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%, 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 $581m operating earnings in the year to June 30, up from $463m in the previous financial year.
Chief executive Vince Hawksworth said the twelve 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% to $6.33 today, the shares were still up almost 5% from a year earlier.
Other energy stocks were mixed across the index today – Meridian was up 0.6% to $5.29, Manawa Energy lifted 0.3% to $6.25 and Genesis Energy shares ended the day flat at $2.97.
Infrastructure investment company Infratil also rose 0.7% 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% from a year previously.
The company’s stock was up 1% 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% – 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.
Chair Joo Hai Lee told the market this morning that the result was “exceptional” given the challenging backdrop that the company had navigated in the financial period.
This included covid-19 protocols, health-related staff absences and supply chain challenges – as well as resourcing the business in an extremely tight labour market.
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% to 48 cents. Fleet management company Eroad also fell 3.7% to $1.81.
Ahead of its earnings announcement this Thursday, Auckland International Airport shares were down 1.3% to $7.70.
Sky Television Network ended the day up 4% to $2.61 and healthcare distributor Ebos Group was up the top of the index by 3% 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 ten 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.
(This story was corrected with Mercury's name in the caption)