ASX 200 jumps, Qantas flies, Nufarm rises

The S&P/ASX 200 Index (ASX:XJO) went up more than 1% today. The Qantas Airways Limited (ASX:QAN) share price rose after an update.

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The S&P/ASX 200 Index (ASX: XJO) went up around 1.3% to 7,020 points.

Here are some of the highlights from the ASX today:

Qantas Airways Limited (ASX: QAN)

The Qantas share price went up around 4% after the company gave a trading update to investors.

Qantas said there is a sustained rebound in domestic travel demand. Combined with the performance of its freight and loyalty divisions, this is continuing to drive its recovery from the impacts of COVID-19.

Based on the current trading conditions, the group expects to be statutory free cash flow positive for the second half of FY21. Net debt levels peaked in February at $6.4 billion and are expected to be lower than they were in December ($6.05 billion) by the end of the financial year.

Qantas has total liquidity available of $4 billion, that is split between $2.4 billion and $1.6 billion of undrawn debt facilities at 30 April 2021.

Assuming no further lockdowns or significant domestic travel restrictions, Qantas is expecting to generate $400 million to $450 million of underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY21.

However, the ASX 200 airline still expecting to report a statutory loss of more than $2 billion in FY21 due to redundancies, aircraft write-downs and depreciation charges.

Qantas said it’s on track to reach 95% of its pre-COVID domestic capacity for the fourth quarter of FY21. Qantas and Jetstar expect to average 107% and 120% respectively of their pre-COVID domestic capacity in FY22.

However, in a warning for travel agents, Qantas said it’s going to reduce costs by lowering front-end commissions on international tickets from 5% to 1%. The change won’t happen until July 2022.

It’s also offering voluntary redundancy for Qantas international cabin crew.

Nufarm Ltd (ASX: NUF)

The Nufarm share price rose by more than 3% today after reporting its result for half-year to 31 March 2021.

Revenue increased by 20% to $1.65 billion, underlying EBITDA rose 118% to $233.6 million and underlying earnings before interest and tax (EBIT) grew 1,590% to $130.4 million. Its operating profit improved to a profit of $128.8 million.

The ASX 200 share reported that there was growth in all regions and ‘seed technologies’, with particularly strong growth in the Asia Pacific and European regions.

The Nufarm managing director and CEO Greg Hunt said:

Strong early demand and channel restocking in key markets has delivered a very strong first half result. We are realising benefits from the leverage of our APAC business to improved seasonal conditions and the earnings recovery in our European business is on track.

Iluka Resources Limited (ASX: ILU)

The Iluka Resources share price fell 4.4% today, making it one of the worst performers in the ASX 200.

It said that Sierra Rutile continues to face acute business challenges, particularly since the onset of the COVID-19 pandemic. Its operational performance has been below expectations resulting in a financial performance that is unsustainable.

On 19 May 2021, Sierra provided the Government of Sierra Leone six months’ notice of its intention to temporarily suspend operations at Sierra Rutile.

During these six months, it’s going to evaluate the feasibility of mining operations there and continue trying to find third parties willing to invest. If the cost base can be reduced so that it can return to profitability and attract new investors then it will withdraw the suspension notice and mining operations will continue. A suspension of operations like this cannot exceed two years.

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