by BusinessDesk
The S&P/NZX 50 index was flat today at 12,074.47. Turnover was $125.2 million.
Vulcan told the market the decline in profitability of its businesses – excluding aluminium – reflected a 15% drop in sales volumes, increased cost pressures and high financing charges.
The steel and metal distributor now expects earnings before interest, tax, depreciation and amortisation (Ebitda) to range between $215m and $230m – previously the top of the range was $235m – and net profit to be between $95m and $109m, up from $93m to $107m previously.
Devon Funds head of retail Greg Smith said Vulcan’s earnings were a “pretty poor result”.
“They narrowed their guidance – which on the face of it is probably quite encouraging – but if you strip out their Ullrich Aluminum acquisition, it was actually quite a downgrade,” he told BusinessDesk.
Vulcan Steel plunged 10.6% to $8.55 by end of trading today.
It’s a similar reaction to Fletcher Building’s results yesterday, with its stock falling more than 5% after the early release of its half-year earnings disappointed the market.
The bad weather in January and February forced the construction services company to downgrade full-year guidance to be between $800m and $855m. Its previous guidance was $855m. Fletcher was down 1.6% to $5.05 today.
On the more positive side of things, retailer KMD Brands jumped 1.9% to $1.09 – previously up almost 5% this morning – after announcing that its first-half results were benefitting from the return to travel and international tourism.
Group total sales for the six months ended Jan 31 are expected to come in at $546 million, up 34% from the company’s first financial half last year.
Smith said the news was “really positive” and also showed that the retail sector was finally finding some relief after the last few years of covid havoc.
By 3:30pm this afternoon, Auckland-based electricity lines company Vector said 42,000 of its customers were still without power – up from 38,000 this morning.
“We continue to see the same pattern we have been seeing since the cyclone began, whereby we are fixing faults, only for new outages to occur,” the company said in a statement.
“We expect the number of people without power to continue to fluctuate for some time yet due to the ongoing weather and ground conditions.” The stock edged down 0.2% to $4.32 by early evening.
Casino operator SkyCity is reporting its six month results tomorrow. Smith said while on one hand the casino business would be benefiting from the reopening of borders and the return of tourists and cruise ships, the legal probe into its Adelaide operations was “probably hanging over them”.
The stock was down 3.2% to $2.45.
As ex-tropical Cyclone Gabrielle wreaks havoc across the nation, it also put a damper on Scales Corp’s share price today – which fell 4.7% to $3.58 – as the agribusiness will be working out how much the cyclone has affected its harvests. It will also be hit by Hawke's Bay and Gisborne losing power after a major substation was flooded, severely reducing power to the region and affecting some of Scales' operations. Pan Pac also stopped operating due to a loss of power.
Statistics NZ revealed today that annual food-price inflation had fallen in January for the first time since April 2022.
However, it found prices were still 10.3% higher on an annual basis, but still below the 30-year record increase of 11.3% recorded in December.
The NZ dollar was trading at 63.64 US cents at 3pm in Wellington today, up from 63.06 US cents at the same time yesterday.
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