There are some S&P/ASX 200 Index (ASX:XJO) shares that haven’t recovered from the COVID-19 crash yet like A2 Milk Company Ltd (ASX:A2M).
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There are a few S&P/ASX 200 Index (ASX: XJO) shares that are actually materially lower than they were a year ago at the bottom of the crash.
Some of them have seen their ups and downs, but a year on from the bottom of the COVID-19 crash they are still down quite substantially.
Let’s look at the three that are down the most:
A2 Milk Company Ltd (ASX: A2M)
The A2 Milk share price is down around 45% over the past year. Despite initially having a strong performance because of the elevated levels of consumer buying and pantry stocking, things have gone wrong for the infant formula business as demand dropped off.
A2 Milk has explained a number of times that the drop in performance is due to the daigou and cross-border e-commerce (CBEC) channels being significantly impacted due to disruption resulting primarily from COVID-19-related issues. Issues include pantry de-stocking, reduced tourism from China and international student numbers because of travel restrictions. Subdued online pricing also isn’t helping.
The ASX 200 share is trying to re-activate the daigou channel.
FY21 half-year revenue was down 16% and it’s now expecting total revenue to be in the order of NZ$1.4 billion. This assumes a strong recovery in the fourth quarter.
AGL Energy Limited (ASX: AGL)
The AGL share price has dropped by around 36% over the past year.
AGL has been suffering from a “sharp decline” in wholesale prices for electricity and large-scale renewable certificates, lower gross margins in wholesale gas, higher costs associated with the COVID-19 pandemic and increased depreciation expenses after recent investments. There was also a $25 million hit relating to the outage of unit 3 of the Liddell Power Station.
All of the above saw the ASX 200 share report a statutory loss of $2.29 billion, which included $2.69 billion of onerous contract provision and impairment charges.
AGL is expecting to report underlying profit after tax of between $500 million and $580 million in FY21. It’s looking for cost reductions, amounting to around $150 million in FY22. It is also trying to deliver a $100 million reduction in sustaining capital expenditure by FY23.
TPG Telecom Ltd (ASX: TPG)
The TPG share price is down by 23% over the last year.
TPG is working through the merger between Vodafone Hutchison Australia and the old TPG. It is still suffering from the impacts of the NBN which is harming margins. There’s also the impact of COVID-19, especially global travel restrictions, ongoing mobile competition as well as regulatory challenges.
The telco ASX 200 share said that, on a pro forma basis, which calculates figures to simulate what the result would have been if the merger had been effective throughout 2020 and 2019, it showed revenue decreased by 6% to $5.52 billion and EBITDA decreased by 10% to $1.79 billion.
However, the company said that it has confidence in a recovery from COVID as the 5G rollout ramps up in major cities and it’s also testing fixed wireless services.
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. 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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