The week in review

Friday 31st August 2001

COMPANIES

Sharebroker Credit Suisse First Boston cut its profit forecasts for beverage maker Frucor but maintained its "buy" rating on the shares. The 2002 forecast was clipped by $4.8 million to $17.1 million and the 2003 forecast dropped by $2.4 million to $27.8 million, but the broker said Frucor was still cheap excluding the UK initiative and would be "a steal" if the UK was a success.

Credit Suisse First Boston maintained its "buy" recommendation on Fletcher Challenge Forests despite last week's $749 million bottom-line loss. CSFB said operating earnings were at around expected levels and set a 12-month target price of 41c.

Nuplex Industries unit United Environmental applied for Commerce Commission clearance to buy competitor Solvent Services. United collects and treats waste liquids and bulk materials while Solvent disposes of and recycles solvent wastes.

Appliance maker Fisher & Paykel said it expected to supply to shareholders "some time in September" details of the planned separation of its healthcare and whiteware businesses. The shares have climbed steeply in anticipation of the separation, this week hitting an all-time high of $14.60.

AGL, the 66% owner of Natural Gas Corporation, said it was reviewing its holding in the wake of NGC's $302 million annual loss and its withdrawal from electricity retailing. One option was an offer to buy out the minority shareholders.

Tranz Rail shares jumped on speculation it would soon sign a deal to sell the Auckland rail corridor back to the government. The company had an agreement to sell the corridor to Auckland councils for $112 million but the government has stepped in to renegotiate the price.

Caltex and BP warned more service stations may have to be closed after Shell announced it would axe up to 50 stations over the next five years. Shell this week reported a bumper 2000 year profit but BP, Mobil, and Caltex all reportedly lost money.

Air New Zealand unit Ansett Australia went on the front foot, lifting full fare ticket prices by up to 6%. Rivals Qantas and Virgin Blue said they had no plans to follow suit.

The New Zealand Stock Exchange, whose members vote soon on demutualisation and listing on its own boards, will open an Auckland office in an effort to better serve listed companies and to attract more listings.

AGRIBUSINESS

Agriculture and Trade Negotiations Minister Jim Sutton said the government would manage the apple export quota to Taiwan from October 1. This would remain until Taiwan joined the World Trade Organisation, he said. The decision to allocate export rights to Taiwan by drawing lots from next year met a mixed reaction from the industry.

Kiwifruit exporter Zespri is forecasting a full year net return for suppliers of $449.4 million, up 2.7% on last year's $437.5 million.

Commodity prices are likely to struggle over the next year, WestPacTrust's quarterly Agribiz report said. This is due to a slowdown in world growth and the kiwi dollar regaining momentum.

The government agreed to extend the GM moratorium on field-testing to October 31 after voluntary agreement from the industry to give time for consideration of the royal commission's report.

The value of wine exports rose 17.5% to $198.1 million, largely due to a low New Zealand dollar. The volume of exports was up just 0.4% to 19.25 million litres. Domestic wine sales fell to an estimated 37.4 million litres, the Wine Insitute's annual report said.

BUSINESS

Higher costs for agricultural commodities, oil and electricity pushed up producers' price inflation but there are indications it is coming down. Figures for the June quarter showed inputs rose 1.4% in the quarter, taking the annual increase to 8.1 per cent, while output prices increased 1.3% during the quarter and 6.1% over the year.

Major power lines companies, generators and retailers signed up to a free complaint scheme aimed at resolving disputes over things such as billing and disconnection. Consumers may be awarded compensation if found to have been treated unfairly. Meanwhile, Powerco announced it would change its pricing structure to electricity retailers from November 1, with no fixed charges for residential users.

The latest Reserve Bank survey of expectations showed tighter monetary conditions for next year, with a higher dollar, reduced growth and steady interest rates.

TECHNOLOGY

Telecom revamped its website <www.telecom.co.nz> to include new sections for its business customers. It will have dedicated sections for its 1.4 million home, small and big business customers, as well as residential subscribers.

Xtra announced it would spend $7 million upgrading its email platform to cope with more than 50% growth on the mail system over the past year.

Telecom and the Otago Community Trust announced plans for a fast internet service through upgrading of 13 rural exchanges in the Otago region. The trust will invest over $200,000 in the project, which will bring broadband to 80% of business lines and 58% of residential lines from December 1.

A computer malfunction saw some TAB punters able to bet on a race when they already knew the result. The glitch is expected to cost the TAB several thousand dollars.Online

Journalist members of the engineering union employed at the New Zealand Herald walked off the job indefinitely on Wednesday afternoon. Radio New Zealand staff will meet this morning to decide whether to back their delegates' recommendation to strike today and tomorrow. Soldiers are on standby to take over the running of prisons in the face of action by 2000 prison officers. Nurses and related staff at Canterbury hospitals began "low level" industrial action.

Veteran activists Bill Andersen and Syd Keepa of the national distribution union were arrested by police when they tried to enter Carter Holt Harvey's Manurewa site.

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