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ASX 200 drops 0.3%, gold miners keep rising

ASX 200
Credit: Cimexus

The S&P/ASX 200 Index (ASX:XJO) dropped by 0.3% today, declining to 5,864 points.

Gold miners rise again

Over the past couple of weeks the share prices of ASX 200 gold miners have been rising as other shares like the FAANG stocks have dropped.

Looking at today’s ASX 200 movements:

The Saracen Mineral Holdings Limited (ASX: SAR) share price went up 4.2%, the Perseus Mining Limited (ASX: PRU) share price rose by 3.3%, the Evolution Mining Ltd (ASX: EVN) share price grew 1%, the Gold Road Resources Ltd (ASX: GOR) share price rose by 3%, the Resolute Mining Ltd (ASX: RSG) share price climbed 1%, the St Barbara Ltd (ASX: SBM) share price rose 1.5% and the Silver Lake Resources Ltd (ASX: SLR) share price rose 2.9%.

Today’s biggest declines

The share price of AMP Limited (ASX: AMP) dropped by 8% today after it went ex-dividend with its special dividend. It was the worst performer in the ASX 200.

There were other large declines with the Unibail-Rodamco-Westfield CDI (ASX: URW) share price falling 7.3%, the Abacus Property Group (ASX: ABP) share price dropped 4.3%, the Virgin Money UK CDI (ASX: VUK) share price declined 4.1% and the Qube Holdings Ltd (ASX: QBE) share price fell 2.6%.

Clover Corporation Limited (ASX: CLV)

The Clover share price fell over 8% today after reporting its FY20 result.

Sales revenue increased by 15.1% to $88.3 million. Management said that there was growth across all of its markets. The Australian, New Zealand and Asian markets continued to show growth, driven by infant formula demand and increased interest in the health benefits of omega 3 fatty acids resulting in new customers creating new products for the food and nutraceutical sectors.

Clover said the European Union market has grown substantially as new and existing infant formula manufacturers adjust their formulations to meet the new EU standard for infant formula since February 2020. The leadership said the USA has shown promising growth, with many projects on hold due to COVID-19 impacts.

Clover’s earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 35% to $18.9 million, net profit before tax rose by 26% to $17.7 million and net profit after tax jumped 23.8% to $12.5 million. Earnings per share (EPS) increased by 22.7% to 7.51 cents.

The ASX share’s board decided to increase the final dividend by 5% to 2.5 cents

Clover said it benefited from pantry stocking during the third and fourth quarter of FY20. Though it’s seeing demand normalise now.

The company said its balance sheet remains strong with net debt of $5.4 million.

Clover also explained that it invested in a new company called Melody Dairies in 2019 which has built a new nutritional spray dryer in New Zealand during 2020. Clover owns 42% of the company and has access to 42% of its capacity to manufacture its products.

The construction of the spray dryer is complete with qualification trials progressing well. However, customer audits have been impacted by COVID-19 preventing travel, which will slow production volume initially.

Fonterra Shareholders’ Fund (ASX: FSF)

Fonterra reported its FY20 result today to the market.

It said that it generated profit after tax of $659 million, up $1.3 billion. Normalised profit after tax came in at $382 million, up $118 million.

Group earnings before interest and tax (EBIT) was $1.1 billion, up $1.2 billion from the previous year. Fonterra generated normalised EBIT of $879 million, up $67 million.

Normalised gross profit grew by $200 million to $3.2 billion. Normalised operating expenses dropped by $14 million to $2.3 million.

Fonterra generated free cashflow of $1.8 billion, up $733 million. This helped reduce net debt by $1.1 billion over the year to $4.7 billion.

Fonterra Chair John Monaghan said: “This year marks a return to paying dividends, a position we expect to maintain in the future, assuming normal operating conditions.

“At 5 cents per share, the dividend is at the lower end of the 5 cent to 7 cent range calculated under the board’s dividend policy guidelines.”

In FY21, Fonterra is expecting earnings to be between $0.20 per share to $0.35 per share. For context, FY20 earnings per share (EPS) was $0.24. The business reaffirmed its FY21 farmgate milk price range of $5.90 per kgMS to $6.90 per kgMS.

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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Clover Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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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