Business

A new model suggests NZ's unemployment rate could soon top 5 percent. Photo: 123rf.com New Zealand's unemployment rate may have already reached 4.8 percent, and could hit 5 percent by the end of the year, an economist says. AUT economics professor Tim Maloney has developed a new model that gives more timely information on likely changes in the rate. Stats NZ only updates the rate each quarter, whereas Maloney's model provides a monthly reading. "We collect data from the past to indicate what the unemployment rate is but by the time we look at it, that quarter is already gone. "To make good decisions, we need to know currently what the unemployment rate is, what the state of the aggregate economy is." Read more: Maloney said the UR-Now model estimated the unemployment rate might have hi...

Photo: Getty Images Specialty dairy company a2 Milk increased its full year profit on the back of an improved Chinese market. Key numbers for the year ended June compared with a year ago: Net profit $167.6m vs $155.6m Revenue $1.67b vs $1.59b Operating earnings $234.3m vs $219.3m Cash position $969m vs $757.2m No dividend a2 Milk benefited from rising sales on its infant milk formula (IMF) in China despite a falling birth rate and tougher economic conditions. Overall revenue was up 5 percent, as the improvement in China offset falls in Australia-New Zealand earnings, continued losses in the US market and for its Southland based company Mataura Valley Milk. Chief executive David Bortolussi said its strategy remained primarily focused on the China market to get positive growth in a chall...

SkyCity Adelaide Photo: 123RF / Andrey Moisseyev Casino operator SkyCity Entertainment has warned shareholders of a $94.3 million writedown on its Adelaide casino. The company said the non-cash charge reflected the costs of the move to electronic gambling cards. It said it had updated cost assumptions about making it mandatory for all players to use e-cards, rather than cash, at its Adelaide casino in 2026. Another driver behind the writedown was the additional legal and compliance costs that came with host responsibility programmes for staff. SkyCity said it was committed to implementing mandatory e-cards across all casinos to better monitor customer play and manage risk. It also expected to record a one-off tax charge of $129.6m in its financial statements for the year ended June. Thi...

Photo: RNZ / Marika Khabazi ANZ bank has cut some of its fixed home loan and term deposit rates again. The country's banks have been slicing interest rate offerings since a dovish statement by the central bank in July pointed to sooner than expected rate cuts. After the Reserve Bank cut the official cash rate to 5.25 percent last week, banks have continued to drop rates. ANZ's latest home loan cuts include a 40 basis point drop on the one year special rate to 6.45 percent, and a 50 basis point drop on the 18 month rate to 5.99 percent. Its one year rate is the best available on the market for that term. ANZ has also cut term deposit rates with all changes effective from 20 August. The bank had previously cut interest rates in July and August. Minutes after the RBNZ cut the OCR last week,...

Photo: RNZ The official cash rate (OCR) has been cut and banks have trimmed many of their home loan rates. But, with the OCR forecast to fall through the next couple of years, how far are mortgage interest rates really likely to drop? And how long is it worth hanging out for a better deal? As part of its updated forecasts, the Reserve Bank said in the latest monetary policy statement that it expects the OCR to drop to less than 4 percent by the end of next year, and to 3 percent by mid-2027. Gareth Kiernan, chief forecaster at Infometrics, said he expected a 25 basis point cut at each meeting between now and the middle of next year, and a couple of cuts in the second half of 2025. He said, plugging the bank's OCR track into Infometrics' interest rate model showed that by early 2025, a on...

Photo: RNZ / Nate McKinnon Contact Energy has reported a strong full year profit with revenue growth of 35 percent. New Zealand's second largest energy company has reported a net profit of $235 million in the year ended June, which was 85 percent up on the year earlier. Key numbers for the 12 months ended June compared with a year ago: Net profit $235m vs $127m Revenue $2.86b vs $2.12b Underlying profit $675m vs $573m Full year dividend 37 cents per share vs 35cps "The result has been a demonstration of strength in our underlying performance as we managed through market volatility, while keeping the momentum to deliver existing and new renewable developments," chief executive Mike Fuge said. He said the next 12 months will see Contact operating an additional 200 megawatts of newly cons...

Freightways chief executive Mark Troughear. Photo: Supplied / Freightways Courier and information management company Freightways reported a slight drop in profit as it faced higher costs, although revenue increased despite the tough economic environment. Key numbers for the 12 months ended June compared with a year ago: Net profit $70.9m vs $75.3m Revenue $1.21b vs $1.12b Operating profit $136.4m vs $134m Interest expense $1m vs $0.14m Final dividend unchanged 37 cents per share The company, which owned brands including New Zealand Couriers, Post Haste and Big Chill Distribution, said tough economic conditions meant domestic customer volumes were lower, although it was mitigated to some extent by new business gains. New Zealand courier volumes fell about 5 percent in a sign of the slo...

Photo: RNZ The Commerce Commission is set to reveal its eagerly awaited final report into competition in the retail banking sector on Tuesday. Its draft report found the sector lacks competition, with a two-tier market dominated by the big four Australian-owned banks, ANZ, ASB, BNZ and Westpac. The report suggested that the sector lacked disruptive forces to drive change and deliver benefits. It stopped short of calling for a break-up of the big banks, and there was little indication a drastic measure might emerge in the final report. The draft report also recommended the government look at ways to beef up [https://www.rnz.co.nz/news/business/524216/how-a-kiwibank-sale-might-work Kiwibank] by increasing its capital. When it came to competition for home loans (retail banks' biggest busine...

Photo: RNZ / Rebekah Parsons-King There is light at the end of the tunnel for the economy, as inflation and interest rates continue to ease. ASB's latest quarterly forecast indicates economic growth will be flat or down for the rest of this year, while global growth also remained below average. GDP, which had contracted in two of the past six quarters through to March 2024, was also down 0.5 percent from its 2022 peak, and more than 4 percent down on a per-capita basis. ASB chief economist Nick Tuffley said the economy had been showing "increasing signs of brittleness under the continued pressure from high interest rates", but there were brighter days ahead. "Painful as it is, inflation is getting under control," he said. "Recent encouraging signs suggest the Reserve Bank can be confiden...

The NZX in Auckland. Photo: RNZ / Kymberlee Gomes Retailers and construction companies are expected to suffer this earnings season, reflecting the domestic economic slowdown. Companies listed on the stock exchange will release their latest financial results over the next two weeks. Forsyth Barr is picking it will be the sixth-straight season of decline for the NZX. It would be an unprecedented backwards run worse than during the global financial crisis. Senior analyst Aaron Ibbotson said soft market conditions will have battered earnings and confidence, and expectations for companies such as Fletcher Building and the Warehouse were already very low because they have communicated demand is poor. "We've called out Vulcan, Warehouse, Sky TV, Air New Zealand that we think potentially will p...