Market close: Sombre results and profit taking drag NZ shares lower

Air New Zealand reported a loss of $440 million and its share price fell 3.5c or 2.28 per cent to $1.50. Photo / Brett Phibbs

The New Zealand sharemarket lost momentum as a flurry of company results produced more sombre than positive reading and investors started taking profits.

The S&P/NZX 50 Index was down 121.86 points or 0.93 per cent to 13,051.62, after reaching an intraday high of 13,204.61.

There were 66 gainers and 72 decliners over the market, with strong volume of 63.7 million shares worth $302.51 million changing hands.

It was the biggest day for latest results – 10 companies reported – and a2 Milk and Air New Zealand just happened to be among them. As expected, they took big hits, with a2 Milk falling 81c or 11.33 per cent to $6.34 on trade worth $30m; and Air New Zealand was down 3.5c or 2.28 per cent to $1.50. Synlait, majority owned by a2 Milk, fell 21c or 6.02 per cent to $3.28.

The a2 Milk Company's net profit plunged 79.2 per cent to $80.65m on revenue of $1.2 billion, down 30.3 per cent, for the year ending June as its important Chinese market shrinks and becomes more competitive. The company said a growth strategy review is under way to respond to the rapidly changing China market dynamics.

Operating earnings (ebitda) fell 77.6 per cent to $123m and this included $109m worth of stock writedowns. Sales in China and other Asia nations was down 16.6 per cent to $583.4m but the Australian fresh milk revenue increased 10.8 per cent to $169m and a2 has a record market share of 12.2 per cent.

Air New Zealand had a loss of $440m before other significant items and tax, which included a $29m gain and the sale of Heathrow landing spots. The airline's net loss was $289m compared with $454m in the previous year, and it was unable to fly two-thirds of its passenger network.

Air NZ's revenue fell 48 per cent to $2.51b but it was helped by the air freight support scheme and cargo revenue increased 71 per cent. The airline had liquidity of $1.3b at August 24, comprising $183m cash and $1.15b of undrawn funds on the government standby loan facility.

The best result was produced by manuka honey supplier Comvita on a turnaround in profit and resumption of dividend. Comvita rose 15c or 4.39 per cent to $3.57 – hitting an intraday high of $3.70- after turning a 2020 loss of $9.7m into a 2021 net profit of $9.47m on steady revenue of $191.73m.

Comvita has just completed a 18-month transformation programme, and is paying a final dividend of 4c a share on October 7. Its sales in the biggest market of China increased 7 per cent to $93.1m. But Australia and New Zealand sales were down 27 per cent to $32.4m.

Genesis Energy reported a 24.3 per cent increase in revenue to $3.22b for the year ending June, but its net profit fell 27.2 per cent to $33.5m after paying a total of $60m for carbon credits and a carbon liability after an arbitration ruling.

Genesis is paying a final dividend of 8.8c a share on October 8, and its share price declined 1.5c to $3.38. Its operating earnings (ebitdaf) guidance for the 2022 financial year is $420m-$440m compared with the actual $357.9m last year.

Fisher and Paykel Healthcare shed 48c to $31.98; Mainfreight was down $1.39 to $91.91; and Freightways declined 21c to $12.69 – all on profit-taking.

Port of Tauranga fell 20c or 2.72 per cent to $7.15 the day before announcing its latest result. Mercury was down 12c or 2.02 per cent to $6.80 and fellow energy company Vector was up 8c or 1.91 per cent to $4.26.

Ryman Healthcare decreased 12c to $15.13 but fellow retirement village operators Summerset Group Holdings increased 20c to $15.20, and Oceania Healthcare gained 4c or 2.74 per cent to $1.50.

Ebos Group breached the $35 mark for the first time on heavy volume, rising 20c to $35.01on trade worth $63.7m. Serko went over the $8 mark, gaining 7c to $8.02.

The Warehouse Group increased 9c or 2.43 per cent to $3.79 after telling the market it is a corner shareholder in health technology company ZOOM Health. Other retailers Briscoe Group gained 8c to $6.50, and Hallenstein Glasson was up 13c or 1.86 per cent to $7.12.

Wine exporter Delegat Group rose 49c or 3.6 per cent to $14.10 on the eve of reporting its latest result; Harmoney climbed 14c or 7.14 per cent to $2.10; Z Energy was up 7c or 2.03 per cent to $3.52; Sky Network Television increased 0.005c or 3.16 per cent to 16.3c; and DGL Group gained 16c or 6.75 per cent to $2.53.

Move Logistics' strong run came to an end when it lost 13c or 7.22 per cent to $1.67 after its net profit for the year ending June fell 55 per cent to $900,000. Revenue was up 5.8 per cent to $353.4m, and operating earnings increased 6.6 per cent to $61.3m.

Tourism Holdings report for the year ending June was short and sweet. The company told the market: "We are not pleased with the net loss after tax of $14.5m (on revenue of $359.17, down 10 per cent), but do consider that we have managed it well within the context of global tourism." Its share price gained 2c to $2.33.

NZX, which announced a refreshed senior management team, declined 4c to or 2.11 per cent to $1.86 after its net profit fell 16 per cent to $7.63m on revenue of $42.45m, up 10.6 per cent, for the six months ending June. It is paying an interim dividend of 3c a share on September 24. The total value traded on the NZX market was $27.1b, just 2.8 per cent below last year's Covid record.