumbled 26% lower to $10.1 million. But perhaps the biggest disappointment was news that the launch of a new product was likely to be delayed until FY 2022.

The Seven West Media Ltd (ASX: SWM) share price has crashed 18% lower to 12.7 cents. Investors have been selling the media company’s shares following the release of a disappointing full year result. Due to the pandemic severely impacting advertising markets, Seven West Media reported a 14% decline in revenue from continuing operations. Things were even worse for its earnings, with earnings before interest and tax falling 54% to $98.7 million.

More reading

• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
• Here’s why the Nanosonics share price is taking a steep dive today
• MNF share price sinks lower despite record profit result
• Seven West Media share price on watch following FY 2020 earnings release
• Blackmores share price in focus after sharp profit decline in FY 2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited, MNF Group Limited, and Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Starpharma Holdings Limited (ASX: SPL) share price bolted more than 14% in early trade today. The positive price action follows an announcement from the company regarding a nasal spray for COVID-19.

Details on Starpharma’s nasal spray

Earlier today, Starpharma provided the market with an update on its SPL7013 nasal spray, which is currently being repurposed for treatment of COVID-19.

In the update, Starpharma announced progress with the development, regulation and manufacturing activities of its repurposed SPL7103 nasal spray. The company informed investors that it has identified a manufacturer and undertaken a pilot manufacture.

Starpharma also highlighted promising results from the antiviral testing for SPL7013. The company noted that testing had shown that SPL7013 has potent antiviral effect against COVID-19. The company provided supporting data which elaborated on the mechanism of action of SPL7013 in acting early in the viral replication cycle of COVID-19.

The data also indicated that potent activity of SPL7013 against COVID-19 was evident before and after exposure to the virus. Starpharma highlighted that the company has compiled regulatory documentation in preparation for submission. The company also noted that a regulatory pathway has been confirmed for a number of important markets including Europe.

Starpharma’s management elaborated the important role that SPL7013 can play in fighting the COVID-19 pandemic. The company conceded that although a vaccine against the virus is most important, auxiliary products will help reduce the risk of transmission and exposure. Starpharma also noted that a publication of the antiviral data has been submitted to peer reviewed scientific journal.

More details on Starpharma

Starpharma is an Australian based biopharmaceutical company that develops products for pharmaceutical, life science and other applications. The company’s underlying technology is built around a type of synthetic nanoscale polymer called dendrimers. Starpharma has 2 core development programs based on dendrimers: VivaGel and DEP drug delivery.

Earlier this year Starpharma announced that the active component of its VivaGel product, SPL7013 had shown significant activity against COVID-19. Since VivaGel is already approved in Europe, Canada, Australia and other countries, Starpharam believes that the company can fast-track development for products that target COVID-19.

Foolish takeaway

At the time of writing the Starpharma share price is trading more than 10% higher for the day at around $1.16. Shares in the company have been sold-down slightly after hitting an intra-day high of $1.22 earlier.

More reading

• The Starpharma share price jumps on new partnership deal
• Why Altium, Beach, JB Hi-Fi, & Starpharma shares are charging higher

Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Tuesday the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain thanks largely to gains in the banking sector. The benchmark index is currently up 0.7% to 6,170.8 points.

Here’s what has been happening:

Big four banks charge higher.

The big four banks are all on form on Tuesday and are helping to drive the benchmark index higher. The best performer in the group is the National Australia Bank Ltd (ASX: NAB) share price with a 4.5% gain. This could be down to bargain hunters believing the banks have been oversold or optimism over a potential coronavirus vaccine. The Trump administration is reportedly going to fast track an experimental vaccine from the UK.

Blackmores disappoints.

The Blackmores Limited (ASX: BKL) share price is sinking lower on Tuesday after its full year result disappointed the market. In FY 2020 the health supplements company posted a 3% decline in revenue to $568 million and a 66% reduction in net profit after tax to $18.1 million. Management advised that it expects to deliver profit growth in FY 2021 but warned that its growth would come predominantly from the second half. Investors may be waiting for proof of this before believing it.

Xero acquisition.

The Xero Limited (ASX: XRO) share price broke through the $100 mark this morning and hit a record high of $101.24. Investors were buying the cloud-based business and accounting company’s shares after it announced the $80 million acquisition of Waddle. It is a cloud-based lending platform that helps small businesses access capital through invoice financing. Management believes the acquisition aligns with its strategy to grow the small business platform and to address critical small business financial needs.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Tuesday has been the Bingo Industries Ltd (ASX: BIN) share price with a 14% gain. This follows the release of a full year result which revealed a 40.8% lift in underlying EBITDA to $152.1 million. The worst performer on the index is the Nanosonics Ltd (ASX: NAN) share price with a 9% decline. This morning it released its full year results and disappointingly advised that its new product launch was likely to be delayed until FY 2022.

More reading

• Why Blackmores, MNF Group, Nanosonics, & Seven West Media are dropping lower
• Here’s why the Nanosonics share price is taking a steep dive today
• Why Afterpay, BINGO, Scentre, & Westpac shares are charging higher
• Hub24 share price tumbles despite a big profit and dividend increase
• Xero share price hits record high following $80 million Waddle acquisition

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 Xero. The Motley Fool Australia owns shares of and has recommended Blackmores Limited and Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Nanosonics Ltd (ASX: NAN) share price is under pressure today following the release of the company’s full-year results for the financial year ending 30 June 2020 (FY20).

At the time of writing, the Nanosonics share price is trading at $6.28, down 8.59% from yesterday’s market close. At ringing bell, the Nanosonics share price plummeted by more than 17% to as low as $5.86 per share.

FY20 highlights

The medical device company reported a mixed result for its full-year earnings. Nanosonics recorded $100.1 million in revenue, up 19% on the prior corresponding period. Across all key geographical segments, revenue in North America was its strongest market, up 18% to $90.2 million, making up more than 90% of the entire group revenue.

Net profit after tax stood at $10.1 million, a decline of 26% largely due to Q4 impacts.

Earnings before interest and tax (EBIT) came in at $11.6 million, a 25% fall from FY19 results.

Nanosonics’ cash flow for the year ending was at $20.9 million, up from $2.6 million driven by increased customer receipts. The company recorded a strong net cash position of $91.8 million with negligible debt.

No dividend was declared for the full year. The company advised it will focus its efforts on pursing and investing in opportunities due to the increasing global spotlight on infection prevention.

COVID-19 impact

Nanosonics advised it saw a COVID-19-related impact on its Q4 FY20 sales, with revenue only increasing by 1% compared to the prior corresponding period. The first three quarters recorded a 26% increase.

Installed base growth also fell 46% during Q4, but was up 13% for the entire FY20.

While the COVID-19 pandemic has reinforced the importance of infection prevention, Nanosonics also outlined its business strategy to invest in product expansion into new markets, with over $15.6 million directed across a number of projects.

Business outlook

Nanosonics did not provide any guidance in respect to FY21, due to the ongoing uncertainties associated with COVID-19. The emergence of future waves and potential further lockdowns are expected to complicate financial forecasts.

The company’s strategic priorities continue to be focused on establishing its trophon product to be installed across all regions. However, it is anticipated that trophon capital sales will be impacted in the first half of the year by limited hospital access, particularly in North America.

A flow-on effect on the capital equipment requirements in Nanosonics’ main North America distribution partner, GE Healthcare, may also reduce sales of trophon.

Thus far, global sales of consumables to end customers have regained approximately 80% of Q1 to Q3 levels. It is predicted that the volume of ultrasound procedures and consumable sales will continue to recover later in the year.

Total operating expenses for FY21 are expected to be in the range of $75–$78 million.

Management commentary

Commenting on Nanosonics’ FY20 results, CEO and president Michael Kavanagh said:

The 2020 financial year has been another year of significant achievement and progress with many important milestones achieved against our strategic growth agenda. Excellent growth momentum was experienced in the first three quarters of the year demonstrating the underlying strong fundamentals for the business.

As expected, the implications of the COVID-19 pandemic impacted the momentum primarily in Q4 which saw the planned adoption of trophon being delayed in hospitals as their focus turned to the management of COVID-19.

Looking forward, he added:

The COVID-19 pandemic has reinforced the importance of infection prevention and given increased prominence to this important topic, not just amongst the medical community but in all communities. The Company considers that this can only be positive for the longer term fundamentals of the business.

About the Nanosonics share price

The Nanosonics share price reached a low of $4.01 in March, a discount of 36% on today’s price. Today, the Nanosonics share price is down by 1% since the start of 2020.

More reading

• Why Blackmores, MNF Group, Nanosonics, & Seven West Media are dropping lower
• ASX 200 up 0.7%: Big four banks storm higher, Blackmores disappoints, Xero acquisition
• 2 ASX 200 healthcare shares to watch in August
• 3 ASX shares that could grow rapidly during the 2020s
• 5 quality ASX shares to buy in August

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is on course to record a strong gain. At the time of writing the benchmark index is up 0.6% to 6,168 points.

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

The Afterpay Ltd (ASX: APT) share price is up a sizeable 7% to $88.70. Investors have been buying the payments company’s shares after it was the subject of a positive broker note out of Morgan Stanley. According to the note, the broker has retained its overweight rating and lifted the price target on its shares to $106.00 following its expansion into mainland Europe. It also adjusted its estimates higher to reflect stronger than expected app downloads in the United States and better credit quality management.

The Bingo Industries Ltd (ASX: BIN) share price has jumped 14% higher to $2.46 following its full year results release. The waste management company overcame challenging trading conditions to deliver a 21% increase in revenue to $486.7 million and a 40.8% lift in underlying EBITDA to $152.1 million. A full year contribution from its recently acquired Dial a Dump business played a key role in its growth in FY 2020.

The Scentre Group (ASX: SCG) share price is up 4% to $2.10. Investors have been buying the shopping centre operator’s shares despite it posting a $3.6 billion statutory loss for the first half. This result includes an unrealised non-cash reduction in property valuations of ~$4.1 billion. Investors appear to have been expecting even worse from the Westfield shopping centre operator.

The Westpac Banking Corp (ASX: WBC) share price has stormed 4.5% higher to $17.88. All of the big four banks are storming higher on Tuesday. This is possibly due to hopes about a coronavirus treatment which helped drive European and U.S. markets higher overnight. The Trump administration is believed to be considering fast-tracking an experimental vaccine from the UK.

More reading

• Why the Xero share price can crack $100 per share in 2020
• 3 ASX shares that could give investors a stock split in 2020
• What are dividend shares and how do you find them?
• ASX 200 rises 0.3%, Afterpay up on European plans
• Is this ASX 200 market too greedy right now?

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The Alumina Limited (ASX: AWC) share price is currently trading higher following the company’s release of its half year results. At the time of writing, the Alumina share price had jumped 6.25% in morning trade.

The company invests worldwide in bauxite mining, alumina refining and selected aluminium smelting operations through its 40% ownership of Alcoa World Alumina and Chemical (AWAC). Alcoa Corporation owns the remaining 60% and is the manager.

HY20 Results

Alumina reported a statutory net profit after tax of US$90.5 million for the half. However, excluding significant items, net profit after tax was US$87.5 million.

The company has announced a fully franked interim dividend of 2.8 US cents per share.

Alumina was able to achieve a daily production record for the half. Low production costs have resulted in a cash margin of US$73 per tonne for the first half. 

Earnings before interest, taxation, depreciation and amortisation (EBITDA) for AWAC was US$507.1 million. This represents a decrease of US$442.8 million compared to the prior corresponding period (pcp). 

Additionally, AWAC’s net cash inflows decreased US$182.3 million or 48% to US$200.1 million in the half. As a result, Alumina Limited’s free cash flow available for dividends has fallen 68% to US$81.1 million in HY20 from US$255.3 million in the pcp.

Furthermore, despite the coronavirus pandemic reducing demand for aluminium products, global primary aluminium production increased slightly over the first half of 2020 to 32.1 million tonnes.

The third party bauxite market remains in surplus with significant production continuing in Guinea. The main sources of imported bauxite in the first half of 2020 into China were 47% from Guinea, 32% from Australia and 18% from Indonesia.

Outlook

The company has advised due to a recent supply disruption in Brazil, the global alumina market is expected to be in deficit by around 1.1 million tonnes this year. Additionally, in the first half there was an increase in aluminium inventories and that is expected to continue in the second half. However, it’s expected to be at a slower rate as economies recover. 

Currently, the alumina spot price has increased to US$288 per tonne following the supply disruption in Brazil.

Alumina’s Chief Executive Officer, Mike Ferraro said “Consistent cash generation at AWAC, combined with Alumina’s strong balance sheet, means that our enterprise is resilient to shocks and market disruptions and that is reflected in the half year financial performance….”

The coronavirus pandemic has hit the Alumina share price hard with it currently trading 32.27% lower than its 52 week high of $2.51. The Alumina share price is now trading at $1.70 which is 26.1% down since the start of the year. 

More reading

• This is the only ASX sector tipped to report earnings growth this reporting season
• These shares were the ASX 200’s biggest losers last week
• ASX 200 Weekly Wrap: ASX has week of high volatility

Motley Fool contributor Matthew Donald has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Ampol Ltd (ASX: ALD) share price dropped lower today, down 2.46% to $27.50 at the time of writing. This came after the company released its half year report to 30 June 2020.

How did Ampol fare in FY20?

Ampol reported revenue of $8.05 billion in the half year to 30 June 2020, a 22% drop compared to the same period in 2019. 

The transport fuels company had net profit after tax (NPAT) on a historical cost of sales basis of -$626 million. This compared to NPAT of $155 million in the half year to 30 June 2019. The company said the result reflected a $434 million inventory cost, and $312 million in significant items including asset impairments of sites impacted by the coronavirus pandemic.

The group had earnings before interest and tax (EBIT) of $221 million, a drop from $255 million in 2019. Ampol said this was supported by convenience retail RCOP EBIT, which was up 47% compared to the prior period, although fuel and infrastructure RCOP EBIT dropped compared to the first half of 2019.

Ampol reported the business was impacted by COVID-19, with Australian volumes down 14% compared to the first half of 2019. The company had net borrowings of $1.23 billion at 30 June 2020. This compares to $1.26 billion at 30 June 2019.

The company declared an interim dividend of 25 cents to be paid in October 2020. The dividend will be fully franked.

Moving forward, Ampol said focus remained on addressing the cost base and optimising value across the integrated supply chain, to deliver strong financial returns across both fuel and infrastructure and convenience retailing businesses.

About the Ampol share price

Ampol is a transport fuels company which operates with two divisions, fuel and infrastructure and convenience retailing. Ampol has various fuel infrastructure assets along with more than 800 retail stores, making it Australia’s number one transport fuels company. Previously known as Caltex, the company has a history dating back to 1900.

Earlier this month, Ampol announced that it would sell a 49% stake in 203 of its freehold sites. The deal is expected to free up $612 million in capital.

The Ampol share price is up 53.44% since its 52-week low of $18.32. However, it is down 17.35% since the beginning of the year. The Ampol share price has returned 8.74% since this time last year.

More reading

• Why the Ampol share price is lower today

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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