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ASX 200 (XJO) drops, WHSP (ASX:SOL) and Brickworks (ASX:BKW) report

The ASX 200 (ASX: XJO) is currently down 1% after the NASDAQ 100 (NDX) fell 3% overnight.

Two ASX 200 companies reported their result today:

Brickworks Limited (ASX: BKW)

Brickworks reported its FY20 result today, it said that its (continuing) revenue increased by 4% to $953 million.

Underlying EBITDA (click here to learn what EBITDA means) dropped 19% to $281 million and underlying EBIT fell 34% to $206 million.

Underlying net profit plunged 38% to $146 million. However, statutory profit soared 93% to $299 million.

Brickworks explained that its Australian building products division was resilient with revenue only down 9% to $687 million, but EBIT was $33 million, down 43%. The company implemented shutdowns across its network in March and April to prevent stock building. Austral Bricks earnings on the east coast was particularly resilient, with higher earnings in Queensland, SA and Tasmania.

The US division is seeing more disruption than Australia. For Brickworks, it benefited from owning its US acquisitions for a full year. The North American division delivered EBIT of $10 million, up 63% and EBITDA of $27 million, up 122%. This result was hampered by COVID-19 impacts. Management still believe these operations provide Brickworks with additional diversification and strong prospects for growth over the long term.

The property trust generated EBIT of $129 million, largely thanks to the joint venture with Goodman Group (ASX: GMG). All property trust assets were revalued during the year and this resulted in a revaluation profit of $53 million. A development profit of completed facilities at Oakdale South also contributed $25 million in earnings. The trust’s net rental income rose by 15% to $30 million with rent reviews and new developments. Brickworks’ share of net assets was $727 million, up $94 million.

Brickworks declared a final dividend of 39 cents per share, an increase of 3%. That brought the full year dividend to 59 cents per share, an increase of 4%.

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL)

It reported its FY20 result today.

WHSP reports regular profit after tax, which represents continuing operations before non-regular items. It represents WHSP’s share of the profit from its underlying investments.

WHSP reported that FY20 group regular profit after tax was down 44.7% to $169.8 million. There were three main reasons for this: New Hope experienced falling coal prices and lower Acland production, COVID-19 related impacts hurting the Brickworks building products earnings and TPG Telecom Ltd (ASX: TPG) earnings were impacted by merger account and the NBN migration of subscribers.

WHSP reported that its statutory profit after tax rose 284.3% to $953 million. This was largely due to the TPG merger with Vodafone. Previously, TPG counted as an associate investment of WHSP  – that meant that the TPG share price movement didn’t affect the accounting profit each year – positively or negatively. However, because it’s no longer an associate investment due to WHSP’s holding falling to 12.6% of the combined TPG-Vodafone, WHSP recognised a non-accounting gain of $1.05 billion this year.

The investment house boasted that its net asset value outperformed the S&P/ASX All Ordinaries (ASX: XAO) by 6.9%. However, the share price + dividend return (‘total shareholder return’) was -11.4%, underperforming the index by 2.4%.

Net cash flows rose 48.8% to $252.3 million largely thanks to the special dividend paid by TPG due to the merger. This is essentially the cashflow paid to WHSP from its subsidiaries and from the dividends of its investments, and after paying costs.

The investment house continued its dividend record. It has now increased its dividend for 20 years, going back to 2000. It has declared a final dividend of 35 cents per share, a 2.9% increase. That brings the total dividend to 60 cents per share – up 3.4%.

Other news

The team over at Rask Media have covered the rest of today’s news, so make sure you head over there for more ASX share market coverage.

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