The pace of the Australian June 30 reporting season accelerates slightly this week.
After a couple of weeks of early reports from the likes of Australian Foundation Investment Co, GUD, Credit Corp, Mirrabooka Investments, and Temple & Webster, the online retailer, the number and quality of the reporting companies improves a little this week.
Among the handful of companies due to report including Resmed (Thursday), Insurance Australia Group (loss), News Corp (loss) and REA (Friday, a smaller profit).
A couple of real estate investment trusts from Centuria also report, as will Pinnacle Investments, Mirvac, and Nick Scali.
AMP chief economist, Shane Oliver says It’s going to be the worst reporting season in years with consensus expectations for a 20.5% fall in earnings due, mostly due to the hit from coronavirus which will be the biggest fall since the GFC.
“Financials will be the hardest hit with an expected -27% slump in earnings led by insurers and the banks, followed by industrials with a -15% fall in earnings and resources with -13%,” Dr. Oliver wrote.
“Healthcare may be the only sector to see a rise in earnings (and even that’s iffy),” he wrote at the weekend.
Woodside, Oil Search, Santos, Origin, Beach, and other energy groups will produce big losses in coming weeks because of weak oil and gas prices and already announced write-downs totalling more than $10 billion
Some retailers will do well – Harvey Norman, JB Hi-Fi, Kogan (after Temple& Webster’s top figures).
Media stocks will be loss-makers or see sharp slides in earnings and payouts.
Fortescue Metal’s full-year earnings will be a record, OZ Minerals’ interim will be solid, as will the full-year figures from Newcrest.
AMP surprised on Friday with a downgrade and warning ahead of the company’s interim results this month, predicting underlying profit will slump to between $140 to $150 million, or less than half of last year’s $309 million figure.
It’s also predicting assets under management (AUM) to fall by 6% to $126 billion in its wealth management business due to the government’s early release of super scheme ($900 million) and loss of corporate mandates ($1.3 billion).
AMP Capital is expected to report AUM to fall by 2 percent compared to the previous quarter, largely as a result of market volatility and devaluation of infrastructure sponsor investments. AMP also said its performance and transaction fees are estimated fall around 40% thanks to the big slide in the March quarter especially.
AMP chief executive Francesco De Ferrari said the group’s capital and liquidity had positioned it well to respond to the economic crisis brought on by the pandemic.
“The pandemic has presented many challenges but has not distracted us from our mission to transform AMP into a simpler, client-led, growth-orientated business,” Mr. De Ferrari said.
AMP shares were worth $1.68 before the news on Friday.
They fell 12.4% to $1.47 at the close to be down more than 14% for the week, nearly 20% for July and 23.5% year to date.
Brisbane-based outdoors and automotive retailer Super Retail Group has confirmed earlier updates that its full-year sales will be higher due to a surge in sales through May and June, that more than made up for the slide in March and April.
In a trading update on Friday, the operators of Supercheap Auto, Rebel Sport, BCF, and Macpac said its total sales for the year would rise 4.2% to around $2.82 billion, up 3.6% on a comparable store basis.
Sales across three of its four divisions were positive, with only outdoors retailing arm, Macpac sliding 9.1%. However, comparable sales at Supercheap increased 6.3% 2.7% at Rebel, and 3% at BCF.
Earnings before interest, tax, depreciation, and amortisation will be between $327 million and $328 million, a rise of up to 4.1%.
But as good as this news is, net profit (before one-off items) will not be so solid and will either be flat or to slightly lower because of crimped profit margins from increased online sales (lower margin) and higher costs for introducing social distancing and other measures to fight the impact of the pandemic.
Friday’s unaudited results released excluded $54 million in pre-tax abnormal items, which cover back-payments for underpaid staff, asset write-downs, support office restructures, and the exit of some non-core businesses.
Super Retail will provide its audited full-year results to the market on August 24.