Comvita share price plunges to 12-year low after earnings downgrade - Market close

Comvita was down 31c or 14.09 per cent to $1.89. Photo / NZME

Manuka honey producer Comvita plunged to a 12-year low on the New Zealand sharemarket with an earnings downgrade and SkyCity Entertainment was on the rise after achieving a regulatory settlement.

The S&P/NZX 50 Index again went opposite to Wall Street and gained a healthy 44.68 points or 0.38 per cent to 11,916.78 after a strong afternoon trading session.

There were 52 gainers and 78 decliners on the main board with 25.21 million shares worth $94.91 million changing hands.

The US markets were disappointed when Federal Reserve chairman Jerome Powell said March was not the most likely case for the first rate cut, though the Fed kept the benchmark funds target between 5.25 per cent and 5.5 per cent, a 23-year high.

The Dow Jones Industrial Average was down 0.82 per cent to 38,150.3 points; S&P 500 declined 1.61 per cent to 4845.65; and Nasdaq Composite fell 2.23 per cent to 15,164.01.

There was further anxiety when New York Community Bancorp (NYCB), which funds commercial real estate, announced an unexpected quarterly loss and its share price fell 37.67 per cent to US$6.47 ($10.54).

Shane Solly, portfolio manager with Harbour Asset Management, said the big earnings miss dragged the financial sector down and there’s talk of cutting NYCB’s debt rating to junk.

Across the Tasman, the S&P/ASX 200 Index was giving up the record gains of the day before, having fallen 1.23 per cent to 7586.1 points at 6pm NZ time.

At home, Comvita was down 31c or 14.09 per cent to $1.89 – its lowest share price since early September 2011. Comvita’s low point was 82c on May 1, 2009, with a peak of $12.55 on the same date in 2016.

Comvita told the market that operating earnings (ebitda) are expected to fall 32 per cent to $9.5m for the first half compared with the previous corresponding period.

First-half revenue was down 8.1 per cent to $103m because of reduced consumer demand, particularly in China, and the loss of a customer in North America. China revenue declined 19 per cent to $33m, and North America fell 37 per cent to $13m.

Comvita is now forecasting full-year revenue at $225m-$235m (previously $245m-$255m), and ebita $30m-$35m ($33m-$38m).

Solly said the earnings downgrade was really disappointing. “Comvita had been talking up a recovery and was adamant it was on the right path. Hopefully, this is just a timing issue – Chinese consumers are being wary – but the market will remain sceptical until it sees a turnaround in fortune.”

SkyCity increased 12c or 6.35 per cent to $2.01 after telling the market it has an agreement with Australian Transaction Reports and Analysis Centre (Austrac) concerning the anti-money laundering breaches by its Adelaide Casino. A court hearing on civil penalty will take place on June 7.

SkyCity has revised its penalty provision to A$73m ($79m), from A$45m, and the casino operator emphasised that the final amount is not yet certain - the level of any penalty is a matter for the discretion of the court.

Fisher & Paykel Healthcare was up 28c to $23.95; Ventia Services increased 6c to a new high of $3.52; NZME rose 4c or 4.12 per cent to $1.01; Cooks Coffee improved 1.5c or 7.32 per cent to 22c; and Seeka gained 5c or 1.89 per cent to $2.70.

Global marketer a2 Milk charged on, adding 12c or 2.33 per cent to $5.27 – after sitting at $4.46 two weeks ago. Synlait Milk improved 5c or 6.25 per cent to 85c.

Steel & Tube Holdings gained 4c or 3.51 per cent to $1.18 after telling the market it is performing well in the current soft economic conditions and half-year earnings will be at the top end of guidance. Operating earnings (ebit) is expected to be slightly above $11m, and it has no bank debt.

Auckland International Airport, up 10.5c to $8.54, is joining NZ Airports Association in appealing the Commerce Commission’s final input methodologies determination, arguing that airports need “a well-tested foundation to fund long-run investment”.

Freightways was down 18c or 2.13 per cent to $8.28; Vista Group declined 3c or 1.84 per cent to $1.60; T&G Global fell 7c or 3.66 per cent to $1.84; and Burger Fuel decreased 1.5c or 4.92 per cent to 29c.

In the retail sector, Briscoe was up 7c to $4.52; Hallenstein Glasson declined 8c to $5.43; and KMD Brands was down 2c or 2.86 per cent to 68c.

Gentrack, up 2c to $6.60, has invested A$12m in Australian retailer Amber, which provides customers direct access to real-time energy prices and technology to automate home batteries. Both companies will further develop the technology and sell internationally.

Michael Hill International was unchanged at 89c. In Australia, the Supreme Court of New South Wales ordered Michael Hill Jeweller (Australia) to pay Gispac damages of more than $2.2m, plus interest and costs, in a judgment that involved a dispute relating to the supply of packaging in the years 2014 to 2018.

Michael Hill is considering the judgment and its appeal options.