Robust trading update from Tauranga Port perks up market

The New Zealand sharemarket had a soft finish to the week but Port of Tauranga provided another positive first-quarter trading update.

Friday, October 25th 2024, 6:43PM

by BusinessDesk

The S&P/NZX fell at the opening but then traded steadily to close at 12,771.61, down 42.46 points or 0.33%.

The index declined more than 0.3% for the week and is now ahead nearly 8.6% for the year. The volumes of 33 million shares worth $126.9m featured the sale of 11.28m Freightways shares at $9.65 a share (worth nearly $109m) held by the largest shareholder Colin McDowell, the founder of Allied Express. Freightways was up 19c or 1.92% to $10.10.

Shane Solly, portfolio manager with Harbour Asset Management, said by the numbers the local market had a flat week but pulling it apart, a lot of paddling has been going on under the water.

“The market has had to absorb plenty of capital raisings, including the chunky blocks of Freightways and Scales Corp shares. And the range of trading updates at the annual meetings has not been as negative as the market expected, with the potential for company earnings to turn.

“The local market has done alright,” Solly said. “Port of Tauranga had a reasonably robust first quarter with a solid profit guidance showing an increase of 8%-18%.”

The port company was up 3c to $5.95 after reporting total trade volumes were up 7.6% to 6.2m tonnes up 7.6%, and container volumes increased 16% to 293,000 TEUs (20-foot equivalent units) compared with the same September quarter last year.

Full-year earnings were upgraded to $110m-$120m compared with group profit of $102.7m in the previous year.

Port of Tauranga told shareholders at the annual meeting that it will introduce electric automated stacking cranes when it is constructing the new berth at the container terminal to increase capacity and help decarbonisation.

Confidence and inflation

After three months of improvement, the October ANZ-Roy Morgan Consumer Confidence Index declined 4 points to 91.2, with a net 14% of respondents expecting to be better off this time next year – a fall of 11 points. Perceptions of current personal financial situations fell 6 points to minus 22%.

ANZ said the good news for households is the Reserve Bank has accelerated the pace of easing and is likely to deliver another 50 basis points cut in the official cash rate by the end of the year, bringing relief a little closer.

The inflation challenges of the past few years that have battered consumer confidence are drawing to a close. That adjustment certainly hasn’t been without cost, and those costs will continue to be felt into next year, but brighter times lie ahead, ANZ said.

Westpac produced new forecasts for the next year with gross domestic product at 2.3% growth, inflation 2%, official cash rate 3.5% and house prices increasing 8.2%.

Fisher & Paykel Healthcare eased 26c to $36.84; Mercury Energy was down 8.5c to $6.61; a2 Milk declined 17c or 2.6% to $6.36; Chorus decreased 20c or 2.33% to $8.78; Tower shed 4.5c or 3.35% to $1.30; and Vista Group was down 7c or 2.36% to $2.90.

Ventia Services fell 27c or 5.08% to $5.05; Scott Technology was down 4c or 2.12% to $1.85; Comvita shed 4c or 3.39% to $1.14; and Millennium & Copthorne Hotels NZ decreased 7c or 3.95% to $1.10. Vulcan Steel was down a further 20c or 2.41% to $8.10.

Ebos Group increased 45c to $37.35; Mainfreight was up 74c to $72.75; Spark gained 3.5c to $2.995; Michael Hill added 3c or 5% to 63c; Scales Corp collected 10c or 2.6% to $3.94; and Santana Minerals was up 4.33c or 5.65% to 81c after its share split.

NZ Windfarms increased 1.2c or 9.68% to 13.6c after buying the 8.65MW Wairarapa Hau Nui wind farm from Genesis Energy. Five of the 15 turbines are not currently operating but will be refurbished.

The company upgraded its full-year operating earnings (ebitdaf) guidance to $4.5m-$6, from $3m-$5.5m, because of extra generation from the existing Te Rere Hau wind farm near Palmerston North.

Blackpearl Group was up 5c or 3.85% to $1.35 after earlier telling the market that its $2m share purchase plan offer at $1.25 a share closed oversubscribed, following the placement of $10.5m.

Tags: Market Close