MARKET CLOSE: NZ shares fall as Fletcher result disappoints

MARKET CLOSE: NZ shares fall as Fletcher result disappoints, NZ Refining jumps

Feb. 22 (BusinessDesk) – New Zealand shares fell after Fletcher Building posted first-half earnings that missed its own guidance and cut its full-year forecast, saying it sees little improvement in home-building demand. NZ Refining surged a day after announcing plans to upgrade the Marsden Point refinery.

The NZX 50 Index fell 2.556 points, or 0.1 percent, to 3289. Within the index, 22 stocks fell, 15 rose and 13 were unchanged. Turnover was $127 million, making it one of the busiest days this year.

Fletcher, New Zealand’s biggest listed company, fell about 2 percent to $6.51 after posting a 13 percent decline in first-half profit, missing its guidance, on weak demand for home building and charges to restructure its Laminex unit.

Annual profit before one-time items would be $310 million to $340 million, below the $359 million level predicted in October.

"I am surprised it’s not down a little bit more but it normally takes the market a day or two to digest the numbers," said Mark Warminger, institutional fund manager at Milford Asset Management.

NZ Refining surged 12.5 percent to $3.25. The Marsden Point oil refinery is to undergo its third major upgrade in seven years, with the company’s board signing off a $425 million project yesterday, while posting a 40 percent drop in annual profit.

Trade Me, the auction website spun off from Australia’s Fairfax Media, fell 0.6 percent to $3.14. Earnings before interest and tax were $49.7 million in the six months ended Dec. 31, beating the $48.6 million forecast in the prospectus for its initial public offering last November. The company kept its full-year earnings guidance from the prospectus, at a profit of $65 million on revenue of $144.8 million.

New Zealand Oil & Gas rose 1.4 percent to 74 cents after announcing a return to first-half profit on reduced impairments from the failed Pike River Coal venture and improved revenue from the Kupe and Tui oil fields.

Net profit was $2.3 million in the six months ended Dec. 31, from a loss of $99 million a year earlier, when the company took Pike-related impairments of $98.6 million. Sales rose 35 percent to $54.6 million, just below the $55.5 million estimate from brokerage Forsyth Barr.

Air New Zealand fell 1.7 percent to 88 cents after its monthly operating metrics showed long-haul total passengers carried fell to 149,000 in January from 156,000 in the same month a year earlier, with a 5.5 percent decline passengers on the North America/UK route to 88,000 and a 2.7 percent fall in numbers on the Asia/Japan/UK route to 62,000.

PGG Wrightson, the agricultural technology and services company controlled by Singapore-based Agria, was unchanged at 39 cents after returning to profit in the first half on increases in earnings from livestock, retail and its AgriTech units.

Profit was $3.1 million in the six months ended Dec. 31, from a loss of $5.9 million a year earlier, the company said in a statement. Earnings beat brokerage First NZ Capital’s expectations of $1.8 million. Sales rose 12.5% to $693.8 million.

"The headline numbers look okay but underlying quality of the numbers was disappointing," Warminger said.

CDL Investments, the property company, was unchanged at 32 cents after announcing that annual net profit rose 30 percent, reflecting increased sales of sections in Hamilton and Canterbury.

CDL, which is 65 percent owned by Millennium & Copthorne Hotels New Zealand, said net profit rose to $3.8 million in the 12 months ended Dec. 31 from $2.9 million in 2010 while revenue rose to $11.7 million from $9.7 million.

(BusinessDesk)

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