Weekly wrap: earnings season leaves ASX 200 higher

The final day of profit reporting saw the Australian share market jump higher as investors digested the final flurry of results.

By the close the ASX 200 was up 0.6% or 46.8 points to 8091.9 points, with eight of the 11 sectors rising and the market up 0.9% for the week.

Industrials performed strongly, up 1.7%, as contractor Downer EDI (ASX: DOW) shares jumped 17% to $5.59 after the company turned around last year’s write-down ridden $386 million net loss into an $82 million annual profit.

Higher crude oil prices also drove the energy sector higher, with Woodside Energy (ASX: WDS) shares were up 2.1% to $27.19 and Santos (ASX: STO) up 0.8% to $7.22.

Bad news for Star Entertainment

There was plenty of corporate news around with the release of a scathing review about the performance of Star Entertainment (ASX: SGR) commissioned by the NSW casino regulator.

Star shares had been halted and its full-year results were not released as expected, with the NSW casino regulator saying it needed more time to decide what to do about the struggling gaming giant.

Consumer discretionary stocks were dragged down by Harvey Norman (ASX: HVN) shares which fell 6.3% to $4.58 after the retail giant’s profits disappointed.

Net profit slumped by 35% to $352.5 million but it kept its final dividend payout steady at 12c a share.

Bank leaders talk as their shares rise

Some interesting testimony from some banking heads before the House of Representatives economics committee nevertheless saw share prices rise.

National Australia Bank (ASX: NAB) shares were up 0.6% to $38.17, ANZ (ASX: ANZ) was up 1.2% to $30.40, CBA (ASX: CBA) rose 0.5% to $139.50 and Westpac (ASX: WBC) was up 0.5% to $31.24.

National Australia Bank’s new chief executive Andrew Irvine said big divisions in the performance of Australia’s economy were making it more difficult for the Reserve Bank to set appropriate interest rates.

He also supported a push to ban debit and credit card surcharges, arguing they are opaque and that the fees charged to merchants should be considered part of the normal cost of running a business.

ANZ chief executive Shayne Elliott admitted that he and other senior executives will lose their bonuses because evidence of systemic misconduct on its Sydney trading floor had inflicted significant “reputational damage” on the lender.

“We have suffered reputational damage,’’ he told the committee.

“That is on me. I accept that there will be consequences.”

TPG shares fly

TPG Telecom (ASX: TPG) was one of the biggest risers, with its shares soaring 8.3% to $4.96 after saying it would cut 120 jobs to save $20 million following a 40% drop in net profit.

Qantas (ASX: QAN) shares also jumped, up 5.3% to $6.71 after posting a $1.25 billion full-year profit on Thursday, which was a 28 per cent decline on the previous year.

Investors were generally positive about Qantas despite its profit fall, thanks to a $400 million on-market share buyback and the probability that it will return to fully franked dividends in the second half of this financial year.

Shares in insurance broker Steadfast Group (ASX: SDF) rose 1.7% to $6.47.

On the flipside, Ramsey Health Care (ASX: RHC) shares plummeted 6.8% to $41.55 after warning that patient growth was expected to slow in the next year.

Mineral Resources (ASX: MIN) stocks continued to fall, down 1.1% to $40.15 after it reported its results with billionaire boss Chris Ellison blaming slow electric vehicle sales for declining lithium prices.

Small cap stock action

The Small Ords index shed 0.35% for the week to close at 3005.8 points.

Small cap companies making headlines this week were:

HyTerra (ASX: HYT)

HyTerra is set to receive a $21.9 million cornerstone investment from Fortescue Future Industries Technologies (FFIT), making FFIT its largest shareholder with a 39.8% stake.

The investment includes 644 million shares at $0.034 each and 322 million free-attaching options, pending shareholder approval.

Proceeds will fund expanded exploration at HyTerra’s 100%-owned Nemaha project in Kansas, increasing its drilling campaign from two to six wells to enhance commercial opportunities in the US Midwest.

A strategic alliance between HyTerra and FFIT will focus on the Nemaha project and potential global ventures.

This investment supports HyTerra’s efforts in white hydrogen exploration, aiming to advance global decarbonisation with lower-cost, low-emission energy solutions.

Galan Lithium (ASX: GLN)

Galan Lithium has signed an offtake prepayment deal with China’s Chengdu Chemphys Chemical for its Hombre Muerto West (HMW) project in Argentina, involving the sale of at least 23,000 tonnes of lithium carbonate equivalent over the first five years.

Chemphys will provide Galan with a US$40 million offtake prepayment facility to support the development of Phase 1 of the project.

The agreement reflects Chemphys’ positive response to high-grade, low-impurity lithium chloride samples from Galan’s HMW pilot plant.

This partnership is expected to be foundational for HMW as it moves towards first lithium chloride production in the second half of 2025.

Chemphys, a leader in lithium processing, values the quality and transparency of lithium supply and anticipates a strong relationship with Galan.

KALiNA Power (ASX: KPO)

KALiNA Power has signed a memorandum of understanding (MoU) with a leading US-based AI-focused data centre developer to supply natural gas-fired power, incorporating CO2 capture and sequestration through its Canadian subsidiary, KALiNA Distributed Power (KDP).

The MoU sets the stage for negotiating a binding project development agreement (PDA) and meeting regulatory requirements.

The influx of data centres into Alberta represents a significant opportunity, and KALiNA’s low-CO2 emissions power projects are well-positioned to meet the growing electricity demand.

The PDA aims to establish a funding framework for non-dilutive project development and long-term power purchasing agreements to attract debt and equity financing.

KDP has also signed multiple non-binding MoUs with natural gas producers to provide the required gas volumes and develop tolling agreements for electricity and CO2 offset credits.

Chariot Corporation (ASX: CC9)

Chariot Corporation and its part-owned subsidiary Mustang Lithium are renewing their ownership of the Horizon and Halo lithium projects in Nevada after Pan American Energy and POWR Lithium chose not to maintain their interests due to a downturn in the global lithium market.

Mustang, with Chariot holding a 24.1% stake, raised approximately $370,000 to cover maintenance fees and retain its claim on the projects, with Chariot contributing $89,000.

The companies plan to continue exploration efforts, building on previous work, including a maiden resource estimate at the Horizon project of 1.3 million tonnes of lithium carbonate equivalent (LCE) in the Indicated category and 8.8 million tonnes in the Inferred category.

The projects are strategically located near major lithium resources, including American Lithium’s TLC project and American Battery Technology’s Tonopah Flats project.

Mustang has also secured all records and drill cores related to the projects as part of the termination process with Pan American Energy and POWR Lithium.

Vection Technologies (ASX: VR1)

Vection Technologies is acquiring Italian generative AI company The Digital Box (TDB) for $12 million to enhance its AI and extended reality (XR) capabilities.

The acquisition involves an upfront payment of 157 million shares, with additional performance rights contingent on TDB achieving specific revenue and EBITDA targets for FY25.

The integration of TDB’s staff and technologies is expected to create cross-sell and growth opportunities, positioning Vection at the forefront of technological advancement.

Former Apple chief operating officer Marco Landi will join Vection’s board of directors following the acquisition.

To support the deal and strengthen its balance sheet, Vection has raised $2 million through a share placement, offering investors additional options.

Felix Gold (ASX: FXG)

Felix Gold has reported new high-grade antimony assays from past drilling at the historic Scrafford mine within the Treasure Creek project in Alaska, revealing significant antimony intercepts.

These results, along with previous high-grade findings, support the company’s focus on developing a large-scale gold-antimony system at Treasure Creek, characterised by high-grade mineralization across multiple prospects.

The Scrafford mine’s historical production of high-grade antimony suggests a potential for low-cost operations using simple processing methods, which could reduce capital expenditure and technical risks.

Preliminary metallurgical work indicates the production of high-quality concentrates with a high recovery rate, enhancing the project’s economic viability.

Felix Gold is exploring near-term antimony production opportunities to add shareholder value and may collaborate with US government agencies to secure the supply chain for this critical metal.

The week ahead

In Australia, around a dozen economic indicators are scheduled but the biggest by far is the national accounts, which many analysts are tipping will show growth in the economy has now dropped below 1% for the past year.

Other releases include home prices, building approvals, job advertisements, balance of payments and lending indicators while the Reserve Bank Governor Michele Bullock will be making two speeches.

Overseas the US market is closed for Labor Day on Monday with the main economic releases around employment numbers.

The main game in the US and globally remains the direction for interest rates with the optimists hoping that the US Federal Reserve will achieve a soft landing by cutting official interest rates beginning in September.

Market prices are now anticipating a full 1% cut in the US Fed’s benchmark rate by the end of the year.

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