Market close: Shaky NZ sharemarket ignores Z Energy's solid result

Z Energy rose 9c or 3.38 per cent to $2.75. Photo / File

Service station operator Z Energy got the latest local reporting season underway with a solid profit and price rise, but a shaky New Zealand sharemarket ignored that and fell more than half a per cent.

The S&P/NZX 50 Index was down 96.63 points or 0.75 per cent to 12,751.67. The index has fallen 3 per cent this year, while offshore markets have risen 7 per cent.

There were 53 gainers and 82 decliners over the whole market on steady volume of 57.85 million share transactions worth $188.51 million.

Mark Lister, head of private wealth research with Craigs Investment Partners, said the local market is having a difficult ride and continuing to lag overseas markets.

"There is nervousness about higher interest rates and inflationary pressures, and the Fonterra capital restructure could have been disruptive for the broader market," he said.

Overnight, US Treasury Secretary Janet Yellen clarified her interest rates comment, saying she's not predicting or recommending rate hikes and there isn't an inflationary problem. The Dow Jones Industrial Average rose to a new high, increasing 0.29 per cent to 34,230.34.

Z Energy rose 9c or 3.38 per cent to $2.75 after striking a 165 per cent increase in net profit to $57m for the 12 months ending March, turning around a loss of $88m in the previous year. Cost savings totalled $49m.

Revenue was down 29 per cent to $3.52 billion, with total marketing volume falling 22 per cent to 3.08 billion litres, mainly involving jet, bitumen and marine fuel. Z Energy is paying a final dividend of 14c a share on June 2, and its 2022 full-year operating earnings (ebitdaf) guidance is $270m-$310m, compared with $238m in the past year.

Lister said Z Energy has made reasonable progress but it still has a way to go. "Its share price has been so beaten up over a long period (since late March last year) and it doesn't take much for people to get excited about the latest result. But Z Energy's earnings still don't look shining year on year."

Z Energy's current share price is just above its low of $2.64 achieved on March 23 last year and way below the two-year high of $6.70 set on August 13, 2019.

The big cap stocks continue to drag the market down. Fisher and Paykel Healthcare was down 75c or 2.17 per cent to $33.80 on trade worth $28m, after reaching $36.46 last week.

Auckland International Airport fell 17.5c or 2.26 per cent to $7.57; a2 Milk slipped a further 26c or 3.26 per cent to $7.72; Chorus declined 11c to $6.65; Ebos Group was down 50c to $30.20; and Fletcher Building decreased 13c or 1.75 per cent to $7.28. Synlait Milk fell 8c or 2.3 per cent to $3.40.

Lister said a2 Milk was in the firing line with investors worried about another earnings downgrade and the possibility of it falling out of the MSCI global index. "That will cause a wave of selling by the exchange traded funds; we've seen it with Contact and Meridian and this has made people very sensitive."

The energy stocks again had mixed days. Meridian was down 6c to $5.46, Mercury declined 7c to $6.90; while Contact was up 7c to $7.72 and Genesis gained another 5c to $3.55.

The shining light was Mainfreight which burst through the $76 mark, rising $1.10 to $76.40. Lister said "Mainfreight really goes from strength to strength, it's been amazing. The company under-promises and over-delivers, and at the end of March it put on another 10 per cent in economic activity."

Other gainers were Ryman Healthcare, up 25c or 1.77 per cent to $14.35; Scott Technology gaining 5c or 1.96 to $2.60; NZME increasing 3c or 4.05 per cent to 77c; and Rakon also picking up 3c or 3.26 per cent to 95c.

Re-opening stocks were knocked around. SkyCity Entertainment fell 12c or 3.31 per cent to $3.50 after presenting in Australia the day before; Vista Group declined 4c to $2.46; and Serko was down 10c to $6.65. But Tourism Holdings rose 4c to $2.65.

Property for Industry has bought a 3.64ha industrial site in Wiri for $91.68m, and its share price edged ahead 2.5c to $2.88. The property has a modern 17,500 sq m warehouse, with 2,200 sq m of canopies and 12,250 sq m of yards. The property company expects to pay cash dividends of at least 7.9c a share for its 2021 financial year.