The fallout from the COVID-19 pandemic has decimated profits at some of the ASX’s blue-chip companies previously considered safe havens because of the dominant position they hold in their industries.

Downer EDI warned in June it would skid into the red as it launched a $400 million equity raising. Downer is also aggressively cutting costs in a move being replicated by hundreds of Australian companies. It employed 53,000 people around the world before COVID-19 arrived, but is pruning more than 1000 jobs, shrinking offices and slashing the value of IT equipment.
But while some of the blue-chip favourites have suffered bruising losses, companies such as $12 billion funds management giant Magellan Financial Group have proved resilient.
Were very conscious of the pain out in society and were very conscious that were going into next year with a great degree of uncertainty.
Hamish Douglass, Magellan chairman
Magellan reported 25 per cent growth in management fees and a 3 per cent drop in performance fees, defying volatile markets to grow funds under management by 26 per cent to close to $100 billion. The company will pay a $1.22 final dividend on August 26.
Magellan chairman Hamish Douglass said there was uncertainty ahead, as the group froze salaries and directors fees. He personally withdrew his $5 million bonus.
“Were very conscious of the pain out in society and were very conscious that were going into next year with a great degree of uncertainty,” Mr Douglass said.
“We really dont know,” he said. “One, we want to be prudent but we want to be acting with some humility here,” he said.
Commonwealth Bank also brought some sense of relief for investors relying on dividends, paying out a 98¢ per share final dividend. It was its lowest in 14 years, but still better than anticipated compared with some of the gloomy predictions of a few weeks ago.
Building products group James Hardie Industries has also showed well-managed companies can still make solid headway even when demand sinks.
James Hardie on August 11 outlined a robust June quarter profit and chief executive Jack Truong was confident enough to make a full-year forecast for the 12 months ended March 31, 2021, as its plasterboard and wall products wrestled market share away from rivals.
By contrast, trans-Tasman building products company Fletcher Building, owner of Tradelink, Iplex and Stramit, crashed to a full-year loss of $181 million.
Transurban shares were sitting at $16.34 in mid-February before the pandemic hit Australia but plummeted to near $10 in the depths of the sudden sharemarket sell-off by March 23. The stock has since recovered to about $14.
Transurban chief executive Scott Charlton is looking over the horizon to when restrictions ease and economic conditions improve. He expects road traffic numbers will pick up sharply again.
“As you come out of government restrictions the recovery, particularly on the road, happens quite quickly, Mr Charlton said.
But in the short-term Transurban is doing it tough. Average daily traffic on the group’s CityLink toll road in Melbourne, which usually produces about a third of the group’s earnings, was down by about 63 per cent in the first week of August as the southern city went into a hard lockdown.
The fall-off in July was 48 per cent, when Melbourne entered into a stage-three lockdown.
Traffic across all of the toll road group’s operations was down 25 per cent in July.
Transurban said it did not expect to breach any debt covenants within the next 12 months, although some of its toll road assets would enter “distribution lock-up” which means they cannot pay out cash to the parent company.
SEEK chief executive Andrew Bassat has resisted heavy cost-cutting and has an eye on a rebound. SEEK suffered a net loss of $111.7 million for the 2019-20 financial year, largely related to $198.4 million in non-cash impairments. It also will not pay a final dividend.
Mr Bassat said the Australian business was resilient, with revenue sliding by 12 per cent.