Market close: NZ shares higher as earnings season warms up

Mercury shares fell 3.2 per cent to $6.33 today. Photo / Supplied

Energy company Mercury said it's on track for 15 straight years of dividend growth in its full-year result today as the earnings season starts to warm up and New Zealand's market ended the day in positive territory.

The S&P/NZX 50 index rose 58.1 points, or 0.49 per cent, to 11,847.15. Turnover on the main board was just $87.9 million – a pinch higher than yesterday's $81.1m.

Mercury said adding the NZ windfarms previously owned by Tilt Renewables to its asset base helped push to $581 operating earnings in the year to June 30, up from $463m in the previous financial year.

Chief executive Vince Hawksworth said the 12 months ended June 30 were "transformative" for the energy company and Smith The business also nicked the crown off Genesis Energy as the country's largest retail supplier of electricity.

Greg Smith, head of retail at Devon Funds, told BusinessDesk that Mercury had reported a satisfactory result and agreed with chief executive Vince Hawksworth that it had been a transformative year for the company.

He said even though the stock fell 3.2 per cent to $6.33 today, the shares were still up almost 5 per cent from a year earlier.

Other energy stocks were mixed across the index today – Meridian was up 0.6 per cent to $5.29, Manawa Energy lifted 0.3 per cent to $6.25 and Genesis Energy shares ended the day flat at $2.97. Infrastructure investment company Infratil also rose 0.7 per cent to $9.07.

Contact Energy's earnings kicked off earnings season yesterday and it was also the first energy company on the NZX to report its results – revealing its annual profit had dipped 2.6 per cent from a year previously. The company's stock was up 1 per cent to $7.90 today.

Rural services group PGG Wrightson announced its full-year earnings for the twelve months ended June 30 were up by 20 per cent – beating its thrice-upgraded guidance.

The company said operating earnings before interest, taxes, depreciation, and amortisation (Ebitda) were $67.2m in the 12 months ended June 30 versus $56m in the prior year. Operating Ebitda was above its guidance of $62m-to-$66m, which it raised three times on solid demand across all its lines of business.

PGG Wrightson shares were up flat at $4.44 per share at market close.

Cancer diagnostics company Pacific Edge had the biggest fall today, down 5.9 per cent to 48 cents. Fleet management company Eroad also fell 3.7 per cent to $1.81.

Ahead of its earnings announcement this Thursday, Auckland International Airport shares were down 1.3 per cent to $7.70. Sky Television Network ended the day up 4 per cent to $2.61 and healthcare distributor Ebos Group was up the top of the index by 3 per cent to $39.67 after dragging down the index yesterday.

The Reserve Bank of NZ (RBNZ) releases its monetary policy statement (MPS) tomorrow afternoon where it is widely expected to hike the official cash rate (OCR) by 50 basis points.

BNZ's head of research Stephen Toplis said in a markets outlook report yesterday that he anticipated the RBNZ to lift the OCR by 50 basis points and forecast 25bp hikes from both the October and November meetings.

"However, we judge the risks as being for more, not less, than this," he said. "If the RBNZ sends a clear signal on Wednesday that it will go 50bps again in October, we are entirely open to adjusting our OCR track accordingly."

Independent treasury adviser Peter Cavanaugh said the US dollar had strengthened after China's central bank made the sudden announcement that it was cutting lending rates by 10 basis points yesterday. The move from the central bank came after weaker-than-expected economic data was released out of China, which Cavanaugh said showed the Chinese government was more worried about growth than inflation.

Cavanaugh said China's low economic data saw crude oil prices lurch to below $90 – the lowest seen since February when Russia invaded Ukraine – and the US dollar strengthened in response.

The NZ dollar was sitting at 64.45 US cents on Monday and had fallen almost 1 US cent to 63.55 by 5pm today.

- BusinessDesk