ASX 200 drops over 1%, Appen holds its AGM

The ASX 200 (ASX: XJO) is currently down by more than 1% in a negative end to the week.

Troubling tensions are brewing between China and the West about COVID-19 and particularly the ongoing developments with Hong Kong.

Appen’s (ASX: APX) annual general meeting

Appen is holding its AGM today and said that its major customers are experiencing high usage. It’s business as usual based on current information. A slowdown in digital advertising spending is having minimal impact on Appen’s major customers so far. However, the economic downturn may affect smaller customers.

Not only is Appen’s earnings doing well, but Appen’s balance sheet remains strong. It has a cash balance of over $100 million. It also has an undrawn working capital facility which is available. Appen continues to see “healthy cashflow and conversion” whilst having low capital requirements.

In terms of guidance, Appen said that year to date revenue plus orders in hand for delivery in FY20 of around $350 million at May 2020.

The ASX 200 company’s full year underlying EBITDA (click here to learn what EBITDA means) is expected to be in the range of $125 million to $130 million at an estimated foreign currency exchange of AU$1 to US$0.70 for the year.

Appen did say it’s reviewing its capital management priorities, including the dividend policy.

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Costa (ASX: CGC) is also holding its AGM

Costa is trying to create a new range of blueberries suited to low latitude environments including China and Morocco. It’s also expanding its premium Arana variety.

Citrus remains a strong performer and new automation technology has been installed in a warehouse.

Continuing tree maturity will help the volume growth and tray volumes increase. It’s still targeting a production target of 2 million. Export opportunities are opening up.

The Monarto mushroom facility expansion will be important for that category.

In Morocco it’s trying to expand its blueberry growing season and in China blueberries are “proving highly popular”.

The ASX 200 company isn’t providing guidance, particularly due to COVID-19. But the company seems to be seeing better conditions, with higher than average rainfall. There is “excellent water security” across all sites.

ASX banks give up some of the gains

After a huge week for the ASX banks, they are losing some of their gains. CBA (ASX: CBA) shares are almost flat.

But the share prices of Westpac (ASX: WBC), ANZ (ASX: ANZ) and NAB (ASX: NAB) are down 4%, 3% and 3.8% respectively.

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