Last week was a volatile one for ASX shares as the growing coronavirus threat sent investors fleeing for safe havens. The S&P/ASX 200 (INDEXASX: XJO) lost 3.5% and has fallen 13.2% since hitting a record high on 20 February, with the market now sitting at its lowest level since April last year.
Central banks tried to stem the flow with stimulus measures. The RBA cut the cash rate to 0.5%, a record low, in an attempt to cushion the blow from the spread of coronavirus. Nonetheless, uncertainty around the length and depth of the outbreak means volatility is likely to remain on the menu.
ASX travel shares and those exposed to interest rates were hit hard last week, but in a sea of red there were some ASX shares that saw gains. Here we take a look at the 5 biggest ASX share price gainers last week.
Chorus Ltd (ASX: CNU)
Shares in Chorus gained 15.2% last week to close on Friday at $7.36. Chorus shares have been trending upwards since it released its half year results in late February, when it upgraded full year guidance.
Following a strong first half, the telecommunications infrastructure provider increased its full year earnings before interest, tax, depreciation and amortisation (EBITDA) guidance of NZ$640–$655 million, up from NZ$625–$640 million. Chorus delivered half year EBITDA of NZ$332 million, up from NZ$318 million in 1HFY19.
The growth in EBITDA was achieved through a combination of operating cost reductions and strong broadband connections growth. Net profit after tax (NPAT) was NZ$31 million up from NZ$30 million in the prior corresponding period.
Last year’s completion of the first phase of the Ultra-Fast Broadband roll out marks the beginning of the wind down of Chorus’ communal fibre build program. The second phase is already 40% complete with just 150,000 premises remaining to be passed by December 2022.
At the end of the first half, the Chorus board acknowledged that its investors have had constrained returns through the decade long fibre investment cycle. It announced that from FY22 the company expects to transition to a dividend policy based on a payout range of free cash flow.
Elders Ltd (ASX: ELD)
Elders shares increased 13.8% to close the week at $8.81 as improving weather boosted investor confidence in the company. Elders avoided damage in the summer bushfires, but did advise in January that it expected livestock agency commissions and farm supplies sales to be negatively impacted in bushfire affected regions.
Now that the threat of the bushfires has subsided, Elders is likely benefitting from increased demand for farm supplies. With fires having eased, restocking and rebuilding will have commenced, increasing demand for Elders’ products.
Last week, Elders also saw a show of faith from major shareholder Perpetual Limited (ASX: PPT), which increased its holding in the agribusiness to 10.69% (from 9.49%) with the purchase of almost 2 million shares.
Saracen Mineral Holdings Limited (ASX: SAR)
Shares in Saracen increased 13.8% last week to finish the week at $4.29. The gold producer benefitted from the flight to safe haven assets as investors looked to gold and bonds to weather the share market storm.
The price of gold has spiked recently, increasing around 7% since the beginning of March, and is currently selling for more than $2,500 an ounce. Saracen is aiming to produce more than 500,000 ounces of gold in FY20.
In its half year results reported in February, Saracen recorded an 84% increase in underlying NPAT, which reached $80.2 million. Gold production for the half year rose 22% to a record 216,452 ounces with the average realised gold price up 18% to $1,984 an ounce. The all-in sustaining cost of production was steady at $1,041 an ounce.
Saracen bought a half share in the Super Pit mine for US$750 million in November last year, which will bring benefits of scale, asset diversity, and cash flow. The company reported $283.3 million in cash, bullion, and investments at 31 December 2019, with $385 million in debt.
TPG Telecom Ltd (ASX: TPG)
Shares in TPG were up 10.9% last week, finishing the week at $8.35, following news the ACCC will not appeal the Federal Court decision to approve its merger with Vodafone Hutchison Communications (Aus) Ltd (ASX: HTA). TPG also released its half year results last week and upgraded full year guidance.
Reported net profit for the half year increased by 206%, although profits in 1HFY19 were adversely impacted by a $227.4 million impairment expense. Business as usual EBITDA was 5% lower than the prior corresponding period at $404.2 million, impacted by NBN headwinds. An interim fully franked dividend of 3 cents per share was declared.
In light of its first half performance, the company updated its full year guidance for FY20. EBITDA, which had been expected to be $735–$750 million, is now anticipated to be $775–$785 million.
TPG is targeting completion of the merger in mid 2020, although a number of conditions remain to be met including FIRB approval and approval from the Committee on Foreign Investment in the United States.
Newcrest Mining Limited (ASX: NCM)
Newcrest Mining shares ended the week at $29.08, up 10.6%. The gold mining company benefitted from the increase in gold prices and flight of investors into related assets.
The miner has one of the world’s largest gold reserves and also one of the lowest costs per ounce of extraction. It estimates its reserves will last around 22 years at current production rates. Newcrest has been expanding exploration efforts of late, and also has a large portfolio of early entry partnerships.
Last week Newcrest bid adieu to its Gosowong mine in Indonesia via the sale of Newcrest Singapore Holdings. Newcrest is to receive $90 million for the sale, which came after the Gosowong contract of work was amended to require its operating companies to be majority owned by Indonesian parties. Newcrest has thus far received $60 million with the remaining $30 million payable in 18 months.
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Motley Fool contributor Kate O'Brien has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Elders 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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