NZ shares fall with F&P Healthcare

New Zealand shares fell as Fisher & Paykel Healthcare declined from high levels ahead of its full-year earnings result on Thursday.

Tuesday, May 25th 2021, 7:32PM

by BusinessDesk

The S&P/NZX 50 Index declined 107.81 points, or 0.9%, to 12,341.19. Within the index, 23 stocks fell, 18 rose and nine were unchanged.

F&P Healthcare led the decline, falling 3.7% to $32.75. The stock has been as high as $36.50 this year but appears to be moderating ahead of its earnings result on Thursday.

Forsyth Barr analysts said investors already know the healthcare exporter will have an exceptional year and will focus on any hints about 2022 earnings.

“We expect it will be difficult for FPH to provide much guidance, however, any insights into clinician behaviour as covid-19 demand has slowed/subsided or country-specific examples to add greater colour is a key area of focus.”

Equity analysts are forecasting 2022 net profit to land anywhere between $359 million and $443m – depending on how covid-19 hospitalisations track during the year – a significant decline from the $545m expected on Thursday.

Sam Trethewey, a portfolio manager at Milford Asset Management, said investors were showing some caution about the strength of the company’s long-term earnings.

Z Energy today agreed in principle to allow New Zealand Refining Company to close its crude oil refinery and convert the site into an import terminal only. Z’s share price was unchanged at $2.62, while shares in the refinery jumped 7.2% to 60 cents.

The fuel retailer owns a 15.4% stake in the refinery, but the deal still requires final sign off by the directors and other shareholders of Refining NZ, including BP and Mobil.

Trethewey said the news had been well received by investors because it provided more certainty about the future of the refinery.

My Food Bag shares bounced 10.7% to $1.50, after two of its directors took the opportunity to snap up more shares after Friday’s earnings result.

Shares in the meal-kit company dropped as low as $1.34 following the result, prompting chair Tony Carter to buy up 20,000 shares and Jon Macdonald to purchase 10,000 shares.

Trethewey said the directors buying was a promising sign the company was on track to achieve its goals. He also noted a large transaction had been done at $1.33, which may have cleared out a large seller.

“Some investors took part in the IPO hoping for some quick share price appreciation, which hasn’t happened,” he said. Once those sellers have cleared their stock, there will be more upwards pressure on the stock.

Contact Energy has floated the idea of lumping together the country’s fossil fuel electricity plants into one entity to manage coal and gas out of the system.

Investment analysts have said it is an idea worth exploring and have swiftly dubbed it 'Waiting-to-Die-Co'. The purpose of the new corporation would be to manage the exit of dirty energy from the NZ electricity system.

Arvida's annual net profit rose more than three-fold as a result of unrealised property revaluations but the underlying result was flat because of the impact of covid-19. Its share price rose 1.1% to $1.83.

Napier Port reported a net profit after tax of $10.6m for the past six months down from $11.1m in 2020 - once adjusted for non-recurring gains the prior year.

The port reinstated its interim dividend and will pay $5.6m to shareholders, or 2.8 cents a share, but the share price slid 2.1% to $3.28 today.

Tomorrow’s monetary policy statement from the Reserve Bank of New Zealand will be closely watched, as rising interest rates are one the biggest risks for the NZ share market right now.

The central bank is expected to keep its cautious tone despite some inflationary pressures appearing, as many economists believe they are temporary

The kiwi dollar was trading 72.15 US cents at 3pm in Wellington, up from 71.70 cents yesterday.

The trade-weighted index was at 74.93 at 3pm, from 74.64 yesterday. The kiwi traded at 93.06 Australian cents from 92.83 cents, 78.47 yen from 78.10 yen, 59.02 euro cents from 58.85 cents, 50.93 British pence from 50.70 pence, and 4.6280 Chinese yuan from 4.6153 yuan.

Tags: Market Close