Australian Equities sub-portfolio
Incitec Pivot (positive impact) announced that the company’s largest ammonia plant, located in Louisiana, has been back up and running at full capacity since the 30th of June.
This will allow the company to take full advantage of firming ammonia prices.
The plant has had several hiccups over the past year during a major turnaround of the facility. Concerns about the plant have weighed on the company’s share price recently, giving us the opportunity to purchase additional shares. Shares ended the week 5% higher.
Viva Energy (positive impact) gave an update on its performance, which was overwhelmingly positive.
Shares in the company have risen by 6% since the announcement – which provided an update on the company’s performance in the 6 months to the 30th of June.
The company can be divided into three segments: retail fuel, commercial fuel and refining.
Retail fuel volumes (Shell and Liberty service stations) recovered in the 6 months to June to be in line with levels seen in 2019 – which implies they have picked up market share. Importantly, fuel margins have remained high, with pricing seeing robust margin outcomes and motorists spending up on premium fuel.
Commercial fuel volumes have remained resilient, with increasing demand for fuel in agriculture, resources and transport sectors.
Refining margins have improved, with the company now operating at levels that are cash flow positive and buttressed by the recently announced government fuel support package.
Macquarie Group Capital Notes 4 (ASX Code: MQGPD) are a new addition to clients’ income sub-portfolios.
The notes are a small position in the income portfolios that diversified its sources of income. They currently offer a yield of approximately 3.4%, with 40% franking.
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