NZ sharemarket ends week down 0.8%
Synlait Milk rose nearly 20% after indicating a return to profitability as the New Zealand sharemarket drifted to a small decline on light trading.
Friday, January 24th 2025, 7:18PM
by BusinessDesk
The S&P/NZX 50 Index had a short rise early afternoon to 13,072.69 and closed at 13,024.7, down 35.38 points or 0.27%. The index finished the week with a fall of 0.8% and is down more than 0.2% for the year.
Volumes on the day before Auckland Anniversary Weekend were light, with 23.78 million shares worth $75.45m changing hands.
Matt Goodson, managing director of Salt Funds Management, said the market was dead quiet – many participants were away ahead of the long weekend.
Late in the day, the Bank of Japan announced it was raising short-term interest rates by 0.25% to 0.5% – the highest level in 17 years.
Japan’s core inflation rose 3% in December from a year earlier, the highest in 16 months, driven by high rice prices and cutting government energy subsidies.
Goodson said markets were expecting the increase in interest rates, and Japan has certainly moved away from its zero-rate era.
Local stocks
At home, Synlait Milk rose 8c or 19.05% to 50c after telling the market it expects operating earnings (Ebitda) of $58m-$63m for the six months ending January compared with $19.9m in the previous corresponding period. Synlait previously had a half-year net loss of $96.2m.
The dairy processor said the ingredients business was performing strongly, the advanced nutrition products were growing, and reduced costs were helping the bottom line.
Synlait will pay an additional 10c per kg/MS for the next three seasons to its South Island farmers without a cease (to supply) notice in place.
Goodson said it was the first sign of light at the end of what has been a long, dark tunnel for Synlait.
“It’s a better-than-feared performance in an environment of high milk prices. As a product manufacturer, it can be difficult to pass the prices on, and Synlait looks to have had a pretty good outcome.”
Goodson said the market was forecasting full-year ebitda in the mid-$70s compared with the half-year estimate of $58m-$63m. But there’s a degree of seasonality in that estimate.
Fisher and Paykel Healthcare retreated 93c or 2.37% to $38.39 on trade worth $11m; Spark was down 4.5c to $2.90; Scales Corp declined 12c or 2.86% to $4.07; Scott Technology decreased 6c or 2.61% to $2.24; Steel & Tube shed 3c or 3.49% to 83c.
Vulcan Steel declined 25c or 3.13% to $7.75; Winton Land fell 9c or 4.59% to $1.87; Vista Group was down 8c or 2.47% to $3.16; and NZ King Salmon Investments shed 1.5c or 6.25% to 22.5c.
Ebos Group was up 44c to $37.01; Mainfreight collected 62c to $71.12; Serko added 7c or 1.89% to $3.78; and Oceania Healthcare gained 2c or 2.53% to 81c.
Ventia Services increased 14c or 3.33% to $4.34; Sanford was up 12c or 2.64% to $4.67; and Pacific Edge rebounded 0.003c or 5.45% to 5.8c.
'A mix of good volumes'
Genesis Energy increased 10c or 4.57% to $2.29 after reporting total generation was down 205GWh for the second quarter, with renewable generation in line with the previous corresponding period and thermal down 42%.
Genesis said it continued to progress its flexible strategy, maximising margin leverage from generation options against wholesale market dynamics. Retail customer growth was 4.7%.
Goodson said it was a very good quarterly performance from Genesis, an under-performer amongst the gentailers.
“In the late winter, Genesis had to buy expensive gas, and then the electricity prices fell away. But Genesis has a mix of good volumes via connections and the flexibility of its generation suite.”
Elsewhere in the energy sector, Contact was up 12c to $9.60, and Vector was down 12c or 3.02% to $3.86.
KMD Brands increased 1c or 2.41% to 42.5c after telling the market that sales trends are improving since the first quarter trading update, with online sales increasing 18.4% year-to-date.
Rip Curl’s sales were down 2.9% for the five months ending December, Kathmandu was down 0.4%, and Oboz shoes fell 7.7%. Group sales were down 2.5%.
For the two months of November and December, Rip Curl was up 2.2%, Kathmandu gained 1.7%, and Oboz was down 5.1%. Group sales were up 1.7%.
KMD expects operating earnings (Ebitda) of $1m-$3m for the first half compared with $15.1m in the previous corresponding period.
Michael Hill was down 1c to 59c after signalling operating earnings before interest and taxes of $22.5m-$24m for the first half compared with $31.3m for the same period in 2024.
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