A fourth-quarter travel boom helped Auckland International Airport beat its own profit guidance with a net loss of just $11.6 million in the year ended June – but the market didn’t like the airport's vague and uncertain outlook for the year ahead and the stock dragged the New Zealand index down by the end of the day.
The S&P/NZX 50 index fell 38.5 points, or 0.33%, to 11,814.34. Turnover on the main board was $92.2m.
Auckland Airport reported a profit of $191.6m in the year ended June, driven by a $204m increase in the valuation of its property portfolio.
Shares in the company dropped almost 3% after the result as investors absorbed profit guidance for the 2023 financial year, which was lower than some had expected. By the end of the day, the shares were down 1.3% to $7.65, with over $16.4m traded.
Mark Lister, head of private wealth research at Craigs Investment Partners, said Auckland Airport’s numbers were a little ahead of what was expected, and the company had managed the business well through the period – but the company’s outlook had been “a little weak and a bit disappointing”.
He said it wasn’t surprising that chief executive Carrie Hurihanganui and chief financial officer Phil Neutze had been heavily grilled by analysts at the company’s results webcast about its outlook, capital expenditure plans and future car parking and retail income.
“There is a chance they’re just being a little bit conservative and they’d rather underpromise and surprise people than go and do something pretty bold but be able to deliver,” he said.
Auckland Airport might’ve been the most anticipated earnings to be revealed today but rubber manufacturer Skellerup provided the market with the most positive news.
The company breezed past its previous guidance and lifted annual net profit by 19% jumping to a record $47.8m, which chief executive David Mair attributed to the rubber manufacturer’s “unwavering focus” on its customers and products.
Lister said Skellerup’s results were the “pick of the bunch” of the earnings that came out today and it was good to see the company’s profits were ahead of expectations and had momentum to its margins.
Skellerup’s shares were up by 1.7% to $5.92.
Seeka shares were down by 6.4% to $4.09 today after NZ’s largest kiwifruit grower reported a 4.3% lift in net profit to $21.5m for the six months to June despite battling against covid-19, labour shortages and adverse weather.
The company told the market that it had “hunkered down, toughed it out” while focussing on optimising its operations and results in a volatile environment, while significant inflationary pressure and geopolitical events affected key markets.
Precinct Properties also reported its annual earnings today. The retail property group told the NZX that its lease income improved slightly to $126.1m during the 12 months to June 2022 – despite handing out $8.3m in rental support.
Precinct’s shares fell 1.7% to $1.42.
Market regulator NZX and energy company Genesis release their results tomorrow, winding up the first busy week of earnings season – with next week preparing to be full of even more results.
Lister said Genesis’ results would probably follow a similar pattern to Contact Energy and Mercury NZ who reported their results earlier in the week. Genesis’ shares fell 0.17% to $2.99.
What the NZX was going to reveal to its shareholders would be “quite interesting” as the company would’ve felt the brunt of the market volatility recently. The company’s shares were flat at $1.31 per share by early evening.
On the currency front, the NZ dollar was sitting at 62.73 US cents at 3pm today, down from 63.60 US cents yesterday.