Fonterra stands out as New Zealand stocks fall – Market close

The S&P/NZX 50 Index fell 79.46 points or 0.65%.

Giant dairy co-operative Fonterra gave the New Zealand sharemarket, and the economy, some heart with a strong annual financial result that included an increased dividend.

The S&P/NZX 50 Index settled at 12,224.53, down 79.46 points or 0.65%, after reaching an intraday high of 12,356.31.

There was again strong trading with 57.78 million shares worth $183.52 million changing hands.

Fonterra Shareholders’ Fund was one of the leading gainers, rising 19c or 4.19% to $4.72 after the dairy co-operative reported revenue of $22.82 billion, down 7%, and net profit of $1.168b for the year ending July.

Fonterra, the country’s biggest company, is paying a special dividend of 15c a share on top of the final dividend of 40c on October 11, and the total 55c payout for the year is the second biggest in its history. It has exhausted its tax losses and will now be paying tax.

Fonterra has increased its 2024/25 farmgate milk price forecast to $9 per kgMS (kilo of milk solids), after paying out $7.83 per kgMS for the previous year, because of strengthening Global Dairy Trade prices.

Mark Lister, investment director with Craigs Investment Partners, said Fonterra’s earnings guidance (40-60c a share) looks strong and that’s positive for NZ Inc as well as the farming sector.

He said the $9 per kgMS milk price would be the second highest in Fonterra’s history after paying out $9.30 in 2021-22.

Fonterra’s performance and improved dairy prices have played a big part in the strengthening of the NZ dollar to US63.33c against the American greenback – an 8% rise since late July, Lister said.

“This weighs on exporters like Fisher and Paykel Healthcare but it’s good news for the Reserve Bank as a stronger dollar has higher buying power and imports will be cheaper.”

Fisher and Paykel Healthcare was down 56c to $34.85. Amongst other leading stocks, Infratil shed 30c or 2.45% to $11.95; Auckland International Airport declined 11.5c to $7.195; Spark eased 7c or 2.24% to $3.06; ANZ Bank decreased 80c or 2.35% to $33.20; and Gentrack was down 26c or 2.24% to $11.35.

Summerset Group gained 11c to $11.36; Freightways collected 22c or 2.53% to $8.93; and Mercury was up 19c or 3.19% to $6.14.

Port companies Tauranga and Napier were up 22c or 3.91% to $5.84 and 4c or 1.79% to $2.27 respectively, while Marsden Maritime Holdings was down 9c or 2.65% to $3.30.

Global marketer a2 Milk was up 5c to $5.90 on the back of Chinese stimulus to boost their economy and the struggling property market. The People’s Bank of China cut the amount of cash banks need to have on hand, and intimated a 0.2-0.25% reduction in the prime loan rate could follow.

KMD Brands was down 0.005c to 49.5c after reporting an 11.2% decline in revenue to $979.41m and net loss of $48.32m for the 12 months ending July. The loss included a $40.3m impairment for Oboz goodwill.

“In a challenging sales environment” Rip Curl’s revenue was down 7.3% to $538.9m, Kathmandu’s declined 14.5% to $361.1m, and Oboz’s fell 20% to $79.4m. Operating expenses were down $19.6m and gross margin was steady at 58.9%.

For the eight weeks to September 22, KMD said Kathmandu Australia’s direct sales were up 2.1% and New Zealand down 23.2%. But gross profit was up 5.1%. Wholesale forward orders were moderating from double-digit declines in the 2024 financial year to single-digit falls for the first half of 2025.

Other retailers Hallenstein Glasson was up 15c or 2.48% to $6.20; Briscoe gained 6c to $4.86; and Michael Hill was down 2c or 3.57% to 54c. The Warehouse declined 3c or 2.38% to $1.38 on the eve of reporting its latest annual result.

Tower increased 4c or 3.25% to $1.27; Scales Corp was up 9c or 2.56% to $3.60; and Ventia Services shed 18c or 3.43% to $5.07.

Santana Minerals, up 8.5c or 3.41% to $2.58, is planning to increase its ordinary shares on issue from 206.5 million to 619.57 million in a three-for-one share split to increase liquidity for all investors.

Santana also has a commitment from institutional investors to raise $31.2m through a placement of a further 27.14 million new shares at $1.15 each. The money will be used to advance the Bendigo Ophir gold project in Central Otago. A shareholders meeting will be held on October 24.

Vista Group increased 10c or 3.79% to $2.74; Serko was up 12c or 4% to $3.12; and Pacific Edge declined a further 1.4c or 9.4% to 13.5c.

Shareholders have approved the takeover of Arvida Group, up 1c to $1.67, by New York-based investment firm Stonepeak at $1.70 a share. Shareholders will be paid on about November 13.