Good Evening,

Welcome to the ASX News Daily Recap.

Lost track of what happened on the market today?

Don’t stress. We’re here to catch you up.

Here’s a sample of what you may have missed:

1. ✈️ QANTAS Record Profits & New Jets

2. 🩺 Medibank Shines Amidst Cyber Chaos

3. 📱 Nvidia Blasts Past Expectations

4. 💍 Lovisa Falls On Slowing Sales

5. 💉 Telix's Sales Surge

The Recap

QANTAS Soars Higher As

Nvidia Posts a Jaw Dropper

An afternoon mini rally saw the ASX200 finish 0.47% higher to make it three days of green. It was another day dominated by earnings, with Qantas reporting record profit and announcing a share buyback. Meanwhile, Ramsay Healthcare fell after it cut back its dividend on falling profits.

Tech was the big winner today, rising 4.00% as WiseTech (+8.1%) gained some lost ground following its 20% fall yesterday. Xero, NextDC and Altium also finished higher. Financials (+1.04%) and Energy (+0.89%) were two of the other positive sectors. Staples (-1.09%) and Utilities (-1.05%) had the biggest falls of the three sectors that finished lower.

Markets held their breath as Nvidia exceeded estimates when it reported after-hours, reporting $13.51bn in revenue vs. $11.19bn estimated. Datacentre revenue rose 171% Y/Y as more companies switched to Nvidia's chips. Nvidia projected Q3 revenues of $16bn, +/- 2%, compared to $5.9bn in the same quarter last year.

Bitcoin had its largest gain in almost six weeks overnight, currently trading at US$26,440.

ASX200 Stock Snapshot

Wall Street

Nvidia's earnings results for Q2 smashed estimates, reporting an adjusted $2.70eps on sales of $13.51 billion in the quarter ending July 30. Estimates were for earnings of $2.08 p/s on sales of $11.19 billion. On a year-over-year basis, Nvidia earnings rocketed 429% while sales soared 101%.

Record datacentre sales drove Nvidia's quarterly beat. The company's datacentre revenue increased 171% from a year ago to $10.32 billion in the second quarter.

The strong earnings results were driven by strong demand for Nvidia's chips in the data centre and gaming markets. In the data centre market, Nvidia's chips are used for various applications, including artificial intelligence, machine learning, and high-performance computing.

Nvidia's guidance for Q3 FY23 was also strong, as it expects revenue of $16 billion for the third quarter. This guidance was well above analyst expectations of $12.59bn.

Nvidia chief executive Jensen Huang said he expected the A.I. boom to last well into next year, with the company’s sales forecast exceeding market expectations along with plans to buy back another $US25 billion of its own shares.

A share price rise of 10% tonight will see it comfortably cross $1.2T in market cap and close in on $1.3T, entrenching it as one of the ‘Big 5’ Tech stocks in the U.S.

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Earnings

Company Earnings Summary

Here is your quick recap of some of the companies that reported earnings today

• Auckland Airport's net profit for the year ending March declined to $43.2m from $191.6m due to higher expenses, including an $8.4m loss from floods. This offset increased revenue from passenger numbers which nearly doubled to 15.9 million.

• Lovisa shares fell 6.2% on a weak trading update, with same-store sales down 5.8% in FY24. Lovisa reported a 30% increase in sales for FY23 which was in line with expectations.

• Medibank took a $46.4 million hit from the cyberattack that occurred last October but was still able to record a 30% lift in after-tax profits to $511.1 million. The company also lifted its final fully franked dividend from 7.3¢ p/s to 8.3¢ p/s,

• Northern Star will pay out a full year 15.5¢ dividend and extend its on-market share buyback as net profits lifted nearly 30% amid higher gold prices over the year

• Nine Entertainment cut its full-year dividend by 21% after reporting a double-digit fall in earnings and profits, citing a tough television advertising market and rising costs in its broadcast division. NPAT was $279 million, down 25%.

• Perpetual reported a 10% rise in full-year underlying NPAT of $163.2 million as it announced a “refreshed strategy”. Revenue gained 37% to $1.028 billion, mainly due to its acquisition of rival firm Pendal.

• Qube warned that volumes of imported container goods are falling as income earned from handling cars, grain, and commodities helped lift annual net profit 32% to $167.9 million.

• South 32 fell to a $US173 million loss after tax in the wake of a big writedown on its Hermosa base metals project in the U.S. Underlying earnings plunged 65% to $US916 million, down from $US2.6 billion last year.

• The Reject Shop grew total sales by 5.2% to $819.3m, reinstated a dividend payment of 9.5¢ p/s and a special dividend of 9.5¢ p/s, and undertook a further on-market share buyback of up to $10m. Net profit after tax jumped 30.5 per cent to $10.31m.

• TPG Telecom said it would “simplify its brand portfolio, rationalise products and customer journeys, increase digitisation and streamline internal systems and platforms” to boost profit margins. TPG reported interim profits fall of 71% to $48 million.

• Whitehaven Coal has suspended its share buyback program temporarily to consider growth opportunities. The company announced a record full-year profit increase of 37% to $2.67b, driven by high prices for thermal coal.

Markets

Index & Commodity Prices

Bond Prices

ASX By Sector

ETF Watch

Quick Singles

🪃 Local News

• According to Bloomberg, Woodside Petroleum has reached an "in-principle" agreement with Offshore Alliance unions, and no strike notice has been received. Discussions are ongoing in Perth between the Australian gas giant and North West Shelf LNG facility workers' representatives over pay and conditions.

• Sezzle had a dose of reporting FOMO, providing the market with a business update for July with a 23.1% income increase to US$12.5 million. Shares ended the day down 7.8%

• Meanwhile, Costa Group was meant to report today but decided to postpone until next Thursday (when investors will be too tired to care?); the share price fell 10.8% as the company did say that EBITDA-S before material items will be approx. $150million for H1FY23.

• The number one shorted stock on the ASX Core Lithium said it had delivered a 10,000t parcel of spodumene concentrate to Darwin port. It was now ready for shipping to foundation customer Ganfeng Lithium.

🌏 Around The Globe

• One for you Excel nerds - Microsoft is bringing Python to Excel, with users now able to manipulate and explore data using Python plots and libraries combined with Excel's formulas, charts, and PivotTables.

• Netflix is shutting down its DVD rental service on September 29. Customers can keep any remaining DVDs they have after the service shuts down.

• The union representing 340,000 UPS workers said Tuesday that its members voted to approve the tentative contract agreement reached last month, finalising contentious labour negotiations that threatened to disrupt package deliveries.

• Threads is coming to desktops; the new functionality will allow users to create, view, and interact with posts on their desktops. Meta’s daily active users have petered out after an initial spike on launch. Below is a great visual from our friends at Chartr vs. Twitter/X.
  You can sign up for Chartrs newsletter here.

  

₿ Crypto Corner

• The FBI has warned cryptocurrency companies that North Korean hackers may attempt to cash out Bitcoin. The FBI has reported that 1,580 Bitcoin associated with Lazarus Group and APT38 were moved in the past 24 hours.

• Binance.US is exploring using crypto startup MoonPay as an alternative after U.S. banks severed their ties with them.

Movers and Shakers

✅ Biggest Gainers

Telix Pharmaceutical rose by 3.5% to $10.14 as sales from its prostate cancer imaging agent, Illuccix, rose nine times as the company began commercialising the product.

Financial Highlights:

• Total Group revenue increased to $220.8 million, nine times the income of H1 FY22 ($24.0m). This growth is attributed to the sales of their prostate cancer imaging agent, Illuccix®.

• A net loss of $14.3 million after-tax, marking an 80% reduction from the H1 FY22 net loss of $70.9 million.

• Adjusted EBITDAR was $82.4 million, a notable improvement from the loss of $28.0 million last year

• A gross margin of 64% increased from 56%

Telix said it expects to “launch two new products in 2024 for brain and kidney cancer imaging, subject to regulatory approval. ”

Tabcorp reported a net profit after tax of $66.5 million in its first year after the demerger of its lotteries and Keno business and declared a fully franked final dividend of 1.0c p/s. Its expanding wagering business drove this profit, which helped counteract challenging market conditions. Tabcorp increased statutory revenue by 2.6%, reaching $2.4 billion, whilst EBITDA surged by 88%, amounting to $407.4 million. Shares ended the day 4.3% higher to $1.09

The company said its total revenue share from 33.6% to 34.6%, while the number of active digital users grew by 3% in the year leading up to June 30.

Other highlights included a 2% revenue increase from the previous year, a 3% rise in digital active TAB customers, and a notable performance in Queensland after implementing a Level Playing Field. The company also announced the sale of MAX Performance Solutions, emphasising its shift towards Integrity Services, which saw a 36% EBITDA increase from the previous year.

🔻Biggest Fallers

Ramsay Healthcare's share price fell 11.9% after reporting a net profit decline of 3.6% to $365.5 million and cutting its dividend by 48%. Ramsay faced cost pressures throughout the year from higher labour costs.

Their U.K. portfolio expanded with the acquisition of acute hospitals, the Elysium Healthcare mental health chain in FY22 and GHP Specialty Care. These strategic acquisitions proved beneficial, adding $34.3 million to Ramsay's operating EBIT in their first year.

The positive impact of the acquisitions was also reflected in the net profit, which increased by 8.8% to $298.1 million. However, the dividend distribution was reduced to 25¢, leading to a total annual dividend of 75¢, down from 97¢ last year Earnings per share increased by 7.5% to reach 124.8¢.

Ramsay said it anticipates growth from rising healthcare demand driven by demographic shifts and technological advancements. Given construction disruptions and COVID-induced trends, they'll adjust investment strategies, prioritising Australia and emphasising digital platforms. For FY24, Ramsay expects mid-single-digit volume growth in Australia, with initiatives to enhance performance and manage costs.

Insignia Financial's (IFL) shares plummeted 10.6% to $2.60 due to weaker capital markets in the quarter ending June and a fee reduction in its core platforms, leading to a 15% drop in annual net profit to $191 million. Formerly IOOF, the company acquired MLC's financial advice sector for $1.4 billion in 2021.

Over the year ending June 30, its total funds under management and administration rose by 1.5% to $295 billion. The company reduced operating expenses by 5% from the previous year, completing a $218 million cost-out initiative.

This year marks the end of a three-year plan involving the MLC Wealth business acquisition from National Australia Bank.

Dividends decreased by 16.1% from the previous year, with earnings per share dropping to 29¢ from 34.5¢. Despite challenges, the company's statutory net profit surged by 39% to $51 million.

Deep Dive

Qantas Soars With Record Profits & Promising Horizons Await

Qantas announced a record profit of $2.5 billion for FY23 marking the final year for Alan Joyce as the chief executive. Underlying profit stood at $2.47 billion, a significant recovery from the challenges faced during the COVID-19 pandemic, which saw the airline's net debt rise above $7 billion. This surpasses Qantas' previous record of $1.6 billion in 2018 by nearly $1 billion.

Statutory profit was reported at $1.74 billion, a massive change from the $860 million loss from FY22. Revenue surged, doubling to $19.8 billion from $9.1 billion.

The airline announced that it will initiate a $500 million shareholder buyback in September, adding to the $1 billion returned to shareholders the previous year. Employees will receive $500 in-flight credits, and loyalty customers will be awarded frequent flyer points and status credits. Joyce emphasised the airline's robust financial position and highlighted the $1 billion restructuring.

Qantas and other global airlines have rapidly recovered post-pandemic, driven by high travel demand after border relaxations in 2022. Domestic fares are currently 4% higher than pre-COVID levels, while international ticket prices have risen by 10%.

Qantas shares saw a positive response following the announcement of its FY23 results, starting the day strongly before ending 0.8% higher to $6.22.

The airline plans to introduce new aircraft for domestic and international routes, aiming to expand its reach across the Pacific, Europe, and Asia and return to pre-COVID international capacity levels by mid-2024.

A Little Extra

📉 Going Down?

Top 10 shorted stocks on the ASX - as of August 18

1. Core Lithium (CXO) - 11.40%

2. Flight Centre (FLT) - 10.37%

3. IDP Education (IEL) - 9.11%

4. Syrah Resources (SYR) - 9.00%

5. Pilbara Resources (PLS) - 8.70%

6. Lake Resources (LKE) - 8.61%

7. JB Hi-Fi (JBH) - 8.49%

8. Brainchip (BRN) - 7.95%

9. Elders Limited (ELD) - 7.82%

10. Imugene (IMU) - 7.53%

📊Broker Ratings

What do the brokers have to say?

There were several companies with broker rating changes today; see the complete list here

💲Dividends

Companies trading ex-dividend today

1. JB Hi-Fi (JBH) - $1.15

2. Endeavour Group (EDV) - $0.075

3. Platinum Asia Investments (PAI) - $0.025

4. Platinum Capital (PMC) - $0.03

5. Regal Asian Investments (RG8) - $0.05

6. Capral (CAA) - $0.20

7. Baby Bunting Group (BBN) - $0.048

📅 Economic Calendar

Data to keep an eye on this week

DISCLAIMER: None of the information provided in this newsletter should be constituted as financial advice. This newsletter is strictly for educational purposes only. It should not be taken as investment advice or a solicitation to buy or sell assets or make financial decisions. Please do your research.