ASX 200 Live Today - Wednesday, 18th February

Welcome to our live ASX coverage for Wednesday, February 18. Expect a high volume of posts pre-market and more periodic updates throughout the day. We'll be wrapping the blog up around 2:00 pm AEST. Let us know how we can make it even better.

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ASX 200 on a three day win streak

[2:05 pm] That's all for today. A rather tame results session, with names like Macmahon (+13.5%), Southern Cross Electrical (+12.9%), Netwealth (+12.5%), Shape Australia (+12.5%), Hansen Technologies (+10.4%), The Lottery Corp (+5.1%) and NAB (+5.0%) trading higher off the back of solid results. The ASX 200 is now looking at a three day win streak, which is still not enough to make up for last Friday's 1.39% selloff. Participation is solid today, with all sectors except Materials (-0.75%) higher and 129 constituents (65%) trading higher. Aussie bond yields have eased from recent highs, with the 10-year at 4.71% vs. 4.85% a few days ago. This is bringing some life back into yield-sensitive sectors like Real Estate (+1.38%). Tech (+1.1%) also notably higher, likely off the back of TechnologyOne's (+5.5%) FY26 earnings upgrade. Management really stressed that AI is a tailwind and not a risk to the business. "This increased guidance is not optimism – it is confidence in our customer pipeline in Australia, New Zealand and the UK. Driving this growth is the momentum of SaaS+, the response to Plus and our excitement in new AI products that will shortly be launched," said CEO Ed Chung. Though the upgrade is still met with some degree of skepticism, with the stock up 5.5% vs. session highs of 10.8%.

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Aussie wages up 0.8% for the quarter and 3.4% over the year

[1:03 pm] The Wage Price Index rose 0.8% in the December quarter and 3.4% annually, according to data from the ABS.

Michelle Marquardt, ABS Head of Prices Statistics, said: "Quarterly wage growth of 0.8% was in line with the September quarter 2025. Annual growth in wages was 3.4%, up from 3.3% in September quarter 2025."

Key takeaways from the report include:

• Annual public sector wage growth was 4.0% in the year to December 2025, higher than the 2.8% same time last year.

• Private sector wages rose 3.4% over the same period. This was higher than the 3.3% growth recorded in the year to December 2024.

• ‘Strong growth in public sector wages for 2025 was due to new state public sector agreements that delivered multiple pay rises over the course of the year,‘ said Ms Marquardt.

Source: ABS

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Santos 1H26 earnings call highlights

[1:00 pm] A few interesting takeaways from the Santos earnings call.

• Barossa and Pikka Phase 1 to drive 25% production increase by 2027 vs 2025 levels, with LNG comprising around 60% of production from 2027 and higher-margin barrels significantly boosting free cash flow sensitivity to $550m to $600m per $10 Brent movement (up from current levels)

• Decommissioning programme in Western Australia has removed $600m to $700m of liabilities with annual spend of $200m to $300m anticipated for next few years, demonstrating progress on balance sheet cleanup

• LNG marketing strategy targets maintaining 80% to 85% contracted position over five years, balancing long-term contract security with spot market flexibility for price optimisation and leveraging Asian proximity advantage

• Bayu-Undan CCS project is FID-ready with potential final investment decision in H2 2027 subject to regulatory approvals and cross-border agreements, while Beetaloo appraisal targeting FID readiness by late 2028 or early 2029

• All-in free cash flow breakeven of US$45 to $50 per barrel sustained through at least 2030 with unit production costs below $7 per boe over medium term, underpinning resilience amid commodity price volatility despite lower commodity prices

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A2 Milk hits four year high

[12:55 pm] Funny how the market works sometimes – A2 reported a clean 1H26 result on Monday that broadly beat expectations, alongside a FY26 guidance upgrade. The notable numbers from the result include:

• Revenue up 18.8% to NZ$993.5m vs. NZ$969.2m ests (3% beat)

• Underlying NPAT up 19.6% to NZ$122.6m vs. NZ$87.7m ests (40% beat)

• Interim dividend NZ$0.115 vs. NZ$0.10 ests (15% beat)

• FY26 revenue guidance upgraded from low double-digit to mid double-digit growth and EBITDA margin expected at 15.5-16.0% (vs. Citi ests of 15.2% and 15.7% consensus).

Price action was wild on Monday, with the stock opening 10.3% higher, gains faded to a mere 2.8% early trade but managed to close 6.8% higher.

On Tuesday, the stock rallied 6.2% to a fresh four-year high, and gained a further 0.2% today.

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Netwealth trading sharply higher

[12:51 pm] Gap up and trend for Netwealth after a strong 1H26 result. The stock opened 4.7% higher, a little of session highs right now, but still up 11.5%.

• EBITDA up 23.9% to $96.7m vs. ests of $94.7m (2% beat)

• EBITDA margin of 49.9%, broadly in line with the FY26 target of ~49%

• NPAT up 19.9% to $69.0m vs. ests of $65.0m (6% beat)

• Interim dividend up 20% to 21 cps vs. Macquarie ests (Dec-25) of 20 cps (5% beat)

• Closing FUA up 23.6% to $125.6bn vs. Macquarie ests of $125bn (0.5% beat)

• FY26 guidance reaffirmed: EBITDA margin (ex-FG expenses) of ~49%, FUA net flows not to differ materially year-on-year, and capitalised software investment of ~$12m

Shares obviously hit by First Guardian blowup and broader tech/AI headwinds. Currently trading at a trailing 47x vs. Hub24 at 85x. Will be interesting to see if this valuation and/or performance gap closes.

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Uranium stocks rally

[12:44 pm] Uranium stocks are mostly up around 3-5% despite spot uranium easing 0.8% to US$88.8/lb overnight. The rally appears like a broad sector bounce with most names back to one-week highs but still down 10-20% from late January highs.

By Warren Masilamony

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Gold stocks broadly lower

[12:06 pm] Gold stocks mostly down 1-5% after spot gold fell 2.2% to US$4,884/oz overnight, with the S&P/ASX All Ords Gold Index down 1.9% at noon.

By Warren Masilamony

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Santos 2025 profit beats estimates

[11:53 am] Santos shares opened largely flat after reporting a softer FY25 result today. Underlying profit was slightly ahead of some consensus, despite lower revenue and cash flow.

• Revenue down 8% to $4.94bn vs. $5.09bn ests (3% miss)

• Underlying NPAT down 25% to $898m vs. $860m ests (4% beat)

• Net profit after tax to $818m vs. $1.22bn pcp (down 33%)

• Free cash flow from operations to $1.8bn vs. $1.91bn pcp (down 6%)

• Dividend up to 23.7c per share vs. 23.2c pcp (up 2%)

Management stated the company is “well positioned to deliver further strong shareholder returns with imminent production growth from Barossa LNG and Pikka phase 1.”

STO is marginally up 0.1% at $6.68 in morning trade.

By Warren Masilamony | Company page: (STO)

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LYL 1H26 results highlights

[11:11 am] Lycopodium delivered a softer first half with profit and revenue missing expectations, driven by weaker operating momentum. However, resilient margins and a higher interim dividend partly offset the negative signal from a cut to FY26 profit guidance. Key numbers:

• Revenue up 4.2% to $174.5m vs $183.6m ests (5.0% miss).

• EBITDA $29.6m vs $29.3m ests (1.0% beat).

• EBITDA margin 17.0% vs 16.0% implied ests (about 1.0ppt better).

• NPAT down 27.7% to $18.3m vs $19.4m ests (5.7% miss).

• Interim dividend 22c vs 10c pcp (up 120%), record 24 March, payable 2 April.

• EPS 45.9c vs 63.5c pcp (down 27.7%).

FY26 NPAT guidance cut to $37-41 million vs. prior guidance of $40-44 million and ests of $43 million. This represents a 9.3% miss at the midpoint. LYL shares are down 9% at $13.47 in morning trading. By Warren Masilamony | Company page: (LYL)

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BHP attracting target price upgrades

[10:51 am] BHP rallied 4.7% to fresh all-time highs on Tuesday after its first-half result slightly beat earnings expectations, along with a stronger-than-expected interim dividend. The share price reaction was supported by a strong operational outcome, with copper contributing the largest share of overall earnings for the first time on record (51% of EBITDA). Here's what analysts are thinking:

• JPMorgan maintained Overweight, raised target from $56 to $58. Monetisation of the silver stream and strong copper performance underpin confidence in the medium term, with iron ore cost guidance offering upside despite softer coal costs.

• RBC Capital Markets maintained Sector Perform, raised target from $51 to $55. The result reinforced the accelerating pivot to copper, with capital recycling and staged Vicuña development reducing risk and WAIO free cash flow supporting growth.

• UBS maintained Neutral, raised target from $47 to $52. A stronger-than-expected dividend highlighted balance sheet capacity and growing copper exposure, though higher-than-expected South Australia capex tempers enthusiasm.

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Brokers bullish on Seek

[10:47 am] Analysts continue to see upside in Seek, despite ongoing job ad volume and yield volatility and AI risks. The company's 1H26 result on Tuesday was broadly in-line with expectations, with management tightening the FY26 guidance towards the top end of prior ranges. The stock finished 3.3% lower, potentially off the back of its $356 million Zhaopin write down and risks to volumes heading into the second half.

• Morgans upgraded to Buy from Accumulate, target unchanged at $27.50. The result met expectations with strong yield and emerging operating leverage post investment cycle, though AI disruption remains the key unresolved risk.

• Morgan Stanley maintained Overweight, lowered target from $32.50 to $28.00. Record yield growth and durable pricing power highlight a strong ANZ competitive position, with AI representing both a structural opportunity and a valuation risk.

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Analysts mixed on Baby Bunting

[10:43 am] Baby Bunting shares rallied 8.6% on Tuesday after its 1H26 was broadly in-line with its guidance and market expectations. Management narrowed the full-year guidance (slight upgrade at the midpoint). Optimism was slightly offset by a large increase in capex to support the company's ongoing store roll out and refurbishment program.

• RBC Capital Markets maintained Sector Perform, target unchanged at $2.60. Strong sales and margin delivery alongside disciplined refurbishment execution were noted, though higher capital intensity and limited near-term catalysts temper upside.

• Morgan Stanley maintained Overweight, target unchanged at $3.60. Refurbishments are generating attractive long-term returns, with the elevated investment phase and dividend pause viewed as prudent and balance sheet risk manageable.

• Morgans maintained Hold, lowered target from $2.70 to $2.60. Margin expansion from pricing discipline and a growing refurb fleet underpin the medium-term outlook, but operating leverage is still emerging and sector headwinds constrain valuation.

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Analysts' take on Reliance Worldwide H1 results

[10:39 am] RWC’s H1 result on Tuesday missed expectations, and shares opened 2.2% lower before sliding down 9.1% at $3.50 by session close. Some analysts' takeaway:

• JPMorgan maintained Neutral, lowered target from $4.10 to $3.75 (down 8.5%). They flagged still soft end markets and tariff impacts stretching into FY27.

• E&P Financial Group maintained Positive, lowered target from $5.40 to $4.90 (down 9.3%). They pinned the miss on APAC and EMEA.

RWC is down 1.7% at $3.44 in morning trade.

By Warren Masilamony | Company page: (RWC)

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Top ASX 200 gainers and losers

[10:27 am] TechnologyOne rallying off the back of a FY26 guidance upgrade, Netwealth's result broadly beat expectations and Nickel Industries received a sizeable increase to its nickel production quota. Meanwhile, Capstone tumbles on a downbeat production guidance and gold stocks are broadly lower as bullion prices slipped overnight.

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Nickel Industries secures a major quota uplift

[10:21 am] The 59% increase in the 2026 RKAB quota removes a key supply constraint and positions the mine to fully service both its RKEF and the ramping ENC HPAL operations this year.

• Hengjaya Mine 2026 RKAB quota increased to 14.3m wmt from 9.0m wmt, a 59% uplift

• Two further windows to apply for additional quota increases are available mid and end of year, with the company intending to pursue both as ENC commissions and ramps up

Two weeks ago, the Indonesian government ordered he world's largest nickel mine, PT Weda Bay Nickel, to significantly reduce production. The mine received a production quote of 12 million tonnes for 2026, down 71% from 42 million in 2025. So pretty interesting to see NIC receive a higher quota.

NIC shares opened 2.3% higher, now up 6.7%.

Company page: Nickel Industries (NIC)

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Dexus delivers in-line half, launches buyback

[10:14 am] Results came in largely as expected with valuation tailwinds lifting statutory profit, while management moves to close the gap between market price and asset value via a buyback. Dexus shares are up 5.2% in early trade.

• AFFO of 23.6 cents per security

• Revenue down 17% to $360m vs. $434.7m year-ago

• Statutory NPAT of $348.5m vs. $10.3m year-ago, driven by fair valuation gains this half versus losses in the prior period

• 1H26 DPS of 19.3 cents confirmed

• NTA per security rose 1.6% to $8.95, with overall property portfolio valuations up 1.0% (office +0.7%, industrial +1.6%), marking the second consecutive half of positive revaluations

Other metrics of interest:

• Office leasing volumes of 95,300 sqm nearly doubled year-on-year, with Waterfront Brisbane now 71% pre-leased; industrial like-for-like income growth of 8.7% driven by circa 33% releasing spreads

• Launched on-market buyback of up to 10% of securities , with management citing a sustained disconnect between market valuation and underlying asset value

• Gearing remains comfortable at 33.9% within the 30-40% target range

FY26 guidance reaffirmed at 44.5-45.5 cents per security, in-line with consensus.

Company page: Dexus (DXS)

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TechnologyOne lifts FY26 guidance

[9:54 am] A confident guidance upgrade at the AGM signals TechnologyOne is firing above its historical growth levels, with AI product launches and SaaS driving higher earnings expectations.

• FY26 PBT growth guidance upgraded to 18-20% from 13-17% prior, with ARR growth guided to 16-18%

• Management targeting the top end of both ranges

• PBT growth range has moved from 10-15% in prior years, to 12-16% in FY24, 13-17% in FY25, and now 18-20% in FY26

• CEO Ed Chung flagged strong customer pipeline momentum across Australia, New Zealand and the UK as the basis for the upgrade, noting "we don't guide up unless we can see it in the numbers"

TNE shares have tumbled 19% YTD and down 42% in the last six months to the lowest since August 2024.

Company page: TechnologyOne (TNE)

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Hansen delivers solid half, cash flow sharply higher

[9:50 am] Strong operating leverage and cost discipline drove outsized earnings and cash flow growth, with revenue slightly soft on estimates but the underlying business momentum firmly intact.

• Revenue up 7.3% to $191.0m vs. ests of $199.6m (4% miss),

• Underlying EBITDA up 46.1% to $55.7m vs. ests of $57.5m (3% miss)

• EBITDA margin tracking towards the ~30% FY26 target

• Underlying NPATA up 142.3% to $30.5m vs. ests of $27.5m (11% beat)

• Net cash from operating activities up 417.7% to $53.6m reflecting strong operating leverage and cost control

• Interim dividend of 5.0 cps

• Digitalk acquisition expected to contribute to revenue acceleration in 2H26

• Outlook: On track for ~30% underlying EBITDA margin in FY26 (UBS ests at 31.8%), medium-term targets of 5-7% organic revenue growth

Company page: Hansen Technologies (HSN)

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The Lottery Corp navigates historic jackpot low

[9:44 am] The Lottery Corporation posted resilient 1H26 results despite the most unfavourable jackpot environment since its 2022 demerger, with low Powerball and Oz Lotto outcomes dragging an estimated $400 million from turnover.

• Revenue up 2% to $1.82bn vs. ests of $1.79bn (1% beat)

• EBITDA down 0.7% to $367m vs. ests of $365.3m (in line)

• NPAT down 1.4% to $173.3m vs. ests of $171.0m (1% beat)

• Dividend of 8.0 cps vs. ests of 7.9 cps (1% beat)

• Digital share of Lotteries turnover grew 80 bps to 41.2% despite the weak jackpot backdrop

• Operational highlights: Saturday Lotto game change delivering well with price retention of 103%. Powerball subscription price increase implemented November 2025. Set for Life refresh flagged for September 2026

• Leverage at 3.0x Net Debt/EBITDA, at the lower end of the 3.0-4.0x target range

Company page: The Lottery Corporation (TLC) | By Stephanie Gardner

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SGH and Steel Dynamics go best and final on BlueScope

[9:42 am] A revised and final cash offer values BlueScope at $15 billion, representing a substantial premium to all key undisturbed trading metrics and would see SGH retain the Australian operations while Steel Dynamics takes North America.

• Revised offer price of $32.35 per share in cash, equivalent to $34.00 per share before deductions of $1.65 (comprising BSL's $1.00 unfranked special dividend and $0.65 unfranked interim dividend)

• Declared best and final in the absence of a superior competing proposal, representing a 14% increase on the adjusted initial proposal price of $28.35

• Represents a 47% premium to BSL's adjusted closing price at initial proposal

• Structure has SGH retaining BSL's Australia and Rest of World operations, with North American operations on-sold to Steel Dynamics post-close, aligning with both parties' stated strategic and capital allocation frameworks

Company page: BlueScope Steel (BSL)

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SHAPE firing on all cylinders

[9:39 am] A standout half from SHAPE with revenue, margins and backlog all accelerating, as the non-office pivot gains serious traction and Modular scales rapidly. No consensus numbers as this thinly traded ~$500 million market cap company doesn't receive much institutional coverage. Though the stock has been trending strong since August 2023.

• Revenue up 16% to $553.3m

• EBITDA up 45% to $21.4m

• Gross margin improving to 9.8% from 9.1%

• NPAT up 49% to $14.0m

• Interim dividend up 40% to 14.0 cps

• Backlog up 33% to $686.1m, with an identified pipeline of ~$3.8bn providing strong H2 visibility

• Non-office project wins up 120%, with education up 170% to $153.5m and industrial and data centre wins of $137.4m compared to just $7.0m in pcp

• Arden Group acquisition (completed December) adds national retail fitout and facilities maintenance capabilities in higher-margin fuel and convenience sectors, expanding addressable market and creating recurring revenue streams

• Outlook commentary: well-positioned for H2 with backlog and pipeline growth underpinning continued diversification across all three pillars

Company page: Shape Australia (SHA)

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Netwealth delivers another strong half with FUA and flows momentum building

[9:35 am] Record inflows, double-digit FUA growth and a 20% dividend increase underscore Netwealth's continued platform market share gains heading into a well-positioned second half.

• Total income up 24.7% to $193.8m vs. ests of $188.0m (3% beat)

• EBITDA up 23.9% to $96.7m vs. ests of $94.7m (2% beat)

• EBITDA margin of 49.9%, broadly in line with the FY26 target of ~49%

• NPAT up 19.9% to $69.0m vs. ests of $65.0m (6% beat)

• NPAT margin of 35.6%, down slightly from 37.1% in pcp as investment spend was brought forward

• Interim dividend up 20% to 21 cps vs. Macquarie ests (Dec-25) of 20 cps (5% beat)

• Closing FUA up 23.6% to $125.6bn vs. Macquarie ests of $125bn (0.5% beat)

• FY26 guidance reaffirmed: EBITDA margin (ex-FG expenses) of ~49%, FUA net flows not to differ materially year-on-year, and capitalised software investment of ~$12m

The result reads well at face value, with broad beats across all key metrics. Netwealth shares have tumbled 37% since its August 2025 result, trading at the lowest level since early April. This weakness may be attributed to the First Guardian failures and broader tech/growth sector weakness. Over the same time period, Hub24 shares have slumped 24%.

Company page: Netwealth Group (NWL)

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Evolution Chairman Klein sells down 30% of his stake

[9:28 am] Evolution Mining chairman Jacob Klein has sold 3.25 million shares on market over 4 days at $15.76 per share, raising ~$51.2m.

• Klein sold 3.25M shares between 12-17 February 2026 at $15.7587 per share (aggregate ~$51.2m), representing a 30% selldown of his prior 11m share holding.

• He retains 7.75m fully paid ordinary shares post-sale, plus 1.56m performance rights yet to vest.

• An off-market transfer of 800,000 shares was also conducted to JDSZ Pty Ltd ATF Jake and Debbie Klein Family Foundation, with no change in overall beneficial interest.

Company page: Evolution Mining (EVN) | By Stephanie Gardner

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Healius 1H26 results

[9:26 am] A messy half for Healius, but underlying cost momentum is building and management expect a strong second half.

• Revenue down 0.2% to $688.1m vs. ests of $689.8m (in-line)

• Pathology revenues up 3.5% on 1.2% volume growth, with Q2 volumes flat after a stronger Q1

• Underlying EBIT of $7.9m vs. Morgans ests of $3.8m

• Underlying net loss of $30.4m, reflecting digital program and restructuring costs

• Costs up just 1.9% despite volume growth, labour costs as a percentage of revenue fell 2.7 percentage points between Q1 and Q2 to 49.3%, with roughly 400 FTE removed during the period

• $10.7m in annualised support cost savings realised in 1H26, on top of $7.3m in FY25, putting the group on track to hit its $15-20m target with further savings flagged for 2H26

• Net cash position of $11.6m with drawn debt of $40m

FY26 earnings expected in line with consensus, profitability skewed to H2 on seasonality and cost timing. High single digit EBIT margins targeted by June 2027.

Company page: Healius (HLS)

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Southern Cross Electrical Engineering 1H26 results

[9:13 am] A $46.1m WestConnex arbitration loss dragged SCEE to a statutory loss, masking a strong underlying half with record gross profit, raised guidance and an explosive data centre pipeline.

• Revenue down 12.2% to $349.1m vs. ests of $429.5m (19% miss)

  • Decline driven by the wind-down of the CBESS and Western Sydney Airport projects rather than underlying weakness

• Underlying EBITDA up 30.8% to $35.4m vs. ests of $30.1m (18% beat)

• Gross margin expanding to 18.9% from 12.7% in pcp on better project mix and a successful CBESS outcome

• NPAT loss of $12.8m vs. pcp profit of $16.2m, entirely attributable to the $46.1m WestConnex arbitration settlement

• Interim dividend flat at 2.5 cps

• Order book up 6% to $710m, with infrastructure comprising 65% of the book and over 85% now on the East Coast

For context, the arbitration update on 2 December 2025 drove the stock 6.6% lower (down as much as 16.7%). Though it was back to pre-arbitration levels just six days later and now up 20% since the news.

Outlook and guidance commentary:

• FY26 underlying EBITDA guidance increased to at least $72m vs. ests of $67.4m (6.8% beat)

• Data centre exposure is a standout, with over $1bn of new data centre work currently being tendered and revenues from the sector forecast to grow significantly in FY27 and beyond

Company page: Southern Cross Electrical Engineering (SXE)

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NAB kicks off FY26 with a strong quarter, comfortably beating expectations

[9:05 am] Cash earnings came in well ahead of estimates, driven by revenue growth, margin improvement and lower credit impairment charges.

• Cash NPAT up 15% (vs. 2H25 quarterly average) to $2.02bn vs. ests of $1.80bn (12% beat)

• NIM up 2 bps to 1.80% vs. ests of 1.77% (3 bp beat)

  • NIM ex-Markets and Treasury and liquid assets stable, reflecting improved deposit dynamics

• Revenue up 6% for the quarter, ex-Markets and Treasury up 4%, driven by volume growth, higher fees and commissions and lower customer remediation costs

• Credit impairment charge of $170m, with individually assessed charges of $210m largely in Australian business lending and unsecured retail, partly offset by a $40m collective provision release

• Asset quality improved, with non-performing exposures to gross loans down 8bps to 1.47% from September 2025, driven by better outcomes in business lending and Australian mortgages

• CET1 of 11.48%

Another very strong bank result, though hard to say how NAB will trade given recent strength. The results from CBA and ANZ drove NAB up 5.8% between 11-12 February to fresh all-time highs.

Company page: National Australia Bank (NAB)

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Suncorp weathers a tough first half

[8:59 am] Nine declared natural hazard events and $453m above allowance in nat-haz costs hammered reported profits, but underlying margins held firm and the dividend came in ahead of expectations.

• Cash earnings down 67% to $270m vs. ests of $270.4m (in line)

• Reported NPAT down 76% to $263m vs. ests of $260.6m (1% beat)

• GWP up 2.7% to $7.69bn vs. ests of $7.74bn (1% miss)

  • Supported by Consumer portfolio GWP growth of 6.3% with Motor and Home unit growth of 2% and 0.4% respectively

• Natural hazard costs came in $453m above allowance, driven by nine declared events and over 71,000 claims. The November hailstorm event is flagged as among the costliest in recent history

• Underlying insurance trading ratio of 11.7%, towards the top half of the 10-12% target range, reflecting resilient margins despite the natural hazard headwinds

• Interim dividend of 17 cps vs. ests of 16 cents (6% beat)

  • A 68% cash earnings payout ratio

Outlook: GWP growth expected around the bottom of the mid-single digits range given softer Commercial conditions in Australia and New Zealand. Underlying ITR guided to remain in the top half of the 10-12% range

Company page: Suncorp (SUN)

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Iluka weathers a tough year with cost resets and Balranald now online

[8:52 am] A messy CY25 result for Iluka with large accounting adjustments masking underlying operational progress, as the company resets its cost base and advances its rare earths refinery. Most of the result should come as no surprise as items like the impairment, full-year production and outlook was already highlighted in the December quarter report (29-Jan), which sparked a sharp 14% selloff.

• Net loss of of -$288.4m vs. ests of -$390.5m

  • Heavily distorted by $566m in pre-tax accounting adjustments relating to impairments and inventory write-downs

• Mineral sands revenue of $976m vs. ests of $986.2m (1% miss)

• Adjusted EBITDA of $300m vs. ests of $312.4m (4% miss)

• Final dividend of 3 cents per share

Operational highlights:

• Balranald is now operational with mining commencing January 2026. The first mining rig has hit target extraction rates with the second rig coming online in February

• Cost base has been meaningfully reset, with mineral sands cash requirements guided significantly lower in 2026 on the back of reduced costs and lower capex

• Eneabba rare earths refinery construction remains on budget with commissioning targeted for 2027, a key long-term value driver for the group

Company page: Iluka Resources (ILU)

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Fletcher Building holds the line, recovery still a 2027 story

[8:45 am] A stable if uninspiring first half as cost discipline and balance sheet progress offset weak NZ and Australian construction markets, with no interim dividend declared.

• Revenue flat at $2.87bn

• EBIT (continuing ops, before significant items) down 1.3% to $145m vs. ests of $153.7m (6% miss)

• NPAT (continuing ops) down 48% to $45m, unclear if comparable to ests of $59.5m

• No interim dividend declared, consistent with the Group's capital structure settings

• Net debt of $1,164m came in below internal expectations, with operating cash flow improving to $156m from $87m in pcp, reflecting better working capital management

• Sale of the Construction division (announced January) is a key reshaping move, with the group targeting a simpler building products manufacturing and distribution model

Outlook commentary was rather downbeat, including:

• "While we have made solid progress, market conditions remain challenging in New Zealand and demand across the residential and civil sectors is expected to remain relatively subdued through FY26, with a more meaningful recovery not anticipated until calendar year 2027."

• "In Australia, early signs of stabilisation are emerging, although conditions remain uneven."

Company page: Fletcher Building (FBU)

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Life360 and Uber deepen family-focused super app play

[8:41 am] Life360 has expanded its partnership with Uber to integrate ride booking, real-time trip tracking, and teen account coordination directly into the Life360 platform.

• The integration will allow Life360 and Uber users to link accounts, with a specific focus on Uber's teen accounts (ages 13-17), giving parents real-time visibility over rides booked by their children

• Features rolling out over coming months include in-app ride booking, live trip tracking, and membership benefits, building on an existing integration that already delivers airport ride reminders

• Uber teen accounts have completed tens of millions of trips across 50+ countries since launching in 2023, highlighting the scale of the addressable family market both companies are targeting

• The integration is designed for iOS and Android and is expected to go live later in 2025, with the partnership described as evolving over time

US-listed Life360 shares struggled for upside overnight, up just 0.5%.

Company page: Life360 (360)

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Investors bullish but cracks appearing beneath the surface

[8:39 am] BofA's February Fund Manager Survey shows peak sentiment and equity positioning, but capex concerns and contrasting signals from other banks warrant watching.

• Sentiment is elevated across the board: investors most overweight stocks since Dec-24, most underweight bonds since Sep-22, and the Bull & Bear Indicator sits at 9.5, "no landing" is now the base case for a record net 52% of respondents

• Growth expectations are running hot, with "boom" scenarios (above-trend growth and inflation) at their highest since Feb-22 and a net 24% expecting over 10% EPS growth, the most bullish reading since Aug-21

• Despite the optimism, a net 35% want companies to strengthen balance sheets over investing, and a record share see corporates as overinvesting, a potential headwind for capex-driven growth narratives

• AI remains the most crowded trade, long gold holds as the most crowded single position, and long Mag 7 has collapsed from 54% to 20% in just two months, private credit is again flagged as the most likely source of a credit event

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Oil stuck between sanctions and peace deals

[8:38 am] Citi sees near-term crude support from Trump's geopolitical pressure, but expects prices to fall sharply if peace deals land by mid-year.

• Brent has rallied from ~$60 to ~$70/bbl over the past month, driven by tighter enforcement of U.S. sanctions on Russian and Iranian oil plus broader supply disruptions

• Citi's base case is that both an Iran deal and Russia-Ukraine resolution occur by or during summer 2026, pushing Brent down to $60-62/bbl and compressing diesel and gasoline cracks by $5-10/bbl

• If Russian supply disruptions keep Brent in the $65-70/bbl range near-term, Citi expects OPEC+ to respond by lifting output from spare capacity; the group is already leaning toward resuming increases from April

• China continues to buy Russian and Iranian oil at a discount for both consumption and stockpiling, a trend Citi expects to persist through 2026 while sanctions remain in place

Source: Reuters

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A flat overnight session

[8:33 am] Major US benchmarks finished flattish in a relatively rangebound session. Equal-weight S&P 500 (-0.17%) underperformed the cap-weighted index by 27 bps amid weakness from tech, staples, miners, homebuilders, energy and retail stocks. Bond yields marginally higher, but the 2-and-10 year yields mostly trading around 2-3 month lows. Commodity prices broadly lower amid thin Lunar New Year trading, notable declines for silver (-4.9%), gold (-3.2%), platinum (-2.3) and nickel (-2.0%). A relatively quiet day in terms of high-profile catalysts. Big Tech finished mixed, with Apple (+3.1%) and Broadcom (+2.2%) higher, while Tesla (-1.6%) and Microsoft (-1.1%) lagged. A pickup in M&A headlines, including Warner Bros agreeing to reopen talks with Paramount, as well as a few deals in the industrial and travel space. iShares Expanded Tech-Software ETF down 2.2%, pretty much back at recent lows after a 2.2% bounce in the previous session.

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Good morning!

[8:27 am] ASX 200 futures are up 40 pts (+0.44%) as of 8:30 am AEDT.

The overnight session in a nutshell:

• Major US benchmarks finished relatively flat – S&P 500 (+0.10%), Dow (+0.07%), Nasdaq (+0.14%) and Russell 2000 (unch)

• Commodity prices broadly lower, with notable declines for gold (-3.2%) and copper (-1.4%)

• Bank of America's February Global Fund Manager survey noted investors most overweight stocks since December 2024, sentiment highest since June 2021 though cash levels ticked up 0.2 percentage points to 3.4% after seven consecutive months of declines

To catch up on all overnight developments, check out today's Morning Wrap.