Reporting Season Road Map: 25 February 2020

About the author:

Andrew Tang
Author name:
By Andrew Tang
Job title:
Analyst - Equity Strategy
Date posted:
25 February 2020, 9:42 AM
Sectors Covered:
Equity Strategy and Quant

Australian Finance Group - NIM shoots the lights out

AFG has reported 1H20 NPAT of $18.3m. While this is 0.6% less than we expected, we estimated that it is ~11% better than the consensus expectation. An interim dividend of 5.4cps (ff) has been declared, in line with our expectation. AFG's earnings growth prospects are supported by an improved outlook for residential mortgage settlements and strong growth in the Link product. The dividend yield prospects are supported by strong cash flow generation. AFG had unrestricted cash of $50.4m sitting on the balance sheet at Dec-19.

We upgrade our recommendation to Add, however, we point out that this stock may not suit investors worried about the fickleness of RMBS markets.

Morgans clients can login to view our share price target and detailed research note.

Cooper Energy Ltd - Market jittery at starting line

An impressive half from COE, posting H1'FY20 underlying EBITDAX of A$16.3m (vs Morgans A$15.6m), with a reported NPAT of A$6.3m and underlying NLAT of -A$2.0m (vs Morgans A$1.4m). 2C resource on Annie discovery of 8.9mmboe (or 4.6mmboe COE share), set to be developed and tied back to the Minerva gas plant. An important reminder, Sole is fully contracted on term supply to 2025, with 87% of total COE planned production to 2022 under take-or-pay contracts. Gas now in Orbost with full commissioning anticipated in March 2020.

We maintain our Add rating on COE, seeing recent weakness as an opportunity on market jitters around spot prices just ahead of Sole's planned March start-up.

Morgans clients can login to view our share price target and detailed research note.

More information

Morgans clients can access our latest reports on Australian Financial Group (AFG) and Cooper Energy Ltd (COE) in the research section. Alternatively, please contact your nearest Morgans office for access.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.


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