Australian sharemarket barely changed after investors digest bumper day of corporate earnings reports

The Australian sharemarket pulled back slightly from record highs as investors digested a jam-packed day of earnings reports, with a major miner and bank weighing on the bourse, while a retailer’s trading update proved particularly intriguing.

The S&P/ASX200 closed just 3.9 points lower at 7588.2 while the All Ordinaries Index dipped 5.9 points to 7860.5.

CommSec analyst Steve Daghlian noted it came after a remarkable 11-month positive run, with fresh records set multiple times recently.

A major weight on the market was unsurprisingly Rio Tinto, which went ex-dividend with its biggest shareholder payout ever.

Mr Daghlian said $7.60 per share was more than three times what the miner paid investors a year earlier.

“This is about 5.9 per cent of its share price, hence the tumble today,” he said.

Rio fell 6.88 per cent to $120.26 while BHP firmed 0.9 per cent to $52.99.

Another big weight was Commonwealth Bank, which gave up 2.12 per cent to $105.88 after Citi slapped a sell recommendation on it, with a target price of $94.50, saying it saw better value with the other major banks.

ANZ added 0.4 per cent to $29.35, Westpac inched one cent lower to $25.76 and National Australia Bank gained 0.18 per cent to $27.27 after booking a $1.65bn unaudited statutory net profit for the June quarter, up from $1.5bn for the same period last year.

Australian sharemarket barely changed after investors digest bumper day of corporate earnings reports

Camera IconMyer says it expects to return to second half profitability for the first time in four years. Andrew Henshaw / NCA NewsWire Credit: News Corp Australia

After Myer’s major shareholder demanded a trading update ahead of a planned board overhaul, the department store chain revealed it expected to return to second half profitability for the first time in four years.

Solomon Lew’s Premier Investments had been pointing to Myer’s net loss last year in its push to install two of its nominees to the board along with other candidates it had been in talks with, but says it has no current intention of launching a takeover offer.

Myer shares leapt 9.57 per cent to 51.5 cents.

Premier, which owns brands including Smiggle and Peter Alexander, rose 3 per cent to $27.15.

Telstra reported a “turning point” in its financial performance, booking a 3.4 per cent rise in full-year net profit to $1.9bn and saying the underlying business would return to full-year growth in 2021-22.

But the continuation of “NBN headwinds” was a negative, Ord Minnett said, with both fixed enterprise and fixed wholesale experiencing higher than expected declines.

Telstra also announced shareholders would receive up to $1.35bn in the form of an on-market buyback and declared a final dividend of 8 cents per share.

Telstra shares climbed 3.66 per cent to $3.97.

Australian sharemarket barely changed after investors digest bumper day of corporate earnings reports

Camera IconTelstra reported a ‘turning point’ in its financial performance. Bianca De Marchi / NCA NewsWire Credit: News Corp Australia

Financial services giant AMP reported $181m in first half underlying net profit – which strips out non-recurring revenue and expenses – up from $115m for the same period last year.

Citi said the result was below estimates, while Ord Minnett said a key positive was strong bank trends, with good growth in loans.

But there was disappointment AMP did not declare a dividend.

“Most would have expected a return to dividends in FY21 as previously foreshadowed,” Ord Minnett said.

Shares in AMP gained 3.24 per cent to $1.11.

Insurer QBE booked a first half statutory net profit of $441m, compared with a net loss of $712m for the prior period, saying there had been a material turnaround in both underwriting and investment returns.

“Insurance groups have broadly been able to increase their margins this year with people off the roads and out of the streets,” OMG chief executive Ivan Tchourilov said.

Moody’s Investors Service vice-president Frank Mirenzi said the much improved results were driven by very strong premium growth and a favourable development of reserving for prior years’ claims.

Shares in QBE jumped 8.12 per cent to $12.51.

Australian sharemarket barely changed after investors digest bumper day of corporate earnings reports

Camera IconThere was disappointment AMP did not declare a dividend. Steven Saphore / NCA NewsWire Credit: News Corp Australia

Engineering group Downer EDI reported a 21.4 per cent rise in full-year underlying net profit to $261m, saying its urban services businesses performed well.

Ord Minnett described the result as strong.

Downer EDI shares lifted 4.15 per cent to $5.77.

Industrial property giant Goodman Group delivered a near 54 per cent leap in full-year statutory profit to $2.3bn, saying it was enjoying high occupancy, rental growth and strong investment returns.

Moody’s Investors Service senior vice-president Matthew Moore said demand for Goodman’s assets and developments remained robust as logistics and data storage benefited from changing consumer behaviours, increased data usage and greater focus on supply chains.

Shares in Goodman declined 2.25 per cent to $22.64.

GrainCorp rocketed 11.7 per cent to $6.11 after substantially upgrading its full-year guidance thanks to “excellent” demand for high quality Australian grain.

Australian sharemarket barely changed after investors digest bumper day of corporate earnings reports

Camera IconGrainCorp says demand for Australian grain is very strong. Credit: Supplied

AGL booked a $2.05bn full-year statutory net loss, a whopping reversal of fortunes from a $1.007bn net profit previously, blaming lower wholesale electricity prices, reduced electricity generation output at peak periods and the roll-off of legacy supply contracts in wholesale gas.

“This might come as a shock to anyone who has looked at their electricity bill lately, since we pay some of the highest energy prices in the world,” Mr Tchourilov said.

Shares in AGL, which is planning a radical demerger focused on lower carbon-emitting energy sources, slumped 5.53 per cent to $7.18.

Property developer Mirvac posted a 61 per cent jump in full-year statutory profit to $901m, saying momentum had accelerated “right across the business”.

Mirvac shares edged 0.67 per cent lower to $2.98.

The Aussie dollar was fetching 73.64 US cents, 53.08 British pence and 62.69 Euro cents in afternoon trade.

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