24 Feb 2016

Company earnings a mixed bag

5:17 pm on 24 February 2016

A deluge of company earnings reports has seen a mixed bag of results, with pressures in the competitive power sector denting profits, but an ageing population has delivered solid increases for rest home and retirement village operators.


Photo: NZX / Supplied

Part-privatised energy companies Meridian and Genesis reported lower bottom line profits, affected by the changes in values of hedging contracts which are like insurance to cover volatile prices and supplies.

But underlying profitability for both companies was flat or fractionally firmer, and both commented on tough competition in the retail markets.

Meridian's first half net profit for the six months ended December, down 11 percent on a year ago to $104 million. The underlying profit was $122 million from $115 million, with revenue marginally higher.

The chief executive Mark Binns said the result was "solid", and the company's strong cash flow would allow it to pay a special dividend of 2.4 cents a share.

Genesis Energy first half profit down 47 percent on last year to $35.9 million. Underlying profit was fractionally higher at $175.5 million, but it said it expected its full year result to be similar to last year.

It said it was still looking to close two coal-fired generators at its Huntly station, but is open to a deal with other power companies, who fear shutting the units in 2018 might cause power shortages.

By contrast, two of the bigger players in the retirement sector - Summerset and Metlifecare - have seen their bottom lines boosted by strong property gains, and their underlying profits rising on strong sales of units.

Metlifecare first half bottom line profit more than tripled to $125.7 million, but excluding property revaluations the underlying result was a more modest 29 percent to $33.5 million.

It said growth has been particularly strong in Auckland and the Bay of Plenty. It has forecast a full year underlying profit between $62-$64 million from last year's $52.4 million.

Smaller operator Summerset's profit for the 12 months ended December was $84.2 million, up 56 percent on a year ago.

Excluding property gains the underlying profit was $37.8 million compared with $24.4 million. It was ramping up development, planning to build 400 new units in the coming year from 300 last year.

The other notable results today have been the high flying healthcare and animal products company Ebos, and Refining New Zealand, which has benefited from the slump in world oil prices.

Ebos supplies healthcare, pharmaceutical, and pet products on both sides of the Tasman.

The company's net profit for the six months ended December was $64 million, up 19 percent on a year earlier, with sales rising eight percent to $3.4 billion dollars. It raised its interim dividend to 26 cents a share from last year's 22 cents, and is forecasting double digit growth in the full year profit.

Refining New Zealand reported a net profit of $151 million for the year ended December compared with a $10 million profit the year before.

The result benefited from tumbling oil prices, rising demand and a near doubling in refining margins.

Agri-services business PGG Wrightson first half profit, down 18 percent at $16.1 million as weak commodity prices and the worries about drought saw farmers pull back their spending.

Stock exchange operator NZX full year profit rose 82 percent increase to $24 million, as it gained from its funds management business and sales of new investment products.

Owner of the Mad Butcher chain Veritas Investments has made a $4.8 million first half loss driven by losses and write offs from three underperforming bars in Hamilton.

Training company, Intueri Education Group, has reported a full year loss of $48.5 million compared with last year's $5 million profit, because of a near $60 million write-off in he value of several of its training schools.