MARKET CLOSE: NZ stocks fall as offshore jitters sap solid earnings
Aug. 19 (BusinessDesk) - New Zealand stocks fell for a second session, with the malaise in offshore markets numbers taking the froth off a spate of stronger earnings. Goodman Fielder Ltd. fell after warning it would miss earnings targets and write down bakery assets by A$300 million, and Telecom rose.
The NZX 50 Index fell 18.37 points , or 0.6%, to 3,267.84, but rose 1.6% over the week.
Within the index, 34 stocks fell, nine rose, and seven were unchanged. Turnover was $133.2 million.Goodman Fielder, the Australasian food manufacturer, plunged 15.7% to a historic low of $1.02 after it said profit in its latest year would miss forecasts because of a A$300 million impairment charge against its baking division.
The company said profit in the year ended June 30 would be "slightly below" its April 28 guidance of A$140 million to A$150 million.
The April guidance was also a downgrade as Goodman had previously said earnings would match last year’s A$161 million.Today's decline "probably has more to do with them missing their guidance range rather than the impairment," said Peter Sigley, an institutional broker at Goldman Sachs in Auckland.
"They've got a record of doing that. It wasn't a big miss but it's an indication that the core business is under pressure."
APN News & Media Ltd., the newspaper, radio, and outdoor media company, fell 6.7% to 98 cents, with the stock continuing to slide after it yesterday posted a first-half net loss of A$98.3 million, down from a profit of A$39 million a year earlier.
The result included non-cash pre-tax impairments of A$156 million related to the company’s New Zealand newspapers. Once exceptional items are stripped out, earnings before interest and tax fell 24% to A$66.5 million.
Underlying revenues were flat at A$508.1 million.
Australia & New Zealand Banking Group, the country's biggest lender, fell 3.5% to $24.75 on the NZX, with a 1.3% increase in third-quarter net profit to A$1.4 billion from the Australian parent failing to excite investors.
ANZ shares recently traded 4.1% lower at A$19.59 on the S&P/ASX 200.The bank's local unit more than doubled third-quarter underlying profit after slashing its impairment charge for bad loans and boosting interest income.
Underlying profit, which excludes one-time items, jumped to $311 million in the three months ended June 30 from $120 million in the same period a year earlier.
Nuplex Industries Ltd., the industrial chemicals and resins manufacturer, fell 3.3% to $2.37 ahead of its annual result announcement on Friday. The company yesterday announced that it had reached an agreement to buy rival Acquos Pty’s Masterbatch unit, with the details on the deal due when it delivers its results.
Fletcher Building Ltd. fell 2% to $7.79. The country's biggest construction firm today announced it had won the government contract as part of a consortium to building the $1.3 billion Waterview Connection project, which links up Auckland’s Western Ring Route.
The contract group, called the 'Well Connected Consortium' is made up of Fletcher Construction, McConnell Dowell, Obayashi Corp. and three design companies, Beca, Parsons Brinkerhoff, and Tonkin and Taylor.
Air New Zealand Ltd., the national carrier, fell 1.8% to $1.08. The airline today signaled its intention to raise up to $150 million in five-year bonds next month. The unsecured, unsubordinated fixed-rate bonds would have a maturity date of Nov. 15, 2016, the company said in a statement to the NZX.
Telecom, the country's biggest phone company, rose 4.4% to a two year high of $2.72, leading gainers on the NZX 50 after it posted a pre-abnormal full-year net profit of $386 million in the 12 months ended June 30, up from $380 million a year ago.Once the $257 million write-down to its ageing copper lines is factored in, net profit was $166 million, compared to $382 million a year earlier.
Telecom said it will pay a quarterly dividend of 7.5 cents a share, plus a special dividend of 2 cents a share, taking the annual pay-out to 20 cents.
"The results beat expectations with good core earning plus that special dividend to please investors, and the share price has just lifted off on that," Sigley said.
Michael Hill International Ltd., the jeweller, rose 3.4% to 91 cents after it reported a 32.6% increase in net profit to $34.5 million in the 12 months ended June 30, according to a statement file with the NZX today.
Revenue from ordinary activities rose 10.3% in the period to $489 million, and a final dividend of 3 cents a shares was declared.
Fisher & Paykel Healthcare Corp., the manufacturer of breathing masks and respirators, rose 1.7% to $2.38 after the company announced it will expand production in Mexico and target sales growth in other currencies in a bid to limit its exposure to strong New Zealand dollar.
FPA currently earns about 50% of its revenue in U.S. dollar terms, which has dropped around 6% against the kiwi so far this year.
Heartland New Zealand Ltd., the would-be bank, was unchanged at 56 cents having delivered a maiden annual profit of $7.1 million, after booking $6.8 million in one-time charges for its first year of operation, NZX listing costs, and the proposed acquisition of PGG Wrightson Finance.