NZ market falls as earnings season kicks off

New Zealand’s earnings season kicked off today with Contact Energy first out of the gate and a surprise earnings downgrade from Fletcher Building, which dragged the local index lower.

Monday, February 13th 2023, 6:10PM

by BusinessDesk

The S&P/NZX 50 index fell 103.6 points, or 0.9%, to 12,075.18. Turnover was $91.4 million.

Peter McIntyre from Craig’s IP said building and healthcare stocks had helped drag NZ’s market lower today as shareholders wrapped their heads around gloomy company updates.

Fletcher Building fell 5.4% to $5.13 and traded almost $19m by the end of the day. It surprised the market this morning by announcing its first-half results which were to be officially released this Wednesday.

The company downgraded its full-year guidance but revealed its first-half operating profit was up 8%. Earnings before interest and tax (Ebit) for the year ending June are now expected to come in between $800m and $855m.

This is down from its previous guidance of $855m or more, which Fletcher said reflected the bad weather in January and February.

“These latest weather-related events could cause disruption with the workflow, but, also, on the other hand, it may be a benefit to them too, in the longer run,” McIntyre said.

Energy retailer Contact Energy also announced its first-half result today. In doing so, it revealed a $120m pre-tax write down caused by reduced storage capacity in the Ahuroa gas storage facility in Taranaki had pushed the company to a net $7m loss for the six months to Dec 31.

As a result, Contact’s net profit for the half was still down 41% to $79m from $134m in the same period a year earlier.

Contact Energy managed to edge up 0.5% to $7.82 by early evening.

Auckland-based electricity lines company Vector was up 0.7% to $4.33. It announced this afternoon that about 13,000 homes were without power.

“The numbers continue to go up and down,” Vector said in an update. “Thousands have been restored since our previous update, while new ones have cropped up, and some are taking much longer to reach and fix.”

Across other energy retailers, Genesis Energy was down 0.2% to $2.865, Meridian fell 1.1% to $5.33, Mercury Energy edged up 0.7% to $6.33 and Manawa Energy was down 1.6% to $5.42.

ANZ Bank was down 1% to $28.10. Westpac also fell 1.3% to $25.90.

Westpac extended its relief options today for customers in regions affected by the cyclone which include Tairāwhiti, Northland, Auckland and Thames-Coromandel.

Summerset Group also helped drag the market lower and fell 2.8% to $9.70. Meanwhile, Ryman Healthcare jumped 3.2% to $6.53.

The NZ dollar was trading at 63.06 US cents at 3pm in Wellington today, up slightly from 63.27 US cents at the same time on Friday.

Tags: Market Close