MARKET CLOSE: NZ shares fall as earnings dominate; NZX, Telecom, Port of Tauranga drop
Aug. 22 (BusinessDesk) – New Zealand shares fell, giving up much of the previous day’s gains, with trading dominated by earnings season. Port of Tauranga slipped after posting record profit that met estimates, stock market operator NZX dropped and Telecom declined ahead of its results tomorrow.
The NZX 50 Index fell 21.646 points, or 0.5 percent, to 4529.862. Within the index, 20 stocks fell, 19 gained and 11 were unchanged. Turnover was $141 million.
Port of Tauranga, the nation’s busiest export port, fell 2.4 percent to $14.35. Net profit of $112.1 million in the year ended June 30 was up 52 percent on the previous year and was close to First NZ Capital’s expectation of $112.9 million. The company won’t provide guidance until its annual meeting on Oct. 24.
NZX fell about 3 percent to $1.31. The market operator doubled first-half profit as it benefited from new listings, a surge in trading activity and fees for running market operations, making up for a drought-impacted NZX Agri division.
Trade me, the auction website, fell 1.8 percent to $4.40 after Australia’s Woolworths agreed to buy online retailer EziBuy for $350 million, potentially adding to competition for consumer dollars.
“That could be sending negative sentiment into the wider retail sector,” said Greg Easton, an adviser at Craigs Investment Partners. Woolworths “will want EziBuy to work a bit harder.”
Easton said the market “is proving to be a bit more volatile” as investors react to company results. Earnings had largely beaten expectations “and we’re also seeing a lot of increased dividends which is what we all want to see,” he said.
Telecom shares dropped 2.8 percent to $2.25 after a network outage cut customers’ mobile data services. The outage comes ahead of Telecom’s annual earnings tomorrow, and the country’s biggest phone company is expected to post profit of $263.7 million, according to First NZ Capital estimates.
Vector gained 0.4 percent to $2.65 after reporting a 2.3 percent lift in annual profit to $203.3 million, propped up by improving revenue stream in its unregulated smart meters and telecommunication network operations.
The biggest gainer was Skellerup Holdings, which climbed 4.4 percent to $1.41 after the rubber goods maker beat earnings guidance with annual profit of $19 million. The company had already issued two profit warnings as the drought in the North Island sapped local demand and as its international businesses lagged expectations.
Units in Vital Healthcare fell 0.6 percent to $1.40 after the health-related property investor reported a 21 percent gain in distributable earnings to $28.2 million on a bigger portfolio.
Rakon was unchanged at 23 cents after the navigation components maker released its notice of special meeting for shareholders to approve the sell-down of its stake in a Chinese factory to about 5.4 percent. Independent adviser Grant Samuel backed the deal, saying it was better for shareholders than the alternative which would be to liquidate the facility.
Shares in South Port were unchanged at $3.25 after the Bluff port operator reported a record profit of $6.5 million, in spite of dwindling export volumes from the Tiwai Point aluminium smelter.
Moa Group sank 7.7 percent to 72 cents, a new low, two days after its annual meeting where executives were quizzed over plans to improve its troubled distribution which will leave the Australasian growth plans running six to nine months behind schedule.
Shares in Bathurst Resources jumped 16 percent after the would-be coal miner reported a loss of $301,000 after the close of trading yesterday. The mining company’s plans to dig up high quality coking coal on the West Coast have been held up by appeals, which have almost been exhausted.