SkyCity Entertainment Group could be feeling the impact from fewer Chinese tourists. Photo / Peter Meecham
SkyCity Entertainment Group could be feeling the impact from fewer Chinese tourists. Photo / Peter Meecham
Every reporting season the analysts say it is the forward-looking statements that they pay the most attention to.
But this season, which kicks off on Monday with power company Contact Energy, those future predictions could be more essential than ever with two major issues hanging over the market.
Many NewZealand companies are facing the flow-on effects from the global threat of coronavirus and on the home front the power companies - which make up 20 per cent of the NZX50 - are being weighed down by a decision over the future of the Tiwai Point NZ Aluminium Smelter.
Most of those reporting are providing half-year updates for the six months to December 31 and it wasn't until after then that the first reports of coronavirus began to emerge.
That means any impact won't be baked into the hard data but those in the tourism, primary produce and export sectors will be expected to give some kind of feel for how it is affecting their businesses.
So far only Tourism Holdings has given a forecast downgrade citing coronavirus as one of the reasons but all eyes will be on the likes of Air New Zealand and Auckland Airport.
Milford Asset Management's Sam Trethewey said Air New Zealand may have some indication from its forward bookings but for others it could be hard to predict the impact of the virus, which has yet to hit its peak.
One less obvious tourism player that is also likely to be feeling nervous about the virus is casino operator Sky City Entertainment Group, which reports on Thursday.
The company's share price is down more than 10 per cent since mid-January. Many of its high roller or VIP business comes from the Chinese market.
Group tours from China have been stopped while independent travellers won't be able to get past immigration at the New Zealand end at the moment with all travellers from China barred from entering the country, although that is subject to review.
Earlier this week officials in the Chinese city of Macau - seen as the world's gambling capital - asked its 41 casinos to close for half a month to stop the virus spreading.
That's likely to hit American casino operators Wynn Resorts and Las Vegas Sands in the pocket.
LOG PILE UP Log exporters Port of Tauranga and Napier Port will also have been caught up with factories in China declining to take more wood, with many businesses remaining closed in the extended Chinese New Year holiday.
Trethewey said the ports could face short-term earnings pressure if there was prolonged disruption of log exports.
Primary food producers like Scales Corporation which exports apples to China, honey firm Comvita and a2 Milk - one of the market's largest stocks - could also be feeling the contagion effects.
Trethewey said he had spoken to a couple of experts up in China about the challenges.
"We are hearing a lot workers will have been on Chinese New Year holiday and will have had that extended. We are waiting to see if that is extended again and any further closure of cities."
He expects updates on that in the next week or two.
The power companies are awaiting a decision on the future of Tiwai Point Aluminium Smelter. Photo/Supplied.
POWER PLAY? There are also high hopes that Contact Energy or Meridian Energy will give an update on Tiwai Point with Rio Tinto giving itself until March to make a call on whether to close the smelter.
Both Contact and Meridian are said to have been heavily involved in the talks about Tiwai Point which is a major employer in Southland.
Harbour Asset Management's Shane Solly said it could be too soon to get anything definitive on Tiwai given the negotiations were ongoing but any update would be welcomed.
Solly said consensus New Zealand market earnings per share growth for the next year was in the 2-3 per cent range – which was below long-term average growth rates meaning investors were going into the results season with modest expectations.
"But a worse-than-expected NZ market earnings season could be the trigger for some profit taking."
Are subscribers still switching off Sky TV? Photo/ Dean Purcell.
VIEWER NUMBERS The other major to report will be pay TV operator Sky TV on Wednesday. Solly said analysts were looking to see if its range of strategies had stemmed the loss in subscriber numbers.
Solly said consumers were wary about their spending on pay TV and wanted to make sure they were getting value for money.
Analysts will also be looking for more detail on Sky's recent acquisition of Lightbox from Spark and how its merger with Neon will work.
