Australia's largest public companies see revenues grow to $659 billion

Australia’s largest public companies – those listed on the ASX50 – have seen their revenues grow by an average of 4% over the past twelve months, according to an analysis by KPMG. Three quarters of the ASX50 managed to realise revenue growth, with the five miners in the ASX50 – led by strong results at giants BHP and Rio Tinto – driving profit growth. 

The analysis by the Big Four accounting and consulting firm studied the financial reports of Australia’s 50 largest listed companies, finding that combined, the country’s elite generated revenues of around $659 billion for the 12 month period ended 30 June 2018. Total profits over the past financial year jumped 15% to $138 billion.

Miners reported an average revenue growth of 10%, with BHP Billiton leading the way, up 21%, while Fortescue Metals Group was the only of the Big Five that faced a dip in total turnover. Together, BHP and Rio Tinto now account for 82% and 90% respectively of annual revenue and annual statutory profit before tax among their listed peers in the assessment. Across the board, ASX50-listed mining companies recorded a profit before tax increase of 28% to about $43 billion in the financial year. Meanwhile, energy companies AGL, Origin Energy and Santos also saw growth in both revenues and profits (up a staggering 359%), with both sectors benefitting from higher commodity and production prices.

"Overall, industry financial performance has been helped by stronger prices from continued strong global commodities markets. Other factors vary between the miners and include increased production volumes, benefit from asset divestments, and increased quality discounts,” commented Ted Surrete, Industry Leader, Energy & Natural Resources at KPMG in Australia.

The country’s Big Four banks – ANZ, Commonwealth Bank, National Australia Bank and Westpac – reported a modest 3% increase in annual revenue and a 2% increase annual statutory profit before tax, to $44 billion. Profit growth slowed on the back of a number of challenging market conditions, including a low interest rate environment, margin pressure and increasing capital requirements, as well as higher internal costs, due to among others the growing costs of compliance and remediation.

Australia’s insurance companies performed significantly under the market average, with annual revenue for the five ASX50 companies increasing just 1% and annual profit before tax crashing 25%. “The reduced profit reflected the impacts of catastrophes from global weather events and wildfires along with impairment charges impacting the international operations of one international insurer,” explained David Kells, KPMG’s leader for its Insurance practice. “This was in contrast to domestic general insurers who again benefited from another relatively benign year in terms of natural hazards along with continuing low levels of wage inflation,” he added.

Companies in the consumer staples industry – Aristocrat, Treasury Wine Estates, Wesfarmers and Woolworths – saw annual revenues increase by 2%. Star performers Aristocrat booked an increase in revenue of 19% and a profit before tax increase of 21%, whilst Treasury Wine Estates reported a 23% increase in profit on flat revenues driven by its premiumisation strategy. Revenues of Woolworths and Wesfarmers were impacted by ongoing deflationary pressures in the grocery sector.

The nine real estate companies – Dexus Property, Vicinity Centres Trust, Goodman, GPT, Lend Lease, Mirvac, Stockland, Scentre – reported a 1% decrease in annual revenue and a 13% increase in annual profit before tax. Other sectors represented in Australia’s ASX50 include materials (Amcor, James Hardie Industries, Orica) and transportation (Aurizon, Sydney Airport, Transurban, Qantas). These seven companies reported a 5% annual revenue decrease and a 33% increase in annual statutory profit before tax.

Related: Phoenixing costs Australia’s economy $5 billion, finds PwC report.