Reporting season roundup

While the Australian economy appears to be dragging its heels, the Australian share market is going from strength to strength with strong profit results from BHP and the Commonwealth Bank dominating this reporting season.

BHP’s share price climbed more than 3 per cent to a record high of $68.82 as the company posted a record profit of $13.2 billion, with returns from the copper division outpacing iron ore for the first time in the company’s history.

Exports across the mining sector were strong, keeping both the country and the share market in good shape.

Nipping at BHP’s heels, the Commonwealth Bank posting an equally strong cash profit of $11 billion. Return on equity lifted 50 basis points to 14 per cent while its fully franked share dividend for the year lifted 20 cents to $5.05.

While its share price was dragged down by concerns in the Australian property market, and higher interest rates, CEO Matt Comyn noted house prices had previously been running too hot and described recent events as a much needed normalization rather than an alarming crisis.

Other companies showing buoyant profit figures were Mineral Resources, boosted by strong iron ore sales, gold miner Agnico Eagle and Evolution Mining, who managed to achieve some very significant operational efficiencies.

Given the recent interest rate hikes and rising rate of inflation, Zip Co, a buy now, pay later finance provider, delivered a strong result with limited bad debts and cash earnings up some 58 per cent.

Excluding the private credit sector, this performance has been reflected across most banks and financiers despite the recent increase in interest rates.

There were of course some poor results. Among the biggest losers were data-centre and real estate heavyweights such as the Goodman Group, down 12.3 per cent, NextDC down 16.9 per cent, Digico down 34.6 per cent and HMS Capital down 27.5 per cent.

When spending on take away food is up, Domino’s Pizza’s reported a net loss of $134 million, despite tough management decisions to close some 60 stores and improved operational efficiencies. Its share price tumbled 11 per cent.

Against this, the two large supermarket chains, Woolworths and Coles traded strongly with Woolworths reporting a net profit of $1.14 billion and Coles reporting $1.1 billion, proving the more people in the country the more that is spent on food.