AU Morning Wrap: ASX Opens 1% Down, Telstra Drags Communications Sector Lower

Stocks dipped and government-bond yields reached a 15-year high after minutes from the most recent Federal Reserve policy meeting showed central bankers are worried about a possible resurgence in inflation.

The 10-year Treasury yield settled Wednesday at 4.258%, its highest close since June 2008, from 4.220% a day earlier.

Early in trade, the communications services sector was the worst performing, led by Telstra which fell 2.1 per cent. In its latest annual report, the nation's biggest telecoms group said it would hang onto its InfraCo Fixed business for the time being as it delivered a 13 per cent rise in annual net profit to $2.05 billion.

Origin Energy jumped 1.3 per cent. The takeover target has forecast further improvement in earnings in its energy markets business for one further year after posting an 83.5 per cent increase in full-year core net profit.

Evolution Mining was down 3.4 per cent amid the gold miner's full-year profits collapsing 49 per cent to $163.5 million due to severe floods at its Ernest Henry project in northern Queensland.

Liontown Resources has gained 2.2 per cent after being awarded an underground mining services contract valued at about $1 billion over four years.

Nuix reported has slumped 6.3 per cent. The tech stock recorded a 19.8 per cent rise in statutory revenue to $182.5 million over the past year,

Australia's largest communications provider on Thursday reported earnings before interest, tax, depreciation and amortization for the 12 months through June of 7.86 billion Australian dollars ($5.05 billion), compared with A$7.26 billion a year ago.

Net profit after tax was down 1.2 per cent to $185 million for 2022-23, although sales were up 4.9 per cent to $4.3 billion. Chief executive Brian Lowe said the local wine bottle manufacturing business suffered from the fall-off in the lower-priced commercial wine sector, but demand for slimline cans for soft drinks, kombucha and other products was strong.

Despite the jump in new customer sign-ups, multi-year deals fell from 40 per cent to 30 per cent for FY22. Nuix, which sells investigative software for large enterprises, narrowed its losses to $5.6 million for the year, down from $22.8 million a year earlier.

But the company, which owns the Domain property website and is 60 per cent owned by Nine Entertainment (the publisher of The Australian Financial Review), kept revenue almost flat, at $345.7 million – 0.5 per cent down on last financial year. Earnings before interest, taxation, depreciation and amortisation fell 13 per cent to $108.6 million.

The contract is valued at about $1 billion over four years, comprising operating costs, sustaining capital and early enabling works for the planned 4 million tonne a year expansion.

The tender and award covers all aspects of underground construction, including early capitalised development and production across the Mt Mann and Northwest Flats orebodies.

The miner closed the project in April for up to 6 weeks to mend flood damage, resulting in $160 million of lost revenue and $24 million of incremental recovery cost.

The downward swing, from a $115 million statutory net profit in the previous year, was due to $102 million of fair valuation losses booked on its investment properties that occurred in the second half of the 2023 financial year.

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