Profits good but outlook poor; KPMG cuts jobs; 3m Teslas recalled

Profits good but outlook poor; KPMG cuts jobs; 3m Teslas recalled

News in brief

Petrol and diesel supplier Ampol was the standout profit result yesterday with its June half bottom line five times higher than a year ago. The group quadrupled its half year dividend payout.

 

KPMG will cut its workforce by five per cent and drop partner pay by 13 per cent, as the fall-out from the document misuse scandal filters through the firm. Falling demand for the group’s services triggered the staff lay-off decision.

 

A sacked Aldi store assistant who used AI to make an argument that he was unfairly dismissed has been forced to pay $1230 toward the supermarket’s legal costs in the first ruling effectively punishing a former employee for wasting the Fair Work Commission’s time.

 

Nearly 3 million Teslas, made and sold in China, have been recalled over concerns that the minimalistic retractable door handles are difficult to locate and open in emergency situations.

 

The Panama Canal Authority will limit the number of daily ship transits from next month because of a lack of rainfall amid an intensifying El Niño weather pattern.

Fear-o-meter

Westpac’s Kaitlyn Buhariwalla on the Aussie dollar 

 

The Australian dollar's steady climb became a sprint late last week, jumping 0.85 per cent on Friday to fresh current leg highs near 0.7180. What had been a measured grind higher accelerated more emphatically, with the Australian dollar moving into the high 0.71s in just a few sessions.

 

Unlike Jan/Feb's rallies, this move is not being driven by a hawkish RBA story or stretched positioning. Instead, support is coming from a weaker USD backdrop, rising gold prices, strength across Asian currencies and Australia's mining dividend season.

 

Treasury Secretary Scott Bessent's announcement to expand Treasury bond buybacks, combined with escalating sanctions rhetoric towards Iran, reinforced concerns around the long-term outlook for the US dollar and helped propel AUD/USD to fresh cycle highs.

Fear & Greed Q+A today

On the gold miner's full-year results, including why it wants more copper, and why Evolution is returning cash to shareholders rather than chasing acquisitions:

 

“As a company over the years we've bought – so all of the assets we're operating today, we've bought over the last 11 years – and we've sold assets. So we do do the M&A piece.

 

The last couple of years our focus has heavily been on investing in our existing assets. And with the cash that we're generating, we've always said to shareholders if we have no need to use those funds to buy assets, we'll return the funds to you, and when we find the right asset, we will come and borrow that money back from you. And it sits very well with our shareholders.

 

So we generated $1.4 billion of free cash this year after investing $1.1 billion in our business. And we've said to our shareholders, we will give you $835 million back as dividends and keep the balance for either reinvesting in the business or, if we find the right asset, we may look to buy that.”

The June half earnings season is now about two-thirds complete and while profits are higher in aggregate, there is growing disparity between the good and the bad on the market.

 

The proportion of results beating expectations are running ahead of misses but only marginally at 33 per cent versus 30 per cent. And the number of beats is less than the norm, but so too is the number of misses.

 

Just over 70pc of companies have announced higher earnings on a year ago and three in five have increased their dividends, according to AMP numbers.

 

Perhaps most telling is that earnings estimates for the 2027 financial year have been cut by about two percentage points.

 

And there has been plenty of stock volatility. Across the market, 58 per cent of companies have moved up or down by more than five per cent on their earnings day, according to Goldman Sachs, as reported in The Australian.

Greed-o-meter

	Restaurant	Customers
1	McDonald's	11,347,000
2	KFC	10,341,000
3	Hungry Jack's	6,268,000
4	Domino's Pizza	5,173,000
5	Subway	4,543,000
6	Guzman y Gomez	3,557,000
7	Red Rooster	3,282,000
8	Grill'd	2,674,000
9	Pizza Hut	1,836,000
10	Oporto	1,682,000

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McDonald’s and KFC still dominate Australia’s fast-food landscape, but there’s a sizeable gap between the biggest chains and the rest. More than 11 million Australians ate at or ordered takeaway from McDonald’s in an average six-month period, with KFC not far behind, according to Roy Morgan.

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Source: Roy Morgan