ASX 200 drops, Challenger plummets, Lynas falls

The S&P/ASX 200 Index (ASX:XJO) dropped today. The Challenger Ltd (ASX:CGF) share price plummeted and Lynas (LYC) fell too.

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The S&P/ASX 200 Index (ASX: XJO) fell by 0.7% today to 7,018 points.

Here are some of the highlights from the ASX:

Challenger Ltd (ASX: CGF)

The Challenger share price was the worst performer in the ASX 200 today, falling by around 16% after releasing its quarterly update for the period to 31 March 2021.

The annuity business reported that its group assets under management (AUM) went up 8% for the quarter and went above $100 billion.

Life investment assets went up 6% for the quarter. This benefited from record quarterly annuity sales of $1.6 billion and record quarterly life book growth of 9.2% for the quarter.

Funds under management (FUM) went up 9% for the quarter, including $7 billion of net flows.

However, the company said that normalised net profit before tax is expected to be at the bottom end of its guidance range of $390 million to $440 million.

The ASX 200 company said that the earnings guidance reflects the sharp decline in credit spreads over the year, which were not fully reflected in customer pricing. Challenger is responding to the investment conditions by significantly adjusting annuity pricing.

Challenger’s managing director and CEO Richard Howes said:

Sales of our institutional term annuity and Challenger Index Plus have been very strong, reflecting the investment we are making to build relationships with new institutional clients.

Annuity sales also benefited from stabilisation in the retail adviser market, with domestic retail term sales up 32%. As previously flagged, Japanese annuity sales moderated following the strong start to the year.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas share price was another of the worst performers in the ASX 200. It fell around 8%.

Today, Lynas revealed its quarterly report for the period ending 31 March 2021. It said that total rare earth production was 4,463 tonnes. NdPr (neodymium-praseodymium) production was 1,359 tonnes.

Quarterly sales revenue was $110 million, whilst quarterly sales receipts were $133 million. The miner finished with a closing cash balance of $568.5 million.

Lynas said that favourable market conditions continued through the quarter. Demand for NdPr remained robust accompanied by higher prices for both NdPr and SEG, leading to another strong quarterly result for the period ending 30 March 2021.

Demand for dysprosium increased and terbium stabilised during the quarter. NdPr and SEG selling prices reached new records and the average selling price across the full range was A$35.5 per kilo during the quarter.

Rio Tinto Limited (ASX: RIO)

The Rio Tinto share price fell 0.5% today after reporting its quarterly update to investors.

The ASX 200 share said that Pilbara iron ore shipments were up 7% year on year to 77.8 million tonnes. Pilbara iron ore production was down 2% year on year to 76.4 million tonnes.

Production was lower due to above average wet weather in the mines through February and fixed plant reliability.

Rio Tinto chief executive Jakob Stausholm said:

We achieved an overall solid operating performance in the first quarter. We have maintained guidance ranges in all our products, with site teams successfully managing the effects of significant rainfall, in particularly at our Australian iron ore assets.

It has been a period of deep reflection for the company, and I have personally spent a significant amount of time listening, learning and taking actions, in particular to better manage traditional owner partnerships and cultural heritage. I have appointed a new leadership team and the transition is progressing well. We have set out clear priorities to develop a stronger Rio Tinto. Our focus is to become the best operator, strive for impeccable ESG credentials, excel in development and secure a strong social licence.  

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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