The Australian share market ended last week lower with the S&P/ASX 200 (ASX:XJO) falling 0.2%. After hitting a four-month high on Tuesday, the market slid lower over the remainder of the week. News around a potential COVID-19 vaccine buoyed the market early, but economic data dampened spirits towards the end of the week. The government announced the extension of its stimulus program which gave investors some comfort, but continuing high numbers of COVID-19 cases in Victoria is blunting optimism.
The information technology sector finished the week marginally higher with the S&P/ASX All Technology Index (ASX: XTX) up just under 2%. The healthcare sector, however, was down, as were industrials. A number of blue chip shares dropped last week, including both Coles Group Ltd (ASX: COL), which fell 2% and Woolworths Group Ltd (ASX: WOW), which fell 0.6%. Miners and telecommunications shares were also weak with Telstra Corporation Ltd (ASX: TLS) falling 3.8% and BHP Group Ltd (ASX: BHP) down 2.2%. On that note, let’s take a look at the ASX 200’s biggest share price fallers last week.
Alumina Limited (ASX: AWC)
The Alumina share price fell 7.2% last week to finish the week at $1.67. There was no news out of the aluminium and bauxite miner to prompt the fall in the share price, however the price had risen strongly the previous week. The previous share price rise was prompted by the announcement Alumina had received more cash than expected from its aluminium joint venture.
Alumina owns 40% of Alcoa World Alumina & Chemicals (AWAC), the western world’s largest alumina business. AWAC achieved record quarterly daily production despite the challenges of the COVID-19 pandemic and Alumina received $58.6 million of net cash distributions. The price of alumina has decreased since the start of 2020, but has risen from a low of $225 per tonne in April to $284 per tonne as at 16 July. Escalating political tensions between the United States and China do not bode well for the price, however, as these tensions hurt demand last year.
Cooper Energy Ltd (ASX: COE)
The Cooper Energy share price fell 7.1% last week to close the week at 39 cents. Cooper Energy is an oil and gas company supplying customers including AGL Energy Limited (ASX: AGL) and Origin Energy Ltd (ASX: ORG). Cooper Energy dropped its June quarterly report on Thursday which showed record quarterly production and revenue. But the share price dropped sharply on Friday regardless, with the figures disappointing investors given the share’s 16% price rise over the preceding month.
Cooper Energy reported a 118% increase in quarterly production and 61% increase in quarterly revenue, which reached $24.1 million, up from $15 million the previous quarter. This increase was primarily due to higher gas sales thanks to the first full quarter’s supply from the Sole gas field which commenced production in March 2020. Full year production increased 19% and full year sales revenue 3% to $78.1 million. Cash at the end of the quarter was $131.2 million, down from $143.3 million at the beginning of the quarter. Net debt was $98.2 million at 30 June, up from $53.9 million at 30 June 2019.
Western Areas Ltd (ASX: WSA)
The Western Areas share price dropped 6.6% last week to finish the week at $2.53. Western areas is a nickel producer with two high-grade nickel mines located in Western Australia and also has a third mine in development. Western Areas released its quarterly activities report last week which showed the company produced 20,926 nickel tonnes in concentrate, 99.7% of guidance. Unplanned downtime in June relating to power supply interruptions caused the variance.
The nickel price is well down from highs seen a year ago but has gained ground from its low in March. The average nickel price in the June quarter was $8.50 per pound, slightly up on the March quarter’s $8.40 per pound. Western Areas reports that it finished the FY20 financial year with $144.8 million cash at bank and no debt. The most significant cash flow item for the quarter was the $28.6 million paid for its 19.9% investment in Panoramic Resources Ltd (ASX: PAN).
TPG Telecom Ltd (ASX: TPG)
The TPG share price fell 6.1% last week to close the week at $8.02. The share price fell as low $7.50 on Friday but then bounced back somewhat, perhaps on speculation it had been oversold. There was no news out of the telecommunications provider to prompt the price fall. But the telecommunications sector on the whole was out of favour last week, with the S&P/ASX 200 Communication Index (ASX: XTJ) falling 2.3%.
TPG is the result of the $15 billion merger with Vodafone, a deal that was first announced in August 2018. It took nearly two years to implement the deal after the ACCC opposed the merger. Approval from the Federal Court in February allowed the two to join forces. Previously, TPG was missing a proper mobile arm and Vodafone missing a fixed line footprint. The merger allows them both to fulfil their ambitions.
Unibail-Rodamco-Westfield (ASX: URW)
The Unibail share price dropped 6% last week to finish the week at $3.89. There was no news out of the shopping centre operator to prompt the fall in the share price, however investor concerns around the role of its commercial properties in a post-COVID-19 world may have prompted the sell off. Unibail runs retail properties, convention centres, and office buildings in Europe and North America. The Unibail share price is now down 61% over the past year.
The fall in Unibail’s share price means it was removed from the S&P/ASX 100 (ASX: XTO) in the most recent quarterly rebalance. Although the majority of the company’s shopping centres have reopened, performance has been mixed across jurisdictions. With 86% of Unibail’s portfolio in retail assets, the ongoing economic downturn is likely to have a significant impact on its tenants.
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Motley Fool contributor Kate O'Brien owns shares of BHP Billiton Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths 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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