UDC is active in financing heavy machinery in the primary sector. Photo / NZME
UDC Finance is accounting for an increase in expected credit losses, with its latest financial statements showing provisions at March 31 were up 38%, compared with the previous reporting period.
The Auckland-based company, formerly owned by ANZ Bank and now a subsidiary of Japanese financial group SBI Shinsei, recorded an estimated provision for expected credit losses (ECL) on loans and advances of $100.15 million at its March balance date.
This was up from the $72.37m recorded at its previous balance date of January 1, 2024.
UDC, which lends primarily on vehicles, plant, equipment and machinery, noted that the overall provisioning for credit impairments was approximately 2.1% of its $4.8 billion loan book, up from 1.5% in December 2023.
The company booked a credit impairment charge of $39.8m in the 15 months to March 31, during which the New Zealand economy was in and out of recession at various times.
UDC continues to make improved profits, with its accounts showing net income rose 39% to $249.84m in fiscal-year 2025 (FY2025), with after-tax net profit up 29% to $95.6m.
The company last year bought a $238m New Zealand loan portfolio from the Bank of Queensland. The portfolio consists of commercial loans, finance and operating leases originated and serviced by BOQ Finance (NZ) and BOQ Equipment Finance.
SBI Shinsei purchased UDC from ANZ in 2020 for $762m.
Planned price increases by the Port of Tauranga (POT) have analysts predicting it will continue to have strong earnings momentum into its next financial year.
The port reported underlying net profit after tax of $126m last week, up 23% on FY2024 and at the top end of its guidance range.
Forsyth Barr’s Andy Bowley and Hugh Lockwood have upgraded the company to an outperform rating after the strong result and raised their target price from $7.95 to $8.
They said price growth remained the port’s key lever to improve its margins and return on invested capital.
The port plans to double its container infrastructure levy from December and has already more than doubled its vehicle access charge at MetroPort and introduced a new heavy truck charge for bulk products.
But it is also facing ongoing higher costs for third-party stevedoring, direct labour, maintenance, rates and IT, with management suggesting operating expenditure growth will be above inflation again in FY2026.
“Price growth remains POT’s key lever to improve margins and ROIC [return on invested capital].”
The analysts calculated the port currently has an ROIC of 4.8%. It is targeting a 7% ROIC on its operational assets by FY2028.
In order to do so, it is likely to sell some of its non-core properties, including MetroPort, Rolleston and two small properties in Mount Maunganui over the near term, they said.
Craigs Investment Partners also upgraded its target price after the result, lifting it from $6.60 to $7.32.
Analyst Wade Gardiner described the result as “solid”.
“The outlook statement was positive but cautious. POT indicated expected revenue growth of 8% in FY2026, which largely comes from shipping-line contract renewals, and is heavily weighted to 2H.
“This implies an even greater underlying increase, with FY2027 reflecting a full year of the increases. While this is positive, we had already factored in a high rate of tariff increases, so the uplift on our estimates is less.”
Gardiner said the port also indicated a “reset” of the rail contract with KiwiRail that should help to reduce rail costs and better aligns volume risks.
“As well as lowering rail costs, we expect it may help to boost Metroport volumes, although the impacts are hard to gauge at this stage.”
He lifted his core port ebitda (earnings before interest, tax and amortisation) forecast for FY2026 by 3.2% from $249.8m to $257.9m, implying a 12.9% increase on FY25.
Shares in Port of Tauranga opened at $7.39 on Thursday and are up more than 33% over the last year.
Wine producer Delegat Group got a celebratory cheers from analysts at Jarden this week, with an upgrade to a “buy” rating on the stock over greater clarity on its future sales.
Delegat, whose brands include Oyster Bay, reported revenue of $349.6m for the year to June 30 – down 7% on FY2024.
Its operating earnings before interest, tax, depreciation and amortisation were down 9% to $116m.
The company has been hit by lower sales as a result of tough global economic conditions, including the introduction of US tariffs, supply chain disruption and retailers trying to move on existing inventory.
But it is forecasting a lift in its case sales of 13% over the next three years.
Jarden’s Guy Hooper and Nick Yeo said their upgrade was driven by greater clarity on forward case sales.
“While industry challenges remain, the greater clarity around volume forecasts and improving margins provide us greater confidence in the earnings outlook.”
But while they upgraded their rating on the stock, the analysts lowered their 12-month target price from $6.40 to $6.10 “on the back of earnings changes and risk-free rate updates”.
The pair said they were taking a more conservative view on case sale volumes and had lowered their forecast to -4% for FY2026 and -8% for FY2027.
They lifted forecasts on operating net profit after tax (npat) by 13% to $51m, which was at the bottom end of the company’s guidance.
Delegat is forecasting FY2026 operating npat of $50m-$55m.
Shares in Delegat Group opened at $4.44 on Thursday and are down more than 20% for the year.
Sweden’s “buy now, pay later” financial firm Klarna has announced plans to raise US$1.27b ($2.16b) in a listing on the New York Stock Exchange, after a previous plan was delayed amid market volatility.
Klarna had announced plans for an initial public offering in November but its first effort was postponed earlier this year.
The firm did not give a date for the new listing plan but said in a statement that its shares would be sold for between US$35 and US$37 apiece.
The top price range would give the company a market value of US$14b.
The company, founded by three students in 2004, allows shoppers to pay up to 30 days after placing an order or to make purchases in four instalments without interest.
The group made a net profit of US$21m last year on revenue of US$2.8b, with most revenue coming from commissions paid by online retailers. It also earns some interest income on longer-term financing of consumer purchases.
The company plans to offer 34.3 million shares, of which an overwhelming majority of 28.7 million are coming from existing investors who are ceding their shares.
Danish businessman Anders Holch Povlsen, owner of the retail clothing chain Bestseller, plans to sell around 6.3 million shares.
The company, which entered the US market in 2019, has seen its valuation yo-yo over the years. It was valued at US$45.6b in 2021 in the wake of the pandemic consumer spending boom, but the following year it fell to US$6.7b as inflation and interest rates climbed and investors turned cold on tech firms.
Commonwealth Bank of Australia, which owns ASB, has a stake in Klarna worth about A$1.2b ($1.33b) and the bank is expected to sell shares worth about A$100m ($111m) as part of the listing, according to the Australian Financial Review.
– additional reporting Duncan Bridgeman, AFP
Tamsyn Parker has been Business Editor at the New Zealand Herald since April 2023. She was previously the Personal Finance Editor and has been with the Herald since 2007.