A disappointing first year as an Africa and Asia focused business sent Prudential shares lower on Wednesday as the company reported declines in IFRS profit after tax and new business profit for 2022.

Prudential shares were down over 6% in early trade on Wednesday. However, Prudential shares are significantly higher than their October lows after the a strong rally sparked by the China reopening.

The company pointed to resilience in the face of COVID-19 and the future opportunities in their geographies, but investors struggled to look past a slow 2022 caused by COVID-19 restrictions in Mainland China and Hong Kong.

Indeed, adjusted operating profit increased 8% on a constant currency basis (4% drop actual currency) with 9% higher APE sales. APE sales are a measure of new business not recognised by IFRS.

After demerging M&G in 2019, Prudential has shifted their strategy to focus Asian and African Insurance business an is heavily reliant on their Mainland China joint venture with CTIC for growth.

“2022 was the first full year for the Group as an Asia and Africa focused business. We have delivered a resilient performance against a backdrop of Covid-19-related disruption and broader macroeconomic volatility,” said Anil Wadhwani, Prudential CEO.

“The results reflect the advantage of our diversified business model across the Asia region, highlighted by a balanced contribution to APE sales and new business profit from Hong Kong, the Chinese Mainland and Taiwan and from South-east Asia, including Singapore, Indonesia and Malaysia.”

Prudential noted a sharp rebound in activity in the first two months of 2023 and are expecting Mainland China and Hong Kong to be a integral part of their growth in 2023.

Their growth markets segment that includes India, Thailand, Vietnam, the Philippines, Taiwan, Cambodia, Laos, Myanmar, and its businesses in Africa showed signs of promise as adjusted operating profit rose 13% to $1,057m.

Prudential increased their dividend 9% to total 18.78 cents per share for the full year, but still yields less than 2%.

After having lost £111.95m in the year to end September 2022, the big question is will shareholders in the AIM-quoted Angus Energy (LON:ANGS) see any recovery in the current year?

It is an independent onshore oil and gas development company focused on advancing its portfolio of licensed UK assets.

It must be stated that £110.31m of that loss was down to a derivative position based upon the future production and calculated using forward gas prices as at the year end.

The energy hedging contract was based upon selling forward half of the production at the group’s Saltfleetby Gas Field, in East Lincolnshire. The contract, from July 2022, was for three years, based upon a price set in the Spring of 2021.

Perhaps understandably because prices in the intervening period have risen significantly, due to the Ukraine conflict. However, it only covered half of the production for that period of time.

Its Interests

The £48m capitalised group, which is due to hold its AGM at the end of this month, is focused on leveraging its expertise to advance its portfolio of UK assets as well as acquire, manage and monetise select projects.

Described as an independent onshore Energy Transition company, it has a complementary portfolio of clean gas development assets, onshore geothermal projects, and legacy oil producing fields.

The company is not only the 100% interest operator of the Saltfleetby gas field, which is in producing gas directly to the National Grid, but it also has exploration and production at its conventional oil assets of Balcombe, Lidsey and Brockham.

• Angus Energy holds a 25% stake in and is the Operator of the Balcombe Discovery along with its partners Cuadrilla and Lucas Bolney.

The Balcombe site (PEDL 244) lies approximately 8km south-east of Crawley near the village of Balcombe.

• The Lidsey Oil Field is located in the production licence PL241, onshore West Sussex near Bognor Regis, on the southern flank of the Weald Basin.

The company is the operator and majority partner of the licence and currently holds an 80% interest in the field.

• The group is the operator and majority partner of production licence PL235 located in the Weald Basin, onshore UK. It currently holds a 80% interest in the Brockham Field.

The company has stated that it plans to use its geological, drilling and engineering skills to take the opportunity to repurpose onshore hydrocarbon wells for the production and storage of geothermal energy and the use of older fields for the storage of CO2 or hydrogen.

Proposed Board Reorganisation

Former Head of Exploration at BP, Richard Herbert, will be appointed Chief Executive with full control of day-to-day operations, while George Lucan is looking to take up the role of Executive Chairman focussing upon strategy and stakeholder relations.

Shareholders

There are 3,484,101,882 shares is in issue, of which Forum Energy Technologies is the largest shareholder (13.4%), others include Aleph Fin C (6.60%), Kemexon (6.39%), Knowe Properties (2.81%), Jaspal Singh (1.17%), Gneiss Energy (1.14%), PJ Tidswell (0.81%), Marr Sebastian (0.61%), Aleph Commodities (0.53%) and Adegbenga Alabi (0.38%).

Outlook

With production at Saltfleetby increasing, the company looks forward to achieving positive operational cashflow. It is confident that it will be a successful producer, with flow testing planned for late March and gas export expected from 1^st April.

It will continue to explore further gas opportunities and mature its geothermal projects in the south-west of England, with the intention of not only creating shareholder value but also to address the urgent need for transition energy projects.

Conclusion

The group has the vision of becoming a significant player in the aggregation, production and storage of gas, with its current interests progressing it is now beginning to put its bricks in place in order to achieve its ambitions.

After quite a transformational year in 2022 the company now looks to be on track for delivering sales gas volume growth and profits in 2023.

Its shares, which were up to 2.72p last September, are currently just 1.375p each, from which level there should be a significant upside.

The FTSE 100 was gaining on Tuesday as the index bounced back from the SVB-induced volatility with banks and financials driving the recovery.

The FTSE 100 was 0.8% higher at the time of writing. Despite the volatility over the past few trading sessions, the index is still positive for 2023.

Rolls Royce was the top riser, gaining over 3%, but the rally was broad with banks and financials featuring heavily among the best performers on the day.

Barclays and Lloyds were both more than 2% stronger, although they were still significantly below pre-SVB levels. A strong bounce back from US banks was helping improve sentiment and enticed bargain hunters.

“There was a sense some calm had been restored to markets after a bruising few sessions,” said AJ Bell investment director Russ Mould.

US CPI

A rally in stocks progressed through the session as the index attempted to recover the past sessions losses. The steady tick higher enjoyed a boost from US CPI which came in bang in line with estimates of 6%.

The data confirmed US inflation was trending lower, but still remained at historically high levels. In the wake of SVB’s collapse, this poses a problem for the Federal Reserve who will announce their interest rates decision next week.

Some market participants will expect the Federal Reserve to push on with higher rates to validate their measures to stabilise the financial system over the weekend. This may upset equity investors looking forward to a Fed ‘pivot’

“As inflation continues to remain elevated, more work will likely be required to restore price stability. However, the recent events in the banking sector will signal to the Fed to tread cautiously when implementing additional monetary policy tightening,” said Nathaniel Casey, Investment Strategist at Evelyn Partners.

The debate between a 25bps or 50bps interest rate hike was briefly superseded by SVB, one would expect this to return with a vengeance as we approach next week’s rate decision.

News overnight that after a four-week standoff it is rumoured that Nevada’s Newmont Corporation and Australia’s Newcrest Mining are set to talk.

The subject for discussion is the February $24.5bn bid by Newmont for Newcrest Mining, the Australian partner with Greatland Gold (LON:GGP) in the important Havieron gold prospect.

Approach rejected

The Newcrest Board rejected the unsolicited approach a month ago, with immediate reactions that its business was worth a great deal more than Newmont was offering.

Previously the two sides had not been talking about the bid, but news overnight has suggested that the two sides could well be getting around to a meeting to discuss the bid and its values.

It is suggested that if the two groups sit down together then Newcrest will be given the opportunity to show its gold and copper mines and projects interests in Australia, Papua New Guinea and Canada.

Show me yours

That display of value would also see the Newcrest Mining interest in the Havieron gold-copper project Greatland Gold’s flagship project which is next to Newcrest’s major Telfer gold mine in the Paterson region of Western Australia.

Greatland Gold Investor Roadshows

Investors are getting excited about Greatland Gold’s potential, while the company is currently underway with a series of UK and European roadshows.

Could this be good news for the group

Newmont is the world’s largest gold company, so the combination of the two majors would create an absolute mining giant in Australia.

The thoughts are that perhaps Greatland Gold’s interest in Havieron is too close to Newcrest’s Telfer producer and not to be dismissed as an acquisition interest – such a purchase would be ‘pure petty cash’ to the giants but highly beneficial to Greatland.

On the other hand, Greatland Gold could perhaps be given the opportunity to purchase out Newcrest’s 70% stake in the Haveiron joint venture.

Either way shareholders could be the winners

Private investors now seem to be thinking that either way Greatland Gold shareholders could be on the winning side.

Greatland Gold, which has a proven track record of discovery and exploration success has a number of exploration projects across Western Australia, is currently valued at around £372m, with its shares trading at 7.20p.