The S&P/ASX Index (ASX:XJO) went up by 0.5% today. Commonwealth Bank of Australia (ASX:CBA) reported its HY21 result.
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The S&P/ASX 200 Index (ASX: XJO) went up by around 0.5% today to 6,857 points.
Here are some of the highlights from the ASX:
Crown Resorts Ltd (ASX: CWN)
The Crown Resorts share price fell by more than 3% today after the casino operator was deemed to be unsuitable to operate the new casino in Sydney.
Commissioner Patricia Bergin delivered a 750 page report that made recommendations about various leadership figures that should leave the business, as well as other changes such as improved business operations relating to crime.
Some directors have already left the business. Crown announced earlier today that both Guy Jalland and Michael Johnston have resigned from Crown.
One of the issues identified by the review was the power that the Packer family wielded as a major shareholder.
Commonwealth Bank of Australia (ASX: CBA) FY21 half-year result
The CBA share price fell 1.5% today after the major bank reported its FY21 half-year result.
For the six months to 31 December 2020, the big bank generated $4.88 billion of statutory net profit after tax (NPAT). Cash NPAT was $3.89 billion, down 10.8% compared to the prior corresponding period.
The big four bank explained that NPAT was supported by strong business outcomes but impacted by the low interest rate environment and COVID-19. The statutory NPAT includes the gains on the sale of divestments, including the completion of BoComm Life.
CBA said that its loan impairment expense increased by $233 million compared to the prior corresponding period to $882 million. The provision coverage ratio to credit risk weighted assets was 1.81%. This was increased to reflect the uncertain economic outlook and emerging industry risks, in particular for the aviation and entertainment, leisure and tourism sectors.
In terms of consumer arrears, CBA said that arrears on home loans and consumer finance remain low, and are currently being insulated by COVID-19 support measures. APRA’s regulatory approach is that loans currently in deferral as part of COVID-19 support packages are not included in arrears. At 31 January 2021, approximately 25,000 home loans were in deferral (with a balance of $9 billion), down from 145,000 homes loans at 30 June 2020 which represented a balance of $51 billion.
The bank’s operating income was down slightly, though the net interest income was flat with strong volume growth across core banking businesses helping to offset the impact on the net interest margin (NIM) of lower interest rates and heightened competition. The NIM decreased by 10 basis points compared to the prior corresponding period, due to higher liquid assets and the impact of the low rate environment on deposit margins and earnings on capital.
Operating expenses increased by 2.3% excluding $241 million of remediation costs. There was a higher investment spend, with an increase of 34%, with continued investment across the business driven primarily by increased investment in digital areas.
Turning to the common equity tier 1 (CET1) capital ratio, it was 12.6%, up 100 basis points from 30 June 2020. This was above APRA’s ‘unquestionably strong’ benchmark of 10.5%. This increased from organic capital generation from profit generation as well as from the proceeds from the sales of businesses like BoCommLife and CommInsure Life.
The CBA board of directors decided to declare an interim dividend of $1.50 per share, fully franked. That was a 25% decrease on the FY20 half-year dividend, but it was a 53% increase on the second half of FY20.
Megaport Ltd (ASX: MP1)
The Megaport share price went up around 7% after reporting its FY21 half-year result.
The cloud technology business said that its monthly recurring revenue (MRR) increased by 11% to $6.3 million, with annualised revenue also increasing by 11% to $75 million.
Megaport’s total number of customers rose by 11% to 2,043, the total number of ports went up 16% to 6,691, the total number of services went up 15% to 19,278 and the total installed data centres increased 5% to 386.
Globally, revenue went up 39% to $36 million, with North America revenue growing 51% to $17.2 million Asia Pacific revenue increased 31% and European revenue rose 30% to $6.5 million.
Megaport reported that its profit after direct network costs rose 38% to $18.2 million. With operating expenses only rising 15% to $27 million, normalised earnings before interest, tax, depreciation and amortisation (EBITDA) went up 15% to a loss of $8.67 million. However, the net loss after tax worsened by 103% to $38.4 million.
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Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends MEGAPORT FPO. The Motley Fool Australia has recommended Crown Resorts Limited and MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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