Stocks to watch: Auckland Airport, Mainfreight post earnings

Thursday 19th February 2009

The following stocks may be active on the New Zealand exchange after developments since the close of trading yesterday.

Themes of the day: The New Zealand dollar held below 51 US cents for a second day as sentiment for the US dollar boomed on President Barack Obama's injection into Fannie Mae and Freddie Mac to curb foreclosures. Stocks edged lower on Wall Street with the Dow Jones Industrial Average falling 0.2%.

Auckland International Airport (AIA): First-half profit fell 79% to $9.8 million, reflecting a $41.8 million write-down of the company's investment properties. Excluding the property valuation change, earnings gained 8.3% to $51.6 million. Passenger volumes will be under pressure for the remainder of the year. It forecast full-year profit at the lower end of its $100 million to $110 million forecast range, excluding property revaluations and one-time costs. The shares rose 0.5% to $1.91 yesterday.

Dorchester Pacific (DPC): Executive director Paul Byrnes told investors at their annual meeting that a trading result "better than break-even" would be a satisfactory outcome in the coming year. The struggling finance company, which has a three-year deferred repayment plan for investors, is "open to discussions with industry players" about consolidation. The shares last traded on Feb. 16 at 4.5 cents and have slumped about 95% in the past year.

Fisher & Paykel Appliances (FPA): Prime Minister John Key told Parliament yesterday that the government has made no assurances to the appliance manufacturer over potential aid to help it remain viable. Key said any company bailout would be conditional on safeguarding jobs. The stocks dropped 11% to 64 cents yesterday.

Fletcher Building (FBU): CSR, Australia's No. 2 building products company, yesterday warned that profit may fall by more than a third as demand dwindles, sending its stock down 15% to A$1.26 on the ASX. Boral Ltd., Australia's biggest building supplies company, dropped 3.8% to A$3.03. Fletcher fell 5% to $5.30 yesterday, the lowest since September 2004.

Mainfreight (MFT): The biggest trucking firm on the NZX 50 Index said profit growth stalled in the first nine months of the year, as transport costs rose, reducing the benefit of a jump in sales. Profit from continuing operations edged up $6,000 to $29.4 million in the nine months ended December 31, the company said today. The shares fell 5 cents to $3.60 yesterday.

Oyster Bay Marlborough Vineyards (OBV): The grape grower typically incurs costs in the first half and determines its profitability in the second half, when the harvest yield and price are known. It posted a first-half net loss of $830,000, from a loss of $707,000 a year earlier. The difference mainly reflected a decrease in the fair value of interest rate hedges and a tax adjustment. The stock trades infrequently and was at $2.65 on Feb. 17.

PGG Wrightson (PGW): The rural services company was the biggest decliner of the NZX 50 yesterday, sliding 18% to a six-year low 98 cents after Silver Fern Farms rejected as too low a $10 million offer to settle a failed merger.

By Jonathan Underhill

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