Soaring aluminium prices look likely to encourage Rio Tinto to press for extending its Tiwai Point sweetheart deal

As  the  price  of   aluminium breaks  new  records,  closing in   on  $US3000  a  tonne,  global  giant  Rio Tinto  must  be  having  a  quiet  chuckle  to  itself.

Only  a   year  ago it  was  threatening   to  close  the  Tiwai Point  aluminium  smelter,  consigning  it  to  the  scrap  heap  with  the  loss  of  700  jobs,  directly,  and  another 1600  indirectly.  For Southland’s  economy   it  would have  been  a  mortal   blow.

At  that  time, aluminium  was  fetching  only $1800  a  tonne.

Rio  Tinto   said   the  smelter  was  uneconomic  because the  price of  electricity  was  too  high.  In July   last  year it said  it would close    the  operation  because  of  high  costs and a challenging market.

The decision to close the smelter had disappointed politicians and local power firms as it came when the COVID-19 pandemic began to cripple the economy.

Some  economists  argued  NZ  should  let  it  go  and  divert  the  Manapouri  electricity, the  cheapest  in  the  country,   to  other  uses.

Untangling the packed warehouse problem – dare we suggest it? – might solve the building materials problem

We wonder if there is a need for our Minister of Building and Construction  to arrange for a chat with the Minister of Transport and whoever else might help in getting building supplies from the place where they are stored to the places where they are needed.

We ask because on Tuesday we spotted a headline that advised:

Building materials shortage: Tradespeople unable to offer fixed prices due to shortages

Two days later we were drawn to the news that…

Warehouses in Auckland ‘completely full’ with building materials

The first story said housebuilders are being deterred from offering fixed prices on jobs by escalating prices and critical shortages of materials.

Rocket Lab launches on the Nasdaq – but Green MP is aiming to bring the company back to earth

New Zealand’s  tech sector’s growth into a major economic force  has  been   timely for NZ Inc,  particularly as Covid  has  struck  down   the international education   and   tourism   sectors.

And  then   there  have   been  standouts  like   Rocket Lab,  which  just  last week   had a smooth landing on the Nasdaq stock exchange with its shares quickly settling at a price that values the space launch company at US$5.2bn (NZ$7.4b).

For  the  boy  from  Invercargill, Peter  Beck,  the  Nasdaq  quotation was  the  culmination, on  the  financial side,  of  a  long  march  that   matched the  technical  success  of  his  rocket  venture.

Who  among   his  fellow  pupils  at  James Hargest College  would  have envisaged  their  colleague  would  be  directing  a  venture  planning  the  launch of  a   mission  to   Mars?

It’s  a   story  to  be  celebrated    not  just by  Southlanders   (ever  proud of  their  own,  including  sometimes   their  duds)    but  all  New Zealanders — although some  on the  Mahia  peninsula might  be  slow  to  join in.  Come  to  think  of  it,   the Ardern   government  has  managed  to  contain  its excitement.

Ports of Tauranga deserves plaudits for its performance in Covid-troubled times

The  latest Covid lockdown  has   delivered  a sharp  jab  to   many  NZ businesses, but  not what they had  been encouraged to think our wellbeing-focused government  was  planning  for them.   It  has  taken  the  gloss  off  what  might   otherwise have been regarded   as a  strong  reporting  season  for NZX-listed  companies.

The spike in coronavirus cases has led to NZ falling 26 places in Bloomberg’s Covid Resilience Rank.

We  had been the longest-running first-ranked country on the Bloomberg watch-list, since the inception   of the ranking  in November 2020. The plunge follows the spread of the Delta variant in Auckland and Wellington, which (when we checked yesterday) has resulted in 347 people testing positive for the virus across Auckland and Wellington.

Prime Minister Jacinda Ardern says lockdown is starting to work  and  she   insists   she is  acting   on  the  “best advice”  in  keeping  the  whole country  locked  down until  Wednesday,  when  there  will  be  a  slight  easing  with the  rest of  the  country  south of  Auckland moving  to level  3.

NZ is now ranked 29th on the Bloomberg ladder, two places above Australia which announced 1000 new cases on Thursday – Australia’s worst day of cases since the pandemic began.

F&P Healthcare gets a shot in the arm (it seems) as Covid-19 reappears in different guises

The  emergence of   new Covid-19 variants    has  sent   shock  waves  around  the  world,  even  in  countries    with  high  rates  of  vaccination.  In  the  US,  with  50%  of  the  population vaccinated,  Florida (for  example) has   had  10,000 cases    in   a day.

But while Covid in its different guises has  done  no  favours for the  global economy,  it has  possibly been a shot in the arm for one  of  New Zealand’s companies,  Fisher  & Paykel   Healthcare.  In  its  last financial  year the company’s net profit surged  by  a  remarkable 82%  to  $524m,  largely  because  of the  demand for  its  Optiflow product and  Airvo systems  at  the  height of the pandemic.

F&P  Healthcare  has  become  renowned for   its  products in  the  health  field,  and  last year  its Optiflow  technology  treated  an  astonishing  7m patients.

But as   the  Covid  pandemic  appeared   to be  loosening  its grip,  the  expectation   had  been   that demand for F&P  Healthcare’s hi-tech products would fall   back.  That  was  the   rationale  for  the  market  knocking   down  F&P Healthcare’s  share price by 15% soon  after  it  had  announced  its  result   in  May – a  result  which, because it was 82%  up  on  its  previous  best,  might have been  expected to  boost its share price. 

Dunedin’s modern-day gold rush – and business resurgence – has been triggered by a swathe of high-tech developments

For  New  Zealanders    whose  lives  have  been dominated   for  18  months  by  Covid-19, Dunedin’s  renaissance   may  not have registered  on  their  radar.  Yet  quietly  the southern  city has  sprouted  some  of  NZ’s  fastest-growing  hi-tech  businesses.

Once  a  city   that was home to some of  the  country’s biggest  companies, Dunedin had  several decades during which many of  its  brightest and   best  migrated  north and   its  life appeared to  revolve,  as  the  rest  of  NZ  saw  it,  about its  university (and the  Highlanders).

Whereas once it had been the  country’s financial capital, home to the  head  offices of  many  of  the  NZ’s leading  companies,  it  ceded  that title  first to  Wellington  and then  to  Auckland.

But  almost mysteriously,  it  has  found  a  new  life and suddenly   the  rest  of  NZ   has woken  to the  new  era  which  is  enveloping the  city.  It   is  somewhat like  the  gold  rush  which  promoted  it  to  be   at  the  front  edge of  NZ’s first  wave   of  prosperity  more  than 150  years ago.

Just  last week  global  investment firm  Kohlberg Kravis Roberts  announced  it  is acquiring a majority stake in Dunedin-based tech company Education Perfect,  in   a  deal that  values  the   enterprise  at  $435m.

A  month  previously  cloud software firm Timely  was  sold  for  a  sum  reported  to have topped  $100m.  Timely  offers cloud software services for appointment management, often used by those in the beauty or fitness industries.

Investors respond perversely to F&P Healthcare’s record profit and booming sales – but staff will benefit from the cheering result

Auckland-based medical equipment manufacturer Fisher & Paykel Healthcare has posted a record full-year result, as the pandemic drove unprecedented demand for its products.

Its net profit for the year to March rocketed 82%  to $524m, as sales increased by more than half to $1.97bn.

It  is proving  one of the  country’s  most successful business enterprises.

But even  its  founders, including  the  legendary Sir  Woolf  Fisher,  would have been astonished  at its  latest  remarkable  performance.

Led  by  its  outstanding CEO, Lewis Gradon, the  company’s  latest result  was driven by an 87% increase in sales of its hospital products, including its Optiflow and Aviro systems, which have proven to be effective in treating people who have Covid-19.

Sales of its hospital hardware and consumables  continued to track Covid-19 hospitalisation surges in countries around the world.

The pandemic had also accelerated the company’s expansion into different global markets, with significant growth in the North America, Europe, Asia Pacific regions.

The strength of the result saw the company look to reward all of its staff with a profit-sharing bonus of $29m.

The bid for Infratil from Australian Super was a fizzer – and now we can see why that’s been great for shareholders and NZ

One  of  the  busiest  companies  on  the  NZX,  investment company Infratil,  has  underlined that  not  all  of the  sharpest  operators in NZ business have  deserted Wellington   for  the brighter  lights  of  Auckland.

This  week  the  company  announced it has executed a conditional agreement to acquire between 50.1% and 60% of Pacific Radiology Group, a comprehensive diagnostic imaging business,  from its existing doctor shareholders for a total consideration of up to $350m.

Pacific Radiology is the largest private diagnostic imaging service provider in NZ, operating 46 clinics in the South Island and lower North Island and employing 90 radiologists.

The acquisition enterprise value of $867m implies an EV/EBITDA multiple of 12.6-13.3x.

Infratil chief executive Jason Boyes says the Pacific Radiology acquisition, if completed, will sit well with Infratil’s other high-performing, high-quality assets, and builds on its investment last year in Qscan Group, a leading diagnostic imaging business in Australia.

Covid-19 has helped Kiwi tech companies – but could they become our biggest export sector?

Technology  is  leading  NZ’s  economic  growth and  the  tech   sector could be on track   to  become the  country’s  biggest   export  industry, according  to some  familiar with the  breadth  of the industry here.

Not  surprisingly,  perhaps, Covid-19 travel restrictions levelled the playing field for Kiwi tech companies as companies around the world were forced to communicate online.

Authorities  within  the  sector  say  companies  in the   industry  have been growing faster than ever and profitability which grew three-fold between 2018 and 2019, according to the Ministry of Business, Innovation and Employment (MBIE), is still  accelerating.

Again, Covid-19  has   been  a  factor,  particularly  for Fisher  and  Paykel  Healthcare,  whose  technology   has been  in  heavy demand.,  as a  result of  the  pandemic.

Firms wanting to use te reo in their branding should check with Te Hamua Nikora as well as IPONZ

Learning Māori is first and foremost about having fun, according to Precious Clark, director of Maurea Consulting LTD, in a Newshub report on learning te reo Maori and embracing tikanga.

“It’s about giving people the tools so they can pronounce our words correctly and it’s about giving them the confidence to give it a go,” she said.

But getting it right isn’t always easy,  Newshub’s Mike McRoberts pointed out.

His report recalled the recent experience of a Canadian brewery which apologised after making a beer with New Zealand hops which it called the Pale Ale Huruhuru.

“The strict translation means feather, but it’s more commonly used to describe pubic hair. 

“After being called out by language watchdog Te Hamua Nikora, the brewery apologised.”

The beer company wasn’t alone.  A leather shop in Wellington apologised, too, after coming under fire for unwittingly taking its name from the Māori word “huruhuru”.