$JSEAVI - AVI Ltd: Expect More Sideways Price Action
AVI recently released a trading statement for the six months ended 31 December 2022.
The report was sobering at best and highlight various challenges the group is facing.
Key takeaways from the report:
Load shedding impact: back-up power added R22m to direct operating costs.
Currency/commodity volatility, high fossil fuel prices led to higher input costs.
Rising inflation, higher interest rates & unemployment continue to constrain consumer spending.
Sales volumes lower in some categories exacerbated by competitor discounting, cost pressures not always recovered through higher prices.
I&J’s revenue declined 2.3% with lower catch rates and the re-emergence of lock-downs in China and Hong Kong affecting the abalone sales mix.
I&J’s gross margins were substantially constrained by materially higher diesel costs for the fishing fleet that were not fully recovered through selling price increases, and the unfavourable abalone sales mix.
Selling and administrative expenses increased at rates well above inflation.
Sadly, the technical outlook does not paint a rosy picture either.
A significant bottom looks to be in at 5939 zac and the sell-off that bottomed 6048 is an indication that this is a price level the bulls want to defend.
There is no bullish price action and I will therefore wait for the full interim results to be released on or about 6 March 2023 before updating the charts from the March 2020 low.
The report was sobering at best and highlight various challenges the group is facing.
Key takeaways from the report:
Load shedding impact: back-up power added R22m to direct operating costs.
Currency/commodity volatility, high fossil fuel prices led to higher input costs.
Rising inflation, higher interest rates & unemployment continue to constrain consumer spending.
Sales volumes lower in some categories exacerbated by competitor discounting, cost pressures not always recovered through higher prices.
I&J’s revenue declined 2.3% with lower catch rates and the re-emergence of lock-downs in China and Hong Kong affecting the abalone sales mix.
I&J’s gross margins were substantially constrained by materially higher diesel costs for the fishing fleet that were not fully recovered through selling price increases, and the unfavourable abalone sales mix.
Selling and administrative expenses increased at rates well above inflation.
Sadly, the technical outlook does not paint a rosy picture either.
A significant bottom looks to be in at 5939 zac and the sell-off that bottomed 6048 is an indication that this is a price level the bulls want to defend.
There is no bullish price action and I will therefore wait for the full interim results to be released on or about 6 March 2023 before updating the charts from the March 2020 low.
