ASX 200 edges lower, Cochlear sinks, Inghams rises

In the ASX 200, Cochlear’s profit growth wasn’t enough to stop it falling after its result.

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The S&P/ASX 200 Index (ASX: XJO) slightly fell to 7,461 points today.

Here are some of the highlights of the ASX:

Cochlear Limited (ASX: COH)

The Cochlear share price was one of the worst performers in the ASX 200. It dropped by 7%. The hearing device business released its FY21 result today.

Cochlear reported that sales revenue increased by 10% to $1.49 billion. In constant currency terms, revenue went up 19%. Compared to FY19, in constant currency terms, revenue increased 6%.

The number of cochlear implant units increased 15% to 36,456, with developed markets up approximately 20% and emerging markets up around 10%. Compared to FY19, cochlear implants increased 7%.

The company reported that its underlying net profit increased by 54% to $236.7 million. That saw the underlying net profit margin improve by 5 percentage points from 11% to 16%. However, this was still below its 18% longer-term target.

Statutory net profit improved to $326.5 million, up from the $238.3 million loss last year. The ASX 200 company explained that the statutory profit included $59 million of patent litigation-related tax and other benefits, as well as $31 million of innovation fund gains after-tax.

Cochlear’s board decided to increase the full year dividend per share by 59% to $2.55 per share. This represented a dividend payout ratio of 71%.

FY22 net profit guidance was for a range between $265 million to $285 million – an increase of 12% to 20%.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

The ASX 200 airport operator said that it made a loss after tax of $97.4 million in its half-year result. The Sydney Airport share price fell 0.25%.

It saw 6 million passengers travel through the airport during the six months, which was a decline of 36.4%. International passengers declined by 91% and domestic passengers declined by 3.1%.

Sydney Airport’s earnings before interest, tax, depreciation and amortisation (EBITDA) fell 29.8% to $210.8 million. Net operating receipts sank 98% to $1.8 million.

The company explained that tight cost control resulted in operating expenses declining 7.8% to $74.2 million. It ended June 2021 with $2.9 billion of liquidity.

Sydney Airport CEO Geoff Culbert said:

It was a challenging six months, but we were encouraged to see passenger traffic rebound strongly every time borders were open. From January to April, we recovered to 65% of our pre-COVID domestic passengers and in just over two months between late April and June, trans-Tasman traffic recovered to more than 40% of pre-COVID levels.

We’re optimistic that this trend will repeat itself as the vaccine program gains momentum and we see a sustained easing of restrictions.

Sydney Airport saw total passenger traffic drop 67.9% in July 2021 to 102,000 as domestic passengers sank 75.1% to 69,000.

Inghams Group Ltd (ASX: ING)

The Inghams share price increased by more than 5% after the ASX 200 business released its FY21 result.

It said the core poultry sales volume growth was 4.2% to 446.9kt. Revenue grew by 4.4%. There was a “positive” net selling price performance across most channels.

Underlying EBITDA increased 9.6% to $448.7 million, whilst underlying net profit (pre AASB 16) grew by 28.4% to $101.2 million. Statutory net profit grew 107.7% to $83.3 million.

Inghams’ CEO and managing director Andrew Reeves said:

These strong financial results are underpinned by solid poultry volume growth and a recovery across the majority of our key channels during the year. Operationally, we are in a strong position and our optimisation strategy has made a positive contribution to the results we have delivered.

Inghams said that its initiatives will continue to deliver meaningful benefits in excess of inflationary cost increases through operational efficiencies implemented across the business.

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Motley Fool contributor 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 and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. 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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