“For a start, the bar is incredibly low,” Lister said.
“We have had a string of soft reporting seasons, so the market will be looking for something more upbeat,” he said.
“The second half of last year was, I suspect, one of maximum pain, which was the worst point, so I expect the numbers to look pretty terrible.
“I’m hopeful that the outlook commentaries will reflect the fact that interest rates are coming off thick and fast, and that the Kiwi dollar is at very low levels against the US dollar.
“The weak Kiwi is giving exporters more optimism for the future, so I’m still upbeat about how things look for the year ahead.”
Investment and advisory group Jarden said economic conditions over the half year had been difficult and were likely to remain that way over the balance of this calendar year.
“Additionally, we now have the uncertainty of President [Donald] Trump with tariffs threats and a look after America first agenda,” Jarden said.
But Jarden was optimistic that the easing cycle would continue, providing some relief as companies go into the second half of 2025.
“This macro backdrop is likely to be most magnified in cyclicals exposures to Fletcher Building, Vulcan Steel, and Tourism Holdings,” Jarden said.
The big power companies looked likely to report a mixed bag of results, reflecting last winter’s abnormally dry and windless conditions, coupled with a gas shortage, followed by strong inflows and price declines.
Futures markets retracted but spot prices are rising, particularly for June 2025, signaling concerns about winter supply.
“Most companies navigated volatility without major outlook revisions, except Meridian,” Jarden said.
The focus now would be on how the “gentailers” manage this coming winter.
Jarden has estimated Contact’s (result due February 17) earnings before interest, tax, depreciation and amortisation (ebitda) at $406m, up $73m year on year (yoy), driven by new geothermal and improved retail pricing.
Genesis Energy’s (February 21) half-year ebitda is estimated at $246mn, a 22% increase.
For Mercury (February 25), Jarden says the half-year ebitda was expected to be flat yoy at $434m, despite the drought impact.
Meridian’s half-year profit (February 26) is estimated to be $257m, a significant decrease of $189m, driven by drought and low wholesale prices.
“We reduce our full-year 2025 ebitda estimate to $843m from $881m.”
Fletcher Building (February 19) remained in a downcycle and was still managing the tail of its legacy issues, Jarden said.
For Australasian medical goods distributor EBOs, the focus would be on calibrating the Chemist Warehouse Australian contract loss.
Jarden expects EBOs (February 19) to issue an unchanged full year guidance and said there was potential for the board to lift dividend payout as a sign of continuing confidence.
Among the smaller issues, stock exchange operator NZX (February 21) had seen its earnings rebound strongly with improved capital markets.
Brokers Forsyth Barr said this earnings season will see lapping of the weakest earnings season on record.
“Yet we are forecasting a record seventh consecutive earnings season, with meaningful average and median year-on-year earnings per share declines,” it said.
“From bad to worse describes the backdrop for the New Zealand economy during the March to September 2024 period quite well.
“However, that is all well understood and in the past.
“Luckily, the market has a short memory.”
Forsyth Barr said that on top of lower interest rates, business confidence was running high, and that the Government had proposed fast-track legislation for big construction projects.
“As unintuitive as it may seem, we approach this earnings season with one of our largest positive bias since we introduced our positive/negative biases,” the broker said.
“But we also approach it with a heightened degree of nervousness.”
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
