Bingo Industries, a Syndey-based waste management company, was the worst performing stock inside the Australian Stock Exchange (ASX)'s benchmark index on Monday (Feb.18), falling 49.1 per cent to A$1.17 from A$2.30 the previous session.
The stock sank after Daniel Tartak, the company's Managing Director and CEO, told investors Bingo was the latest casualty of the country's rapidly slowing property market, which had dented demand for the group's multi-dwelling residential construction services.
Bingo Industries together with its subsidiaries, operates residential and commercial waste services, recycling services, bin manufacturing. In November 2017, the company acquired NRG, Building & Demolition (B&D) business.
“In addition, competition in the Building & Demolition (B&D) collections market has put downward pressure on pricing, impacting the company's margins” the company said.
It also announced it expected its underlying earnings to be "broadly in line" with last year. It had previously forecast underlying EBITDA growth in the range of 15%-20%
“I think what Bingo is telling us is that overall the property cycle is weak and it’s going to remain weak,” Mathan Somasundaram, market portfolio strategist at stockbroker Blue Ocean Equity told Reuters.
After a decade-long boom, the Australian property and construction market has been experiencing a downturn. Last year, prices dropped 4.8%, prompting Deutsche Bank to identify a potential Australian housing crash as one of the top 30 economic risks to look out for in 2019.
Fitch Ratings also warned that Australia will see the world's biggest house price declines this year. The credit rating agency forecast Australian house prices would decline a further 5 per cent this year, on top of a 6.7 per cent decline from the peak so far.
Bingo Industries was listed on the Australian Stock Exchange (ASX) on May 3, 2017, becoming a public company with a launch share price of A$1.85, earning its founders around A$452 million whilst retaining a 30 percent stake. The company employs over 700 staff.
Further detail regarding Bingo's performance for the 2019 financial year will be provided in its results announcement on Tuesday, 26 February 2019.