Australian Stock Market Report – Afternoon August 18, 2014
By Tom Piotrowski, CommSec Market Analyst | August 18, 2014 5:52 PM EST
Local stocks finish strongly
The ASX200 enjoyed a flirtation with both buyers and sellers over the course of the first trading day of the week. In early trade the index started with a gain of 16 points before quickly surrendering the improvement. At the lows of the day shortly thereafter the market was up by almost a point. In the late part of the morning buyers once again exerted themselves and the index commenced a rally that took in almost 18 points. The move higher wasn't validated by investor interest with volume on the lighter side with $3.7 billion dollars having been exchanged.
Traders work on the floor of the New York Stock Exchange July 17, 2014. U.S. stocks fell sharply lower on Thursday, with the S
One of the themes to emerge from today's results was the impact of write-downs on company profitability. Rail freight operator Aurizon (AZJ) announced a 43% fall in Net Profit After tax (NPAT). The result was driven by previously announced asset write-downs or impairment charges, against its rolling stock which totalled $317 million, in addition to redundancy costs of $69 million. Removing the impact of these one-off events, underlying profit rose by almost 7.5% to $523 million. Underlying earnings before interest & tax (EBIT) rose by 13% to $851 million however this was below the markets expectations of $876 million. AZJ declared an unfranked final dividend of 8.5 cents per share, payable on 22nd of September 2014. The market was left underwhelmed by the result with the stock ending at $4.89, a loss of 18 cents or 0.8 per cent.
Impairments were a feature for Newcrest Mining (NCM) in reporting results. The gold miner posted an underlying profit of $432 million for the full year, which was in-line with the markets expectations. In July NCM announced asset impairments on numerous assets, the bulk of which was made up by the Lihir mine in PNG. Together the writedowns totalled $2.35 billion which meant that the full year result slumped to a $2.22 billion net loss. The result comes on the heels of $6 billion in impairments in the prior year and one of the worst years in its history. NCM shares finished at $11.08, a loss of 12 cents or almost 1.1 per cent.
Ansell (ANN) protective clothing maker Ansell has suffered a 70 per cent slide in its full year profit due to costs linked to the restructure of its operations. However, ANN reported full year underlying net profit of $157m up 13% which was in line with market estimates in the range of $158m. Sales grew by 16%. Statutory Net profit fell 70% to $41.8 down.
The group announced a final dividend of US39c up 6%. ANN shares ended at $19.81 up 4.3%,
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