Mixed forecast for report cards

Photo / APN

The reporting season gets into full swing this week when NZX-listed Contact Energy and state-owned power generator Meridian Energy report their results for the June year.

Today

Express package company Freightways will set the ball rolling for the week, when it reports its annual result. Market expectations are for a net profit of around $36 million, up from $31 million a year earlier. The company enjoyed a 20 per cent increase in net profit to $18.9 million in the first half, and has said a gradual improvement was expected in the second half.

Meridian Energy - by far the biggest of the state's power generators - will report its result for the year. In a market update, Meridian, which is on the Government's list for partial privatisation, said it had suffered its lowest inflows in 79 years to two of its key hydro catchments, which affected power generation in the fourth quarter. Meridian's customer numbers also fell in the final quarter.

NZX is set to report its result for the six months to June 30. The stock exchange operator expects a net profit of between $3 million and $4 million, compared with a net profit of $4.5 million last year.

Opus International Consulting, the engineering consultancy, will report its result for the six months to June. Brokers Forsyth Barr expect a 32 per cent increase in Opus' first half profit to $13.1 million. They expect the result to be buoyed by the Christchurch rebuild, some big Australian contracts, and by improvements in its United Kingdom business.

Tomorrow

Market expectations for Contact Energy, just over half owned by Australia's Origin Energy, are for a net profit of $170.9 million, up from $150.3 million a year earlier. Analysts expect the company to report earnings before interest, tax, depreciation, amortisation and financial instruments (Ebitdaf) of close to $500 million - up from $441 million in 2010-11.

Morningstar analyst Nachi Moghe expects Contact to report Ebitdaf of $480 million and a net profit of $160 million. The result will be an improvement on the previous year, partly due to lower gas prices Contact had to pay under its take-or-pay agreement.

Wholesale electricity prices were higher over the year, which meant Contact was able to sell a higher proportion of its electricity into the lucrative spot market, Moghe said.

Food group Goodman Fielder will also report its annual result tomorrow. The company has said its normalised earnings before interest and tax (Ebit) and significant items was expected to be at the lower end of a A$230 million to A$245 million range.

Wednesday

SkyCity Entertainment reports its annual result on Wednesday.

The casino operator has said its normalised net profit for 2011-12 would be in the low $140 millions, down from a previous forecast of a profit in the high $140 millions, but still a solid improvement on the previous year's profit of $130.9 million.

However, SkyCity has suffered from a softening in trading conditions in Australia, particularly in Adelaide.

Market expectations are for AMP NZ Office to report a decline in net profit to around $52 million from $61.1 million a year earlier, due in part to the impact of lease expiries.

Friday

Challenging conditions in the international resins markets are expected to translate into flat earnings for Nuplex. The company is expected to report earnings before interest, tax, depreciation and amortisation (Ebitda) of around $131 million, compared with $130.9 million in the previous year.

Australia's puzzling two-speed economy is expected to play a part in Michael Hill International's annual result.

Market expectations are for a flat net profit of around $34 million. Australia, which accounts for 67.5 per cent of Michael Hill's sales, is by far its most important market.

In a trading update, Michael Hill said on a same-store basis sales fell by 3.2 per cent in the year, but gained by 7.3 per cent in New Zealand. Canadian sales were up 0.7 per cent and US store sales were up 11.7 per cent.

The company said the year had been a challenging one.