MARKET CLOSE: NZ stocks fall as APN earnings disappoint

MARKET CLOSE: NZ stocks fall as APN earnings disappoint, AMP rises

By Jason Krupp

Aug. 18 (BusinessDesk) - New Zealand stocks fell for the first time is six sessions, APN News & Media Ltd. disappointing analysts and leading the index lower. AMP Ltd. was the biggest gainer.

The NZX 50 Index fell 3.88 points, or 0.1%, to 3,286.21. Within the index, 20 stocks fell, 18 stocks rose, and 12 were unchanged. Turnover was $92.6 million.

APN, which publishes the New Zealand Herald newspaper and operates the Radio Network, fell 7.1% to $1.05 after it posted a first-half net loss of A$98.3 million, compared to a profit of A$39 million a year earlier.

The result included non-cash pre-tax impairment of A$156 million related to the company's New Zealand newspapers. Once exceptional items are stripped out, earnings before interest and tax fell 24% to A$66.5 million. Underlying revenues were flat at A$508.1 million.

The shares recently traded 10.7% lower on the ASX at a record-low 79.5 Australian cents.

"The results were at the bottom end of their range, and they’ve been slapped down pretty hard, here and in Australia," said James Lindsay, equities manager at Tyndall Investment Management. "There was that impairment on the newspaper side, and they haven't been helped by the floods in Queensland or the earthquake in Christchurch."

Restaurant Brands NZ Ltd., the fast food franchise operator, fell 4.3% to $2.25. Methven Ltd., the tapware manufacturer, fell 2.8% to $1.40.

Australia & New Zealand Banking Group, the country's biggest lender, fell 1.9% to $25.65. Fisher & Paykel Appliances Holdings, the whiteware manufacturer, fell 1.8% to 54 cents.

Telecom Corp. fell 1.7% to $2.605 ahead of tomorrow's earnings result, with broker Forsyth Barr predicting the country's biggest phone company will post a normalised net profit of $350 million, 7.9% lower than a year ago.

The announcement will likely be Telecom's last, as it prepares to carve itself in two after securing the bulk of the Government's broadband network contract.

"The result tomorrow is a bit of side issue in terms of earnings," Lindsay said. "The big issue will be timelines for separation and further communication on how they are going on the broadband rollout."

AMP, the wealth manager which bought Axa Asia Pacific's Australian and New Zealand assets earlier this year, led gainers on the exchange with the shares up 2.7% to $5.35.

The company's local unit reported a 32% decline in first-half earnings amid dwindling profit margins, with net profit coming in at $28 million in the six months ended June 30, down from $41 million a year earlier.

"The headline earnings were slightly above market expectations, but I think we've seen more of a relief rally today as the stock has been heavily sold down recently," Lindsay said.

Port of Tauranga Ltd., the port operator, rose 1.1% to $9.38 after it posted record annual earnings on growth in volumes of logs, containers, fertiliser and dairy products, giving it the confidence to claim the title of New Zealand’s biggest port ahead of Ports of Auckland.

Underlying net profit rose 17% to $57.9 million, the company said in a statement. Sales jumped 25% to $185 million. Net income, including a deferred tax adjustment, was $58.4 million.

Nuplex Industries Ltd., the industrial chemicals and resins manufacturer, rose 0.8% to $2.45 after it announced it will buy rival Acquos' Masterbatch unit.

A sale price wasn't disclosed, and Nuplex said it will make further announcements once the Australian Competition & Consumer Commission decides whether or not to let it proceed.

Turners Auctions Ltd., the vehicle auctioneer rose 5.1% to $1.45 after it lifted its first-half profit 12% despite sales falling 3% with the used car business remaining "challenging".

Net profit for the six months ended June 30 rose to $1.6 million while sales fell to $34.9 million due to a 9% reduction in sales of used Japanese imports by the Turners Fleet division. The company said $17.8 million of auction revenue was consistent with the same six months last year.

Pulse Utilities Ltd., the NZAX-listed low-budget electricity retailer, was unchanged at 15 cents after shareholders approved a rescue deal that will give control of the company to Buller Electricity Ltd. in exchange for capital to repay debt and expand.

Buller will inject $6.5 million to lift its stake to 73% from about 8.5%, though it may subsequently reduce to as low as 65% following a share purchase plan that aims to raise up to $1.5 million.

Pulse also gets access to a $1 million overdraft facility and can free up $2 million of cash by using new banking facilities to meet industry security requirements, Pulse said.

(BusinessDesk)

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