The ASX reporting season continues to deliver, revealing the impact of the coronavirus on share price bottom lines. It's been full of surprises as some companies deliver better than expected results, while others slash dividends in the face of retreating revenues. Last week was no exception, with some big financial shares revealing falling profits, but miners and retailers reporting surprisingly strong results.
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ASX reporting season: Is the worst over for banks?
Commonwealth Bank of Australia (ASX: CBA) reported its full year results on Wednesday, slashing its dividend as profits tumbled. Cash profits declined 11.3% thanks to high loan impairment provisions related to COVID-19. The final dividend was reduced to 98 cents, in line with APRA's guidance that banks should retain at least 50% of earnings. Full year dividends were $2.98, a 31% decrease on FY19.
National Australia Bank Ltd (ASX: NAB) reported more resilient than expected third quarter results on Friday. Unaudited cash earnings were $1.55 billion, 7% down on 3Q19. Compared with 1H20, credit impairment charges actually fell 2% to $570 million. This reflected the non-repeat of COVID-19 economic adjustment top-up in March. The NAB share price rose in response, and was up 7.4% over the week.
Retail goes from strength to strength
Stronger than expected results from the retail sector continued when Breville Group Ltd (ASX: BRG) reported full year results on Thursday. Breville saw revenue climb 25.3% over the full year as customers spending more time at home upgraded home appliances.
Profits were skewed by abnormal expenses including an increase in doubtful debt provisions and a write-down on the company's proprietary internet of things platform. CEO Jim Clayton said, "In FY20 we faced a cluster of headwinds in the form of Brexit uncertainty, exchange rates, US tariffs and COVID-19, and equally we had our share of good fortune in terms of our inventory levels and the relevance of our products to the 'new normal'."
Gold mining shines through
On Friday, gold miner Newcrest Mining Limited (ASX: NCM) reported underlying profit of $750 million, up 34% on the previous year.
The miner was helped by increases in the gold price over 2020 – gold is now trading at around $2700 an ounce, up from around $2200 at the start of the year. Although gold production was lower, at 2,171,118 ounces compared to 2,487,739 ounces in FY19, revenue was 5% higher.
The miner's strong balance sheet and performance allowed it to increase dividends for the fifth consecutive year, with the full year dividend 14% higher than last year.
