Mercury Energy was down 10c to $6.09. Photo / Supplied
The New Zealand sharemarket, now well into the reporting season, slipped nearly 1 per cent as stock prices readjusted to earnings value based on their latest financial results.
The S&P/NZX 50 Index was trading steadily until a late afternoon fall and closed at 11,801.49, down 94.55 points or 0.79 per cent after reaching an intraday high of 11,929.06.
The index has fallen 2.84 per cent in the last two trading days, wiping out a lot of the recent strong gains. The index has now gained 2.9 per cent for the year, after earlier reaching 6 per cent.
There were 51 gainers and 77 decliners over the whole market on volume of 39.81 million share transactions worth $142.47 million.
David McConnochie, investment adviser with Forsyth Barr, said it was a day of consolidation for the local market, as analysts recalculated earnings forecasts. There were few offshore leads with the United States markets closed for the Presidents’ Day holiday.
“The reporting season is a show and tell and some share prices may have got ahead of their valuation. The market is readjusting to the earnings coming through and some stocks are being priced back.
“There has been selling pressure on the likes of Fisher and Paykel, a2 Milk and Mercury - they had risen as much as 15 per cent – and the Ryman capital raise with the rights trading underway is weighing on the market,” McConnochie said.
Market leader Fisher and Paykel Healthcare was down 41c to $25.79; a2 Milk declined 39c or 5.43 per cent to $6.79, falling nearly 13 per cent in two trading days; Chorus shed 18c or 2.2 per cent to $7.99; Meridian decreased 8c to $5.26; and Mercury Energy was down 10c to $6.09.
Mercury Energy reported a 46 per cent fall in net profit to $230m on revenue of $1.299 billion, up 49 per cent for the six months ending December. It is paying an increased interim dividend of 8.7c a share on April 3.
Hydro production increased 852GWh to 2735GWh after Lake Taupō experienced its highest ever inflows for the July to December period. Mercury confirmed its full-year operating earnings (ebitdaf) at $795m with hydro production expected to increase to 4900GWh, from 4500GWh.
McConnochie said Mercury had a pretty solid result, with their new wind turbines coming online and helping their revenue.
Vector was up 1c to $4.01 after reporting a 13.2 per cent fall in net profit to $100.3m on revenue of $616m, up 8.4 per cent, for the six months ending December.
Operating earnings (ebitda) were $274m, up 3.9 per cent, and Vector is paying an interim dividend of 8.25c a share on April 6. Its full-year ebitda guidance is $515m-$525m.
Ryman Healthcare was down a further 20c or 3.48 per cent to $5.55 after opening its retail offer following the institutional bookbuild which raised a total of $542m. The offer of one new share for every 2.81 held at $5 a share remains open to March 6 with the intention of raising a further $360m.
Freightways, which is paying an 18c interim dividend, rebounded 20c or 2.13 per cent to $9.61; MHM Automation was up 4c or 4.82 per cent to 87c; Green Cross Health gained 4c or 3.05 per cent to $1.35; and NZ King Salmon Investments collected 1c or 4.44 per cent to 23.5c.
Skellerup Holdings was down 11c or 2.19 per cent to $4.91; Synlait Milk declined 7c or 2.01 per cent to $3.41; Precinct Properties decreased 5c or 3.95 per cent to $1.215; and My Food Bag shed 2c or 7.41 per cent to a new low of 25c.
Retailers Michael Hill gained 2c or 1.89 per cent to $1.08; Hallenstein Glasson was down 16c or 2.75 per cent to $5.66; and Briscoe Group declined 7c to $4.75.
Rural services company PGG Wrightson, down 3c to $4.33, reported a steady half-year result with revenue up 6 per cent to $585.79m and net profit decreasing 6 per cent to $21.15m.
PGG is paying an interim dividend of 12c a share on April 4 and said “we hold a degree of caution for the remainder of the financial year given the volatility in the macro-operating environment.”
Other decliners were AFT Pharmaceuticals down 9c or 2.47 per cent to $3.55; Eroad falling 5c or 5.68 per cent to 83c; and CDL Investments shedding 3.5c or 4.46 per cent to 75c.
Sky TV was unchanged at $2.56 after confirming a proposed restructure that could see around 170 roles axed - 90 jobs in technology and content operations teams and around 80 in customer care.
Wine exporter Delegat Group, up 5c to $9.45, told the market its Hawke’s Bay vineyards were not significantly damaged by Cyclone Gabrielle and “we are on track for a successful harvest commencing around the end of February.”
Manuka honey producer Comvita, unchanged at $3.40, said the level of destruction in the Hawke’s Bay area can only be described as catastrophic and its own extraction plant is likely to be written off. It is covered by insurance and will not impact financial results.