The S&P/ASX 200 index posted its first monthly decline of the year in August after trade tensions and recession fears in the United States weighed heavily on investor sentiment.
The benchmark index ended the month 208.4 points or 3.1% lower than where it started it at 6604.2 points.
A number of shares performed even worse than this and recorded heavy declines. Here’s why these shares were the worst performers on the ASX 200 in August:
The Speedcast International Ltd (ASX: SDA) share price was the worst performer on the ASX 200 index in August with a decline of 58.1%. Almost all of this decline came in the final week of the month when the global satellite communications provider released a very disappointing half year update. In the first half of FY 2019 Speedcast reported a 17.3% increase in revenue to $357.6 million, but a statutory loss after tax of $175.5 million. Another concern for investors was its spiralling debt. Speedcast’s net debt increased to $625 million, which is now over three times larger than its market capitalisation.
The oOh!Media Ltd (ASX: OML) share price was some distance behind with a 30.4% decline last month. The catalyst for this decline was the media and outdoor advertising company downgrading its profit guidance. Challenging trading conditions led to oOh!Media cutting its FY 2019 EBITDA guidance from between $152 million and $162 million to between $125 million and $135 million. This was is a reduction of 17% to 18% on its previous guidance.
The Pilbara Minerals Ltd (ASX: PLS) share price continued its slump and fell a further 27% in August. This latest decline means the lithium miner’s shares have now lost 56% of their value since this time last year. Pilbara Minerals and its fellow lithium miners came under pressure last month after industry giant SQM revealed that it intends to increase production significantly in order to win market share. Unfortunately for the local producers, SQM doesn’t appear concerned that this could impact prices.
The Bellamy’s Australia Ltd (ASX: BAL) share price was a disappointing performer in August, recording a 27.1% decline. The infant formula company’s shares came under significant selling pressure following the release of a soft full year result. Bellamy’s reported a 19% decline in revenue to $266.2 million and a 36% drop in normalised net profit after tax to $30.1 million. Management also deferred its $500 million revenue target to beyond FY 2021 due to delays in gaining its SAMR accreditation.
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Returns as of 6th October 2020
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Bellamy's Australia and oOh!Media Ltd. 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.