Company News: Lynas, Healius and Origin Energy
Australian Equities Portfolio
Lynas (positive impact) announced that drilling at its Mt Weld Rare Earths Pit has identified further significant and continuous intersections of Rare Earth minerals. This indicates there is potential to expand its existing reserve and resource base and extend its mine life.
Lynas is a significant position in clients’ portfolios and has been a successful investment over the past year. We still see that the company has further potential to outperform, given the strategic value of its assets.
Healius (neutral impact) announced that it has completed the sale of its Medical Centres business. The business has been a source of underperformance for Healius and has required significant investment and attention in recent years.
We are pleased that the sale has completed, which improves the company’s financial flexibility and results in a simplified business, focused on pathology and imaging.
Origin Energy (positive impact) hosted its Investor day on Thursday. The company outlined the progress it has made in positioning itself for the transition to renewables, detailing several options it has to expand its renewable energy generation and sourcing.
It also outlined its strategy moving forward, which involves several measures to reduce its cost to serve its customers and improve customer experience, leverage its customer relationships to offer new products/services and redirect capital towards renewable power generation, and partnering with industry and government alike to progress towards a low carbon future (including hydrogen generation).
Importantly, it continues to find efficiencies in APLNG, with better field performance and operating performance translating into a reduction in future production costs – helping offset near-term price weakness.
Origin is a high-quality large-cap. We saw its price as expensive at the start of the year and reduced our position but have rebuilt our position recently, which has benefited from an improvement in the outlook for the global economy.