Lending Association

Australian December half-year reporting season kicks off with surprises

The Australian December half-year reporting season has begun with a flurry of activity, showcasing a mix of positive surprises and anticipated challenges for investors. Nearly 50 ASX 200 companies are set to report, with major players such as the Commonwealth Bank and JB Hi-Fi leading the charge.

Among the notable highlights so far, medium-sized furniture group Nick Scali and department store chain Myer have both delivered better-than-expected results, signaling resilience in certain sectors despite broader economic headwinds. Additionally, Cochlear has impressed with significant revenue and earnings gains ahead of its interim figures release, while Boral has shown a sharp improvement under the control of Kerry Stokes.

AGL also exceeded expectations with a robust interim result, offering potential good news for Origin Energy and setting a positive tone for the energy sector. However, challenges loom for industries such as energy and resources, with forecasts suggesting a tough road ahead, particularly for the lithium and nickel sectors.

Investor sentiment has been buoyed by the stronger-than-anticipated reports from key players like Boral, AGL, Cochlear, Myer, and Nick Scali, indicating cautious optimism for the remainder of the reporting season. Despite Reserve Bank Governor Michell Bullock’s recent comments on rate cut timing, investors remain focused on company performance amid ongoing economic uncertainties.

According to AMP’s chief economist, Shane Oliver, consensus expectations point to a 5.4% decline in earnings for 2023-24, reflecting broader economic slowdown and energy profit declines. However, Oliver predicts strong gains in sectors such as utilities, healthcare, and industrials, with a keen eye on consumer resilience and cost-cutting measures.

Upcoming reports this week include a diverse range of companies, including Aurizon, Beach Energy, CSL, Seek, James Hardie, Seven West Media, Breville, and Challenger. Key players reporting on Wednesday include AMP, CBA, Domain, and Vicinity Centres, while Thursday’s lineup features Origin, Treasury Wines, Wesfarmers, and others.

One particularly noteworthy report to watch is from American company Albemarle, a major lithium group expected to reveal weak results and cautious forecasts amid project cuts and cost-saving measures. As the reporting season unfolds, investors will be closely monitoring company guidance and market trends for insights into the broader economic outlook.