NZ Sharemarket Subdued After Air NZ Loss Announcement

National airline Air New Zealand is facing one of its biggest losses, and seafood exporter Sanford achieved a record profit as the local sharemarket remained subdued yesterday. The S&P/NZX 50 Index had a choppy session and closed at 13,025.07, down 37.99 points or 0.29%. There were 68 gainers and 71 decliners on turnover of 35.6 million shares worth $146.6m.

Air NZ Air NZ declined 2.5c or 5.81% to 40.5c after telling the market it is expecting a full-year pre-tax loss of $340m-$390m because of the rapid rise in the price of jet fuel, which has gone from US$85 (NZ$143.24) to US$90 a barrel to US$160-$230 over the last 10 weeks. The airline’s biggest loss was $454m after-tax in the 2020 financial year when the covid pandemic severely affected operations. It posted a profit of $189m last year. Air NZ told the market that the scale and speed of recent movements in jet fuel prices and refining margins have created a material external shock for the global aviation sector. It has available liquidity of $1.3 billion, including an existing undrawn $250m syndicated standby facility, and has reduced its capacity on flight networks by 3-5%. The airline expects its fuel cost to be about $980m in the second half of the 2026 financial year, up from an earlier estimate of $740m. Estimated fuel consumption for May and June is about 1.4m barrels, taking total second-half consumption to 4.1m.

The latest NZ Real Institute data has shown a softening in the housing market. The REINZ House Price Index was down 0.4% in April, and sales volumes declined 6.6% to below the historical average.

Retirement village operators were weaker because they depend on people selling their homes and moving into their units. Summerset declined 16c, or 2.12%, to $7.40 (it has fallen nearly 37% over the past year); Ryman Healthcare was down 6c, or 2.73%, to $2.14; and Oceania Healthcare shed 21.5c, or 3.6%, to 67c. Promisia Healthcare increased 2.5c or 5.21% to 50.5c, and developer Winton Land fell 12c or 6.98% to $1.60.

Sanford was unchanged at $8.15 after reporting a 24.6% rise in net profit to $42.4m for the six months ending March, even though revenue was down 5.5% to $270.15m. Operating earnings (ebit) increased 17.6% to a record $64m, and Sanford is paying an interim dividend of 5c a share on May 28. The biggest contributor was wildcatch with revenue of $153.7m, up 7%, and profit of $31.7m, up 32%. Sanford said improved performance from salmon and wildcatch was partly offset by reduced profitability in our mussel business. There has been a continued reduction in overhead-related costs - an ongoing focus for the business.

Ebos Group was down 22c to $20.75; a2 Mill fell a further 29c or 3.73% to $7.48; and Mainfreight shed $1.30 or 2.26% to a one-year low of $56.20. Turners Automotive decreased 20c or 2.25% to $8.70; Kiwi Property declined 3c or 3.17% to 91.5c; and Heartland Group was down 5c or 4.46% to $1.07.

Mercury Energy, easing 7c to $7.03, is spending $75m on geothermal appraisal drilling at two existing sites, Nga Tamariki and Rotokawa, near Taupo.  The two projects could attract investment of $1b and add one terawatt-hour of new generation from 2030, equivalent to powering 125,000 homes. Meridian was up 9c to $5.91; Auckland International Airport added 11c to $8.39; and port companies Tauranga and Napier gained 11c to a new high of $8.42, and 9c or 2.51% to $3.68, respectively.

Vista Group decreased 5c, or 2.36%, to $2.07 after announcing that existing client Regal Cineworld is changing its 88 sites (more than 950 screens) in the UK to the Cloud Digital system. Synlait Milk, down 1c or 2.04% to 48c, told the market that its chief executive, Richard Wyeth, has resigned after one year in the job. He has been replaced by Leon Fung in an interim role. Fung was chief executive of NIG Nutritionals and operations director for Danone Oceania. On the ASX at 6pm NZ time, software accounting firm Xero had declined 7.77% to A$74.70 (NZ$91.37) after reporting a 27% fall in full-year net profit to A$167.4m, and 31% increase in revenue to $2.8b through two rounds of price increases.

Source: Business Desk

Ahead of the local open SPI futures were 76 points higher at 8723.

- close [Morningstar with AAP]: Australia's share market has broken a four-session losing streak, albeit unconvincingly, after a rebound in banks and continued strength in major miners tipped the bourse into positive territory.

The S&P/ASX200 rose 10.3 points on Thursday, up 0.12 per cent to 8,640.7, as the broader All Ordinaries edged four points higher, or 0.05 per cent, to 8,884.7.

The exchange has lost ground on 16 of the past 21 trading days, with the Persian Gulf energy shock, higher local interest rates and a series of disappointing earnings results from major Australian companies weighing on investor sentiment.

"We just got a pretty lifeless day, to be honest," Pepperstone head of research Chris Weston told AAP.

"We're waiting for something to happen, and we've got a market that is really unsure about more interest rates."

After three Reserve Bank interest rate hikes in 2026 nullified the previous year's cuts, markets are leaning towards another increase by August.

"The debate is one or two (more) rate hikes this year," Mr Weston said.

"And if we don't get any more hikes at all, it's because the RBA are more concerned about a slowdown in consumption, and that's hardly good for earnings either."

A rebound in CommBank shares (after Wednesday's post-earnings wipeout of almost $30 billion) helped lift the financials sector, while ANZ and Westpac also improved.

Investment giant Macquarie Group has bucked the disappointing trend for banks this reporting period, gaining more than 15 per cent since its full-year $4.8 billion profit - up 30 per cent on the year before - blew away expectations at the start of April.

Continued strength in mega miners BHP, Rio Tinto and Fortescue - on the back of base metal strength and renewed confidence in China's outlook - helped cap losses in the basic materials sector.

After the close, Rio Tinto announced BP deputy general counsel Trudi Charles as its new chief legal officer

Gold miners lost some of their shine as the precious metal dipped below $US4,695 ($A6,466) an ounce, while battery minerals producers and rare earths miners also slipped.

Supermarket giant Coles weighed on the consumer staples sector, dropping 2.2 per cent after the Federal Court found its "Down Down" discount campaign had misled consumers in all but one sample product.

The consumer watchdog's blockbuster joint action against the two big supermarket companies will wrap when the court rules on Woolworths' "Prices Down" campaign at a later date.

IT stocks also had a rough day, tumbling as accounting software provider Xero's value crumbled by nine per cent after its US expansion weighed on its profit result, while WiseTech, Technology One and Life360 also dragged.??

The beaten-down health care sector continued to sell off, recording its lowest close since September 2017 in a broad segment sell-off.

In company news, bourse operator ASX improved by 2.1 per cent after naming Euronext executive Anthony Attia as its next chief executive and managing director, to replace Helen Lofthouse later in the year.

The Australian dollar is buying 72.61 US cents, up from 72.36 US cents on Wednesday at 5pm.

ON THE ASX:

The S&P/ASX200 rose 10.3 points, or 0.12 per cent, to 8,640.7

The broader All Ordinaries gained four points, or 0.05 per cent, to 8,884.7

The NZX 50 Lost -28.25 points (-0.22%) to 12996.82

Companies commencing Ex-Dividend Trading Today (ASX 300):

Dicker Data Limited

[Morningstar with Dow Jones]:

U.S. stocks ended higher. The DJIA climbed 0.7% to 50,063.46, the S&P 500 lifted 0.8% to 7,501.24 and the Nasdaq climbed 0.9% to 26,635.22.

Among S&P 500 companies, the top three gainers were Cisco Systems Inc CSCO surging 13.43%, JB Hunt Transport Services Inc JBHT jumped 7.05%, and AppLovin Corp APP lifted 7.04%.

The biggest decliners were Biogen Inc BIIB which dropped 6.43%, Qualcomm Inc QCOM fell 6.14%, and CBRE Group Inc CBRE lost 5.83%.

Asia

Chinese shares closed lower. The benchmark Shanghai Composite Index fell 1.5% to 4,177.92 and the Shenzhen Composite Index declined 2.1% to 2,886.99.

Hong Kong shares ended flat. The benchmark Hang Seng Index was unchanged at 26,389.04.

Japanese shares ended lower. The Nikkei Stock Average dropped 1% to 62,654.05.

India shares ended higher. The BSE SENSEX added 1.1% to 75,398.72.

Europe

Stocks in the U.K. finished higher. The FTSE 100 Index gained 0.5% to 10,372.93. In Europe, shares closed mixed. The Germany's DAX rose 1.3% to 24,456.26, and the France's CAC 40 was unchanged at 8,082.27