Fonterra earnings expected to be strong

Fonterra's result for 2011-12, due on Wednesday, is expected to show the co-operative enjoyed another strong year of earnings, despite lower dairy prices.

Economists expect increased production, thanks to favourable growing conditions, to partially offset weaker product prices for Fonterra.

Farmers will be also looking for confirmation of the 2011-12 farmgate milk price after Fonterra cut the forecast payout by 30c to $6.05 per kg of milksolids in May.

The co-operative delivered a strong performance in the first half, reporting a net profit after tax of $346 million, up 18 per cent on the previous corresponding period.

Fonterra also showed confidence in its earnings by declaring a 12c per share dividend, up from 8c in the previous corresponding period.

At the interim result's release in March, Fonterra noted good spring and early summer growing conditions across most of the country had led to strong growth in New Zealand dairy production and record volumes.

Fonterra's annual result will compare with last year's record net profit of $771m, which was a 13 per cent improvement on the previous year's.

• The rag trade looks set to dominate the business news agenda for the NZX-listed stocks, when clothing retailers Hallenstein Glasson and Pumpkin Patch report their annual results.

Hallenstein Glasson's result on Wednesday is expected to be a strong one, despite a difficult retail environment.

The company said last month that its net profit for the year to August 1 was likely to be in a range of $20.4m to $20.8m, up from $18.3m last year.

Underlying earnings from trading were forecast to be up by about 20 per cent on the earlier year, Hallenstein said.

Hallenstein's shares have performed strongly over the year, hitting a 12-month high of $4.65 earlier this month.

They last traded at $4.50, up from $3.11 this time last year.

Pumpkin Patch in August announced its underlying net profit for the year to July 31 was expected to around $10.1m, compared with $12.6m in the previous year.

The adjusted profit will take into account extensive writedowns arising from the closure of offshore operations.

"It will clearly be a tough operating environment for them but it won't be as bad as some of the worst-case estimates out there," said one analyst.

He expected the market's attention to focus on Pumpkin Patch's ability to grow the business.

Pumpkin Patch's bottom line loss came to $1.9m in 2010-11.

• Air New Zealand, which is 73.13 per cent owned by the Government, will hold its annual meeting on Friday and it will be the last one for outgoing chief executive, Rob Fyfe, who leaves at the end of the year.

There will be plenty of interest in the meeting after the company reported a decline in annual earnings but forecast a strong improvement in financial performance in the coming year.

The Government has signalled its intention to sell down its holding but is understood to not be in any hurry.

This week, Allan Gray Australia Pty - formerly Orbis Investment Management (Australia) Pty - said it had a holding of just under 5 per cent of Air NZ, making it the second biggest shareholder in Air NZ after the Government.

Allay Gray also has a 17.46 per cent stake in takeover target Fisher and Paykel Appliances, and has entered a "lockup" deal to sell its holding in F&P to Haier, giving the Qingdao-based company a 37.46 per cent interest in the Kiwi firm.

• Friday will also see Telecom hold its first annual meeting without its network arm - Chorus - which separated from the group last year.

A handful of data releases covering the month of August are also due - visitor arrivals (Tuesday), merchandise trade (Wednesday), and building consents (Friday). A specially created post-earthquake statistic, the Christchurch retail trade indicator for June quarter is also due on Friday.

 

Add a Comment