Fisher and Paykel Healthcare puts pep back into the sharemarket

Fisher  and  Paykel  Healthcare startled  the  sharemarket  out  of  its  lethargy  this  week  when it  reported a  half-year profit  of  $221.8m  on revenue of  over $900m.  The company   again  dazzled  market analysts,  who  had  been expecting revenue  to  fall  after the  record  achieved  in the  previous  12 months, largely through the provision of  medical equipment for hospitals to combat  Covid.

The  Auckland-based  company has  become  the  flag-bearer  for the  hi-tech sector in NZ and   has  signalled  further  growth, announcing that  over the next five years it expects to invest $700m  in land and buildings. This includes a fifth building, completing its Auckland campus, and acquiring land for a second NZ campus.

Over the next five years the company expects to add an additional three manufacturing facilities located outside NZ, the first of which is currently under construction in Tijuana, Mexico.

What  sets F&P Healthcare apart from  most NZ firms  is its  investment in R&D which in this half year was 8% of revenue, or $75.7m.

The  half-year announcement  sent  investors piling  back  into the stock,  which  bounced  up 5%.

The  company’s market capitalisation is  creeping  back close  to  $20 billion.

Port of Tauranga handles near-record import surges but red tape is slowing progress with expansion plans

As New Zealand’s largest port, Port of Tauranga is  playing a vital  role in keeping cargo moving throughout the global disruption and local upheavals caused by the Covid-19 pandemic.  And  it  has  ambitious  plans, which  would  strengthen   its  key  place  in  NZ’s  transport  system.

Fortunately  for our export industries,  the  port  overcame the  effects  of  the pandemic’s impact on the international supply chain which  included extensive shipping delays, service cancellations, scarcity of supply and volume volatility.  This has led to congestion in the container terminal and at its MetroPort facility in Auckland.

The situation was at times exacerbated at times by operational challenges at Ports of Auckland, particularly in the first half of the financial year.

While  there  were 106 fewer container vessel visits between September 2020 and June 2021, the average cargo exchange per container vessel increased 21.7% due to the reduced vessel frequency and shippers maximising available capacity.

Investors see promising signs of recovery in infant formula sales in China

After  a  rough  ride  since  Covid-19  struck, the New Zealand economy  is  in   better   shape   than might  have been  predicted  at the  onset  of the  pandemic.  Yet labour  shortages,  an energy crisis  in Europe  and  China, and  massive  inflationary  pressures suggest  that  the  passage  ahead   will  be  anything  but  smooth.

With  the  government abandoning  the  elimination  strategy  and  moving  towards  living  with  endemic  Covid, the  country  is adjusting  to  the  prospect  of  a  new  normal.  But  without  any  sign of  the  number of  cases  of the Delta  variant  diminishing, restrictions  may  persist  for  longer  than  might  have been  imagined  just  weeks  ago.

It’s  a  blow  to  industries  looking  to  inflows  of  workers  to ease  labour  shortages, particularly  in the  rural  regions,  which  last  season  sustained  the  economy  with  the  production of  commodities  that  were  in  relatively  tight  supply  in  world markets,  fetching excellent  returns.

Boris the shape shifter – yeh that sounds right – but is there substance to the shape?

It takes a lot to grind down the hard-working ideologues at the Guardian but Boris Johnson will stop at nothing.  There was a whiff of admiration amidst the self-loathing in the opinion columns “The Tories have become the party of optimists” and “Shapeshifting Tories have mastered playing to the crowd”

You might have thought the burdens of the premiership and near-death during Covid would dampen his natural ebullience.  But at this week’s Conservative party conference his autodidactic illumination of classical reference, historical allusion and ribaldry was undimmed.  Who else, a fortnight after – again – Guardian headlines “Boris admits he has six children”, would say that Britain has only 0.8% of the world’s population, despite our best efforts.

Why NZ should get behind Miles Hurrell as he aims to broaden Fonterra’s product range

As  New Zealand moves  towards  reconnecting with the world,  62%  of  the   business  leaders  surveyed  in the  NZ  Herald’s “Mood  of the  Boardroom”  say  they are not  satisfied with the government’s  plan  for  reopening the country.  International business is  being  lost due to border difficulties.

So  the  NZ economy  again looks likely to be propped  up by the primary  sector. On  that  front, the  news  is  positive.  International markets  are  exhibiting  strong  demand  for our products,  with the  result  that export  prices  are even more  buoyant  than  seemed  likely   just  three  months ago.

Lamb is  fetching   record  prices   and  dairy,  despite  some  earlier predictions that global production  would  push  down prices, has  moved  in  the  other  direction,  to  the  extent   that Westpac senior  agri-economist  Nathan  Penny   this  week  raised  his  forecast  for  Fonterra’s farmgate  milk price this  season  by  75c  to $8.50kg/MS.  That would surpass the co-operative’s previous record high of $8.40kg/MS paid in the 2013/14 season.

Fonterra’s own forecast is for a  payout  between  $7.25 and $8.75kg/MS,  with  a  mid-point of  $8. That’s ahead of its $7.54  last season.

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.