Company Updates

We look at Privium Group’s recently published results for the six month period ended 31 December 2020.

In this report, we look at how outstanding RMBS transactions have performed since issuance and how protection mechanisms have behaved as except.

On 25 February 2021, Sunland Group (Sunland, Company) released its financial results for the six month period ended 31 December 2020 (1H21).

WA Stockwell (WAS, Company) released its FY20 results for the 12 month period ended 30 June 2020. Results were sound, with the Company reporting revenue growth for its four main operating segments.

On 28 November 2020, independent gas storage operator, Rockpoint Gas Storage (Rockpoint, Company), released its first half (1H21) results for the period ended 30 September 2020. Overall, the results were solid with 1H21 total realised revenues of USD54.3m, more than double the USD26.1m reported in 1H20. Adjusted EBITDA increased to USD34.3m, up from (USD0.3m) in 1H20, primarily attributable to much stronger fee-based revenues.

SCT Logistics (SCT or the Company,) recently provided its full year results for the period ended 30 June 2020 (FY20). Despite material negative impacts from bushfires in the first half of the year, SCT reported FY20 revenues of AUD377m and adjusted EBITDA (excluding AASB16 impact) was in line with expectations at AUD35.1m. Throughout the COVID-19 pandemic, the SCT business was declared an essential service as the Company moves a significant portion of grocery products for all of the supermarkets on both the North-South and East-West rail routes

On 18 November 2020, Lucas Total Contract Solutions (Lucas, Company) released its operational and financial update covering the quarter ending 30 September 2020 Overall, the update was positive, with solid financial performance as well as key contract wins.

On 9 November 2020, Peabody Energy Company (Peabody, Company) announced its third quarter (3Q20) results which showed improvements on the two prior quarters but overall remained weak. 3Q20 revenues were USD671m, down 39% on 3Q19 results, reflecting the impact of a decrease in volumes in the Powder River Basin which was compounded by challenging U.S. industry conditions and weak commodities prices. In conjunction with the results release, Peabody provided an update on a number of financing issues and included some details on a proposal to noteholders, which remains subject to ongoing discussions.

Given the cost recovery nature of NCIG’s operating and financial operations, a traditional financial analysis of results is not relevant since the company aims to simply recover the costs it is incurring rather than seek to generate a profit for its shareholders. Saying that, on all measures, NCIG performed strongly in the year ending 30 June 2020. During the period, NCIG shipped about 54.5m tonnes of coal, up from 53Mt in FY19. Given the revenue recovered during the period, this equated to a cost to shippers of ~USD5.60 per tonne shipped (or under USD4.50 per tonne of capacity).

Eric recently provided an update on its financial results for 1Q21, reporting an unaudited statutory profit after tax of AUD0.6m (compared with a loss after tax of AUD(0.9)m in the prior corresponding period). The reported underlying trading profit--a measure of underwriting profitability excluding nonrecurring items--was AUD2.0m. New policies were up modestly quarter-on-quarter reflecting the slow recovery, although stronger outcomes will be clearly dependent on the pace of recovery in Australia (as well as the supply of new motor vehicles). The strength of Eric’s balance sheet continues to improve, with Eric’s total capital ratio remaining substantially above regulatory requirements.

On 20 October 2020, Sunland Group (Sunland, Company) provided an update to its long term strategy following a review of its operations.

On 12 November 2020, Ovato released an update on the ASX in relation to the initiatives the Company has been pursuing to reset its capital structure to a more sustainable level.

On 30 September 2020, Oasis Petroleum Inc. (OAS, Company) along with certain subsidiaries, announced it had sought Chapter 11 protection under the relevant provisions of the US Bankruptcy Code. In our view, this is not surprising given the extremely challenging operating environment the Company has experienced since the oil price crashed in mid-March that resulted in uncertainty about covenant compliance on its revolving credit facility (which we flagged in our April and August reports).

On 23 September 2020, Nufarm reported its FY20 results for the period ending 31 July 2020. The company reported revenues and EBITDA from continuing operations of AUD2.85bn and AUD236m, respectively. While revenues were up 6.5% on the prior year due, EBITDA fell 21% year-on-year in large due to a decline in European earnings and a weak first half in North America which offset earnings growth in Australia and New Zealand and Asia.

Eric Insurance (Eric, Company) reported a statutory net loss after tax of AUD(7.7m) for the year ended 30 June 2020 (FY20). This compares with a statutory net loss after tax of AUD(0.39m) in the prior year. Results were unfavourably impacted by lower gross written premiums through the continued decline in new car registrations and the significant impact of COVID-19 in the last quarter of FY20, as well as a number of material non-cash items. The underlying insurance trading result--a measure of underwriting profitability excluding nonrecurring items, as produced by the Company--was 21% lower in FY20 at AUD10.9m. Importantly for noteholders, and despite market turbulence in March 2020, Eric’s Tier 1 regulatory ratio managed to remain broadly unchanged at 123.2%, above a required level of 80%.

Omni Bridgeway Limited (OBL) reported a net profit after tax of AUD17.6m for the year ended June 30, 2020. This compares with a net loss after tax of AUD(36.1m) in the prior corresponding period. The turnaround in profit was underpinned by the successful resolution of a number of cases in favour of OBL, generating revenue of AUD275.5m (compared with AUD35.0m in the prior corresponding period). This is OBL’s highest reported level of earnings from litigation cases in its history. Cash and net receivables increased by 44% to AUD325m.

Zip Co Limited, the listed parent entity of zipMoney Payments Pty Limited, the originator, servicer and trust manager of the zipMoney Trust 2017-1 (Warehouse) reported a loss of AUD(20.0)m for the 12 months ended 30 June 2020, although this should come as little surprise. Despite the headline loss, underlying momentum remains unwavering. Portfolio income was 92% stronger to AUD159.4m, with cash gross profit up 85% to AUD79.4m. Outstanding receivables were 72% higher at AUD1.1bn. The underlying pool of assets supporting the Warehouse continues to perform well and in line with the required parameters. Arrears and bad debts have drifted higher, as expected in the current environment. Despite this, credit enhancement remains considerable.

On 21 August 2020, MyState Limited announced its results for the year-ended 30 June 2020 (FY20), reporting a statutory net profit after tax of AUD30.1m, down 3.0% on the prior corresponding period. MyState’s capitalisation remains sound and unchanged, with the company reporting a Common Equity Tier 1 (CET1) ratio of 11.07% (albeit, toward the lower-end of peers).

On 21 August 2020, Suncorp Group Limited (Suncorp), the non-operating holding company for AAI Limited (the main insurance operating subsidiary for Suncorp’s Australian insurance operations) and Suncorp-Metway Limited (its banking operations), announced its results for the year-ended 30 June 2020 (FY20), reporting a statutory net profit after tax AUD913m.

In mid-August 2020, Next Generation Clubs Australia (Next Gen, Company) provided a trading update. Since July, all clubs have transitioned to an ‘opt-out’ status, with all memberships being reinstated. Membership activation is now at 84% of pre-COVID levels across all its clubs. In addition, operating costs have also increased, correlated with the increase in activity.