Chris Lee & Partners Ltd

Market News 30 March 2026

David Colman Writes:

Dairy companies’ announcements last week for Fonterra and Synlait Milk looked very different despite the New Zealand dairy sector having a strong 2025 to 2026 season in line with high commodity prices and a weak local currency.

Dairy farmers benefit from Farmgate Milk Prices at historically high levels.

The dairy giant Fonterra’s announcement was titled ‘Fonterra delivers another strong result for HY26’. 

The co-operative’s revenue climbed $1.3 billion to Total Group revenue of $13.9 billion for the first half of its financial year.

Operating profit improved by $124 million to $1.231 billion

Profit after tax was $750 million, up from NZ $729 million

Earnings per share improved from 45 cents per share, up from 44 cents, with normalised earnings per share at 51 cents per share, up from 47 cents.

Continuing Operations return on capital improved to 11.2% up from 10.4%

An interim dividend of 24 cents per share and a Special Mainland dividend of 16 cents per share  (both fully imputed) were declared.

As a result of the sale of the consumer brands business Fonterra farmer shareholders and unitholders are expected to receive a capital return of $2 per share/unit on 14 April.

Fonterra will invest $1 billion back into the company.

The company provided a forecast Farmgate Milk Price range of NZ $9.40 - $10.00 per kgMS and expects milk collections will be up 4% to 1,565m kgMS.

Fonterra’s FY26 full year forecast earnings range for continuing operations was provided in the range of 50 to 65 cents per share.

The business continues to expand with the construction of the newly completed Studholme advanced protein hub, with first trial products off the line in February 2026.

The company has further developments including:

- Clandeboye butter plant expansion commenced in January 2026, with product expected off the line in April 2027.

- New Edendale UHT cream plant under construction with first products to come off the line in late 2026.

- Edgecumbe pastry butter sheet line expansion with product off the line expected in April 2027.

CEO Miles Hurrell provided outlook noting that the conflict in the Middle East is having an impact on Fonterra’s supply chain which may increase inventory levels and costs during the second half of the year.

He warned that there was potential for further volatility in global commodity prices but was confident that it can be managed due to Fonterra’s scale and the strong relationships the business has with its customers.

Hurrell, who has less than 6 months left in the job after a 25-year career at Fonterra (including 8 as CEO), will be handing his successor a business in excellent shape. A new CEO is expected to be revealed in the months ahead.

Synlait Milk

In contrast to Fonterra’s strong results, Synlait Milk reported an EBITDA loss of $34.7 million, with underlying EBITDA of $4.1 million.

It’s reported net loss after tax was $80.6million, with an underlying loss after tax of $27.3million.

Net debt increased 88% to $472.1million.

Revenue increased by $32.3million to $949 million (up 3.4%) and Gross profit decreased to $3.1million (down 96% from 83.9 million) – noting both these figures include both continued and discontinued operations.

The company provided a forecast for the average Farmgate Milk Price for the 2025/26 season of $9.50 per kgMS with additional premium payments (specific to Synlait) taking the forecast to $9.90 per kg MS.

Looking ahead to the second half the company did not provide FY26 financial guidance with the board withdrawing guidance for the remainder of the financial year.

ANZ KangaNews Capital Markets Forum

I recently had the privilege of attending the ANZ KangaNews Capital Markets Forum, a preeminent event for many financial sector professionals.

This year the event was held at the SkyCity New Zealand International Convention Centre which opened its doors in February.

The centre is an impressive building which can host multiple events/exhibitions from large to small simultaneously.

The forums over the years include a series of discussions by expert panellists and presentations from economists, RBNZ representatives, and politicians.

The day began with Sharon Zollner commenting in depth regarding New Zealand economic indicators.

Her job of extrapolating data to provide a forecast of the country’s economic trajectory made more difficult due to the uncertainty associated with the conflict in the Middle East.

Data, ignoring the disruption to global energy flows, pointed towards New Zealand GDP growth in a recovery phase.

The expected recovery comes after a slowdown which: curtailed CPI inflation from as high as 7.3% to closer to 3%; shrank the current account deficit from 9% of GDP to 4%; reduced the level of household debt as a % of GDP to pre-covid levels; resulted in corporate debt as a % of GDP at its lowest level in 20 years; sees house prices at pre-bubble levels.

In the second half of 2025 there was an almost economy wide improvement, led by an already strong agricultural sector, with the housing market being an exception.

Government debt, mediocre productivity, infrastructure deficits, and energy remain serious issues, but the recession is viewed as over.

2026 started well but inflation remains a threat with the CPI (Consumer Price Index) above 3% and the oil price shock likely to move interest rates higher.

The impact on New Zealand from the Middle East conflict depends on the persistence of disruption and not just on its scale.

Petrol prices that have increased sharply might be ignored by the RBNZ in regards to monetary policy if they are deemed to be a brief and less costly blip but will be more of a concern with inflation greatly influenced by higher freight costs and shipping disruption, both of which would tend to increase costs and weigh on the NZ dollar.

Higher costs and greater uncertainty are undeniably negative for households, investment and jobs.

The labour market is forecast to improve with ANZ estimating that the unemployment rate is at its peak at 5.4%.

The ANZ continues to forecast interest hikes from December this year but is mindful of how the oil shock and any potential reversion may play out in addition to inflation indicators and growth projections that may mean hikes come earlier.

Mortgage rates and term deposit rates, including those offered by ANZ and others, have crept higher.

Regarding debt as a percentage of NZ GDP over the last 5 years - household debt has been remarkably stable with the household debt to income ratio no worse than before the pandemic, business and agricultural debt represents a smaller percentage, and government debt has become a higher percentage.

Fiscal deficits, not helped by high oil prices, are forecast to remain for the next 4 to 5 years with government debt on track to rise from $185 billion (42% of GDP) in 2025 to peak above $250 billion (46% of GDP) by 2030.

A chart was presented that showed that there were 7 New Zealanders of working age per over 65 year old in the 1960s which has fallen to about 3.5 today and is expected to be 2.5 by 2050 which will put pressure on health and superannuation costs.

Net migration has picked up from almost an even number of people entering and leaving the country but remains subdued. This is essentially the only way the country’s population is expected to grow and help increase the number of people of working age.

Tourism has lifted to 95% of pre-pandemic levels adding to the number of relatively optimistic datapoints presented.

My impression of the information presented was that New Zealand was set to improve gradually from a period of weakness but still very much depends on external factors such as a hopefully brief disruption to energy markets, tariff settings, and demand from our major trading partners. Our biggest customers are China, Australia, the USA, the EU, and Japan.

A Panel discussed the retail bond market of which many of our clients participate in.

Bond issuance in New Zealand was minimal last year with many issuers choosing to issue bonds in Australia and further afield.

The lack of scale and diversity of domestic bonds was highlighted with the debt market in Australia being approximately 20 times the size of New Zealand even though Australia has only 5 to 6 times the population.

It seemed based on certain panellists’ comments that institutional investors such as fund managers tend to downplay the role of the NZX Debt Market which allows for the trading of bonds, notes, etc.

I would counter that view by noting that having bonds traded on an exchange is important for managing maturity profiles, price transparency and liquidity.

The nature of the fixed interest market is that it is dominated by both institutional and retail investors with a buy and hold strategy which limits potential liquidity regardless.

Bondholders, even with no initial intention of selling before maturity, and issuers should still welcome a secondary market which allows them to offer bonds for sale on market.

Goodman Property Trust

Goodman Property Trust unitholders are expected to vote tomorrow on an extraordinary resolution to adopt a stapled structure.

This change is intended to give the business greater strategic flexibility.

If approved, the Trust will transition to a stapled structure. Goodman New Zealand Limited will become the corporatised entity, replacing the current trust structure.

Shares in Goodman New Zealand Limited will be stapled to shares in Goodman Property Services (NZ) Limited. These will trade together as stapled securities and cannot be transferred separately.

Following the change, the combined entity will be known as Goodman New Zealand Limited & Goodman Property Services (NZ) Limited (NS).

The new stock exchange code, GNZ, is expected to take effect from Tuesday, 7 April 2026.

Property for Industry bonds

Property for Industry Limited (PFI) announced today that it is offering a new 6.5 year senior secured fixed rate bond.

An interest rate has not yet been set but based on current market conditions, we expect it to offer around 5.35%.

PFI is an NZX listed industrial property specialist with a portfolio of over 90 properties worth more than $2 billion.

The Bonds will be listed on the NZX under the ticker code PFI040.

Property for Industry are paying the transactions costs for this offer, accordingly, clients will not be charged brokerage.

If you would like a FIRM allocation, please contact us no later than 10am, Wednesday, 1 April.

Payment date will be due no later than Friday, 10 April.

Mercury Bonds

Thank you to everyone that participated in the Mercury Energy bond issue.

The interest rate for its 7-year Senior Green bond was set at 5.17%, with payment due no later than 31 March 2026.

Clients interested in this bond are welcome to contact us as we have a small supply remaining.

Travel

13 April – Taupo – Johnny Lee

14 April – Hamilton – Johnny Lee

15 April – Tauranga – Johnny Lee

16 April – Lower Hutt – David Colman

17 April – Napier – Johnny Lee

Chris Lee & Partners Ltd

Market News 23 March 2026

Johnny Lee writes:

WHILE the conflict in the Middle East continues to dominate headlines and drive markets, two market upgrades from two different companies have given investors more evidence of a market beginning to rebound.

Turners Automotive Group published an update to its earnings guidance last week, upgrading its estimated 5%, from “around $60 million” to “around $63 million”, following a strong summer.

Sales volumes have grown and Turners continues to win market share against its competitors. The company’s financing arm is also performing well, with its lending book growing strongly.

One of the most impressive aspects of Turners’ business has been its ability to perform well across both sides of the cycle. Combined with a very effective approach to marketing, the company shares are proving themselves as a resilient growth stock.

The escalating conflict abroad, and the impact this has had on the petrol price, may present an opportunity for the automobile industry, particularly among those consumers seeking to shield themselves from the economic impact of the rising oil price.

The company is hosting an Investor Day tomorrow (22 March), when it will outline its strategy and financial targets for the next five years.

 _ _ _ _ _ _ _

MEAL-KIT delivery company My Food Bag provided an update to the market last week, as the company faces rising costs and a particularly price-sensitive consumer.

Fortunately, these costs have been passed on and My Food Bag has improved its margin in the second half of the (financial) year. The company now forecasts revenue to increase 6% for the half, and net profit to land around $6.6 million, a modest increase from last year's $6.3 million.

While this is a far cry from 2022’s figure of $20 million, it will mark the second consecutive year of profit growth and may provide hope to shareholders that the company has found its footing.

One of the strategic initiatives pursued this year was to expand its offering, as consumer appetites continue to evolve. This includes a new higher protein option, and a “GLP-1 support range”.

2026 may be the final year of net debt reduction for My Food Bag, which stood at only $5.5 million in September. From there, the focus may turn to the future of the dividend, which currently sits around 10% gross.

The meal-kit sector continues to evolve globally, with My Food Bag’s main competitor – HelloFresh – refocusing its attention on larger markets and withdrawing from smaller markets. New Zealand’s market is dominated by these two, with a number of smaller participants seeking to grow their own market share.

For long-term investors, the update was a further, small step in the right direction. For more recent investors, the update will be encouraging and should continue to support a modest but gradually growing dividend.

---------------

MY Food Bag’s commentary around GLP-1 and the distinct needs of such consumers is worth elaboration.

GLP-1 refers to glucagon-like peptide-1, a hormone that helps regulate blood sugar and appetite. In this context, GLP-1 refers to the increasingly popular medications that reduce appetite and are prescribed for managing Type 2 diabetes and assisting those looking to better control their weight. Within New Zealand, Wegovy is perhaps the best known of such medications.

In 2025, surveys revealed approximately 12% of US adults, or 30,000,000 Americans, use these medications. For context, in 2024 this figure was below 6%.

Women are significantly more likely to use them – 15% compared to 9% for men - and the 50- to 64-year-old cohort are the highest users, with 22% of Americans in this grouping currently using them. New innovations, patent expiries and changes in delivery from injection to pill form, are expected to fuel further growth.

Closer to home, 2% of Australian adults now use these medications, but discussions are currently underway to subsidise them. Even without subsidies, demand for GLP-1 is rising sharply in Australia.

For My Food Bag, the impact will be a consumer who prefers smaller meals, with a greater emphasis on nutritional content than satiety. This has led to the company engaging with nutritionists to design meals that focus on these elements.

However, the broader economic impact of this global trend is continually being explored. Studies in the US have analysed the impacts of these medications and provide a useful “canary” to our businesses, should New Zealand see a similar increase in demand to our OECD peers.

The obvious impact is on food consumption. Households with at least one GLP-1 user spend about 5% less on groceries and fast food. Alcohol consumption, which was already in decline, fell further among GLP-1 user groups.

The clothing industry is seeing an impact, with studies showing the demand profile for apparel shifting rapidly. Demand for smaller sized clothing is rising sharply, with an even sharper decline in demand for larger clothes. This has caught the clothing industry off guard, with the sudden shift in demand said to have caused billions in reduced profits for retailers.

Demand for supplements, such as protein, fibre and key vitamins is rising among GLP-1 users. As overall food consumption declines, nutritional deficiencies emerge, requiring consumers to supplement their diet to maintain good health.

Even air travel may benefit. Studies are now formally linking GLP-1 usage to reduced fuel consumption, which may lead to modest reductions in the cost of flying.

The longer-term effect on the healthcare industry is another to consider. While obesity in the US has gradually increased over the past few decades, more recent data suggests obesity rates, particularly from that 50 to 64 age group, are beginning to decline. The impact this has on the US healthcare system – ranging from cardiovascular health to sleep apnoea – remains to be fully seen. Negative long-term effects may emerge too.

This even has flow-on effects to the insurance industry. Munich Re, the world's largest reinsurance company, recently published a thought piece discussing the impacts observed during the past few years as GLP-1 use climbed, concluding that the health and life insurance industries face “a watershed moment” and will need to integrate GLP-1s into their underwriting programmes.

Locally, the likes of EBOS, My Food Bag, Fisher and Paykel Healthcare and Hallenstein Glasson will be well aware of the evolving trends from consumers. Investors should be too.  The challenge is determining whether this particular trend will be long-standing and represent a lasting shift in consumer behaviour, and which companies stand to benefit.

_ _ _ _ _ _ _ _ _ 

Mercury Bond

Mercury Energy is offering a 7-year senior fixed rate bond. The offer is open now and is expected to close at 9am on 25 March 2026, with payment due by 31 March.

Mercury is one of New Zealand’s largest renewable electricity generators and retailers, is 51% owned by the New Zealand Government, and holds an investment grade credit rating of BBB+. 

The interest rate is expected to be in the range of 5.00% to 5.20% per annum.

Mercury will not be covering brokerage costs for this offer, so normal brokerage will apply.

If you would like a firm allocation, please contact us by 9am this Wednesday 25 March with your CSN and the number of bonds you wish to purchase.

Full details of the offer, including the indicative terms sheet and presentation, can be found on our website below:

https://www.chrislee.co.nz/uploads//currentinvestments/mcy080.pdf

Please note that this issue may be scaled.

_ _ _ _ _ _ _ _ _ _

Travel

13 April – Taupo – Johnny Lee

14 April – Hamilton – Johnny Lee

15 April – Tauranga – Johnny Lee

16 April – Lower Hutt – David Colman

17 April – Napier – Johnny Lee

Chris Lee & Partners Ltd

Market News 16 March 2026

Johnny Lee writes:

Volatility continues to be a key theme across markets, as the conflict in the Middle East continues to weigh on investor behaviour.

The price of oil has ranged from 60 USD to 120 USD over the month, while the fear of supply shortages has sent some consumers to begin stockpiling their own reserves, according to media. 

These fluctuations caused Air New Zealand to suspend its guidance, issued only a few weeks prior.

While Air New Zealand had hedged 83% of its fuel costs for the remainder of the financial year, this hedge is specific to Brent crude. Air New Zealand’s planes, of course, do not operate on crude oil. Jet fuel requires refining, and the cost of this refined fuel has skyrocketed over the last week, with jet fuel prices in Singapore leaping nearly 140%.

Air New Zealand notes that the cost of refining crude into jet fuel has broadly remained around $20 USD for some time, before rising to nearly $115 dollars per barrel. An extra $100 USD a barrel, approximately $170 NZD, costs the airline millions each day.

This price shock will be a good test for the elasticity of airline demand. Air New Zealand has already announced it will be adjusting fares higher and cancelling flights to recoup this sudden increase in cost. Obviously, existing sales will be honoured and reflected in the loss to be announced in August. The challenge will be to sell future tickets at higher prices and recoup this loss from travellers needing to travel.

Other airlines have struggled in the aftermath of the Middle Eastern conflict. Qantas’s share price in Australia has fallen 20% in the last fortnight, within Virgin Australia down 10% over the same timeframe. Air New Zealand shares have fallen around 20%.

Air New Zealand’s share price has struggled for some time. The developments in the Middle East, and the subsequent pressure on the global supply chain for fuel, has highlighted just how precarious its position is. August’s result was already forecasted to be a loss, and the company is warning this loss will grow every day.

Just how significant this loss is will be influenced by the duration of the conflict, and the willingness of consumers to pay significantly higher fares for air travel.

 _ _ _ _ _ _ _ _ _ _

Briscoes has published its full year results to the market.

Profit was very modestly lower at $59.2 million, compared to $60.6 million last year. Driving this was a fall in margin as the company faced increasing competitive pressure, and a consumer increasingly sensitive with its discretionary spending.

The company maintains a strong cash balance, with net cash of around $100 million. The company has no term debt but does expect to begin drawing down on its new funding facilities next month, as it continues its capital expenditure programme. This includes its new distribution centre at Drury, which is expected to be a major strategic advantage for the company long-term.

Online sales continue to grow and now make up over 20% of total sales. Many businesses ramped up investment into online sales platforms in the aftermath of COVID, after the weaknesses to the model were revealed at the time.

A dividend of 10 cents per share was declared, bringing the total dividend for the year up to 20 cents per share. This is down 2.5 cents from last year.

Outlook was positive. While the company highlighted the recent geopolitical disruption in the Middle East – specifically highlighting the impact of high fuel costs on discretionary spending – Briscoes is still confident that its distribution centre investments will be “transformational” for the company and will support the company’s long-term growth plans.

 _ _ _ _ _ _ _ _ _ _

Port of Tauranga has hosted its investor day, providing shareholders with an insight as to the company’s current strategy and what it sees as the main factors influencing the port industry at this time.

The Port sees further evolution of New Zealand’s port infrastructure network, leading to a “hub and spoke” style system. In such a system, increasingly large ships would land at “hub ports” – such as Port of Tauranga – before smaller ships distribute goods to smaller, regional “spoke ports” around the country.

Three key factors will drive Port of Tauranga’s strategy going forward.

The first is population growth. Statistics New Zealand projects that an increasing proportion of our population will be based in the upper half of the North Island, as New Zealand continues to grow in the years ahead. More people will mean more consumption, which means more throughput for the logistics sector.

The second is import growth. This is partly driven by changes in the warehousing sector, where new, lower-cost supply is coming online nearer to Port of Tauranga’s “catchment” in the Waikato and Bay of Plenty regions. If more companies are choosing to store goods closer to the port, it should result in growth in Port of Tauranga’s share of the market.

The last is export growth. While dairy and the meat sectors are gradually shifting towards “fewer but higher value” exports, the horticulture industry is anticipating strong growth. More product, again, should mean more throughput.

The presentation also discussed trends in the shipping industry. Carriers plan to continue deploying larger, lower-emission vessels, but this strategy requires ports to have the necessary capacity to process these deployments. Port of Tauranga’s Stella Passage development, which is currently seeking consent through the Fast Track Process, hopes to be a part of this solution.

Port of Tauranga is a key part of New Zealand’s infrastructure and a vital connection to the rest of the world. Both New Zealand and the world of logistics continue to change, and Port of Tauranga is looking to position itself to take advantage of the opportunities such change present.

_ _ _ _ _ _ _ _ _ _ 

Contact Energy’s retail offer has closed. Contact received bids for $251 million, more than three times over-subscribed.

While the offer was to raise $75 million, Contact has exercised its right to accept over-subscriptions and increased this to $125 million, meaning the offer closed two times over-subscribed.

Scaling was not uniform. The terms and conditions of the offer state that scaling would be undertaken according to the number of existing shares. Typically, this means scaling is more severe for small shareholders.

Settlement of the new shares has already occurred and are now saleable. The refund of the scaled amount is expected to be paid later this week.

_ _ _ _ _ _ _ _ _ _Mercury Energy Bond OfferMercury NZ Limited is considering an offer of up to $250 million of 7-year senior fixed rate bonds. Further details of the offer are expected to be released next week.

Mercury is one of New Zealand’s largest renewable electricity generators and retailers and is 51% owned by the New Zealand Government. The company currently holds an investment grade credit rating of BBB+ from S&P Global Ratings.

The interest rate for the bonds has not yet been announced, however given current market conditions, we are expecting it to offer around 5.00%. This will be confirmed when the offer documents are released. Mercury is unlikely to cover the brokerage costs for the offer. This will be confirmed next week.

If you would like to register your interest, pending further information, please contact us promptly with the amount you wish to invest and the CSN you intend to use.

Please note that indications of interest do not constitute any obligation or commitment to invest.

_ _ _ _ _ _ _ _ _ _

Travel

13 April – Taupo – Johnny Lee

14 April – Hamilton – Johnny Lee

15 April – Tauranga – Johnny Lee

16 April – Lowe Hutt – Dadid Colman

17 April – Napier – Johnny Lee

Chris Lee & Partners Limited

Market News 9 March 2026

Johnny Lee writes:

While analysts pour over company results and digest the conclusion of reporting season, the events in the Middle East have retaken centre stage and forced investors to, once again, recalculate risks within their portfolios.

The typical response to these situations has been one of investor withdrawal, with investors choosing to pivot out of share investments, towards bonds, cash and commodities. 

The impact has been somewhat limited on the sharemarket so far. The oil price has been the main mover, up almost 30% this month. Iran contributes approximately 5% of global oil production, and borders the Strait of Hormuz, which sees 20% of global oil and gas pass through it.

New Zealand has no major oil producers listed on our exchange. Investors must instead look to Australia, where both Woodside and Santos have risen sharply. Large scale consumers of petrol and those adjacent to these companies – airlines, airports, transportation companies and the like – have been among the most negatively impacted.

The move in the oil price does carry implications for our inflation rate and, accordingly, interest rates. While petrol has diminished over time in terms of weighting, it remains an important driver of household spending across the country. 

The more relevant consideration will be whether the spike in the oil price is temporary or enduring. The Reserve Bank has shown willingness to look through temporary spikes in the quarterly inflation figures, but a prolonged conflict would jeopardise that logic.

This uncertainty has already claimed a scalp, with Property for Industry announcing the postponement of its proposed 6.5year bond offer. Bond issues have been noticeably infrequent this year, a trend driven by both weak issuance over the COVID years (bonds which would now be maturing) and a preference to finance outside the listed bond market.

The key risk for now looks to be escalation, and the possibility of a broader impact on supply chain management. Expect share markets globally to be volatile in the short-term.

_ _ _ _ _ _ _ _ _ _

Prior to these developments, reporting season saw a number of companies move over the course of February. The overall index rose around 2% in February, on the back of what was ultimately a cautiously positive reporting season.

A2 Milk was the star, trading up nearly 20% after its result. Its result showed revenue growth of 18.8% driven by both strong growth and favourable exchange rate movements. Growth was seen across the board, and the company remains hopeful that a recovery is underway in Chinese birth rates, following a lift in marriage rates in 2025.

Fisher and Paykel Healthcare climbed modestly, up 2% after its update late in the month. FPH upgraded guidance for the full year, with growth seen in hospital demand. Tariffs remain a question mark, but the company reasserted its view that its strategy and direction would remain the same for now and focus on the long-term.

Auckland Airport enjoyed a strong response to its result, trading up nearly 10% before falling back following the actions in Iran. Traveller numbers are up across the board – both domestic and international – while development within the Auckland Airport infrastructure remains on track. The dividend was increased, and outlook for the full year was increased at the bottom end.

Genesis Energy saw its share price sink, following the announcement of its capital raising. This is not particularly unusual with offers of this size, as buyers elect to leave the market and participate in the offer instead. Genesis fell 8% over the month.

Fletcher Building had a weak February, falling 5% over the month. While the result itself was broadly in line with expectations, the company published weak guidance, suggesting a meaningful recovery would not occur until at least next year. No dividend was declared, as the company heads towards three successive years with no dividend return.

The company remains focused on controlling what it can: costs, capital discipline and continued portfolio simplification. This simplification may mean more asset sales from within the group. Indeed, Fletcher Buildings business may look very different this time next year. 

Air New Zealand also declined 5% last month, after posting a worse than expected result to its beleaguered shareholders. The airline made a first half loss of $59 million, after warning of a $30 to $55 million dollar loss a few months prior.

Continued delays in engine maintenance drove the result, limiting the company’s ability to plan and sell additional capacity. Unfortunately, the company forecasts a similar result in the second half, although it notes that dialogue concerning compensation from the engine manufacturers remains ongoing. 

February’s reporting season was, overall, cautiously optimistic, and led to the index rising for the month. The subsequent breakout of conflict across the Middle East largely reversed these gains, and highlights just how quickly volatility can be introduced to the world.

_ _ _ _ _ _ _ _ _ _

Below is a brief update of three share offers seen this month, provided in response to client request:

Contact Energy’s offer is now closed, with the price trading well in excess of the $8.75 offer price for the duration of the offer period. The $75 million raised (compared to a $9,800 million market capitalisation) was relatively small and will likely see scaling.

Genesis Energy’s offer closes on the 17th of March. The share price has declined since opening to around $2.24, but remains above the $2.05 offer price. With the ongoing volatility surrounding the Middle East, investors may choose to wait until nearer the 17th before making their final investment decision. 

Santana Minerals offer closes on the 13th. This offer is at a firm price of 90 cents Australian – equivalent to perhaps $1.07 – which is similar to the on-market price. While brokerage is a consideration, shareholders will be carefully watching the price to ensure they do not pay a price in excess of the value of the shares.

_ _ _ _ _ _ _ _ _ _

Genesis Energy Rights Share Offer

Genesis Energy’s $300 million rights issue opened on 4 March. This offer has been priced at $2.05.

The Crown has already confirmed it will participate in the raise.

 Shareholders on the register as at the close of business 26 February will be entitled to buy 1 new share for every 7.9 held. Applications must be made online through the website: www.shareoffer.co.nz/genesis and only require a CSN and bank account details.

Property For Industry Bond Offer

PFI has announced an offer of 6.5year senior secured fixed rate bonds.

More details are expected shortly.

At this stage, given current market conditions, we are expecting it to offer a coupon of around 5.00%. 

If you would like to register your interest in this offer, pending further information, please contact us with the amount you wish to invest and the CSN you wish to use.

_ _  _  _ _ _ _ _ _

Travel

10 March  - New Plymouth - David Colman

11 March - Palmerston North - David Colman

12 March - Nelson - Edward Lee

13 March - Lower Hutt - Fraser Hunter

Chris Lee & Partners Ltd

Market News - 3 March 2026

Johnny Lee writes: 

HOT on the heels of its competitor Contact Energy, Genesis Energy has published its results and announced its own capital raising. 

The results would have pleased most shareholders. Net profit climbed 36%, which led to a modest increase in the dividend to 7.30 cents per share. While this is significantly lower than the dividends seen prior to the Kupe closure, it represents an increase on last years 7.13 cents per share. 

Development work continues. The Edgecumbe solar farm is now proceeding, Leeston is on track for a decision by the end of the year, and Foxton will apply for fast-track consent in the third quarter of this year. Various wind projects are also in the pipeline, including Genesis agreement to explore the viability of offshore wind in Taranaki. 

Batteries and biomass are also progressing. The battery storage project at Huntly remains on schedule and within budget, and is expected to be operational late this year. At the same time, Genesis will make its final decision regarding the expansion of this project. Additional groups are being sought to establish its biomass supply, as agreements with the existing trio Carbona, Foresta and Natures Flame, progress. 

The important news for shareholders, however, was the decision to raise $400 million via an equity issue, broken into two components. 

$100 million was secured almost immediately. This was done via a placement at $2.15 per share and closed well oversubscribed. These shares have already been settled and are trading on market. Shareholders of these new shares are also eligible for the second leg of the offer. 

That second leg is $300 million and is being raised via a separate offer at $2.05, a further discount of 10 cents per share. $300 million equates to a ratio of 1 new share for every 7.9 held, meaning that a shareholder with 10,000 shares will be entitled to 1,265 new shares, or $2,593 worth of new shares. 

Genesis is, of course, majority owned by the Government. The Crown has already confirmed it will participate in this offer to maintain this majority, meaning that full subscription is likely.

The $400 million will initially be used to reduce debt, before being used to accelerate its development pipeline.  

Combined with the $525 million raised from Contact, this Genesis offer will mark $925 million raised from two of our largest companies in the past month. This has an impact, with a notable increase in selling across the market as investors look to raise funds. With the shares now trading ex-entitlement, there have also been some shareholders electing to sell their equivalent entitlement, with the plan to buy them back at $2.05. 

The Genesis offer opens on Wednesday (4 March). Applications are made online, through the www.shareoffer.co.nz/genesis website. 

_ _ _ _ _ _ _ _ _ _ _ _

THE influx of recent capital raisings may have led to one detail escaping shareholder notice.  

Santana Minerals has previously announced its intention to raise $30 million by way of a Share Purchase Plan, at a price of 90 Australian cents. Existing shareholders can apply for up to $24,948 AUD worth of additional shares. 

The announcement included the following paragraph: 

When determining the amount (if any) by which to scale back an application, Santana may take into account a number of factors, including any gaming by Eligible Shareholders . . .  [and] the extent to which Eligible Shareholders have sold or bought additional Shares after the Record Date.

While gaming is left undefined, those shareholders considering a partial sale of their shares above 90 cents AUD to fund the take up of those rights should be aware that this action may jeopardise their application. 

Unless extended, the Share Purchase Plan closes on 13 March. Applications are made through https://santana.capitalraisings.com. The online form requires a Validation Number, which was e-mailed to shareholders on Friday 27 February.

_ _ _ _ _ _ _ _ _ _ _

ANOTHER new listing is coming to the NZX, as Taiko Critical Minerals plans to join the board this Thursday (5 March).  

Taiko, named after the petrel endemic to the area, intends to construct and operate a mine in Barrytown on the West Coast. The companys focus will be on mining and processing ilmenite, garnet and zircon. The company plans to develop both the mine and a separation plant, before exporting from Lyttleton and Timaru. 

Ilmenite is used to make titanium and titanium dioxide. It is used across many industries, including aircraft engines, artificial joints, golf clubs and as a pigment in products ranging from paint and sunscreen to food colouring 

Garnet is used in the manufacturing of waterjets, while zircon is primarily used in the ceramics industry. 

To give some context as to the scale of this operation, the independent economic assessment report estimates Taiko will create 137 jobs at an average of around $116,000 per job, produce $63 million per year in export earnings, and contribute around $1.5 million per year in the form of royalties. 

The project will have a significant impact on the local community. The Barrytown statistical area encompasses around 1,000 people, with a median income below the national average. 

At the reference price applied, the company will begin with a market capitalisation of around $45 million, although the first trade on Thursday will determine the markets perception of its value. 

The company has a number of shareholders already, and the listing will provide some liquidity for this cohort. Most of its shareholders are registered in Australia, with perhaps a third registered to New Zealand addresses. As the company raises capital throughout its development, this number will no doubt evolve. 

Local community engagement has already occurred and remains ongoing, with the company accepting some limitations on its operations in response to this. This includes limiting truck movements – to avoid drop-off and pick-up times for the local school, and agreeing to mine only during daytime hours. 

The company has applied under the Fast Track process for resource consent. This also remains ongoing. Local iwi have already expressed support for the project. 

Taiko will mark the fifth mining company to list on our exchange in recent years, alongside Rua Gold, Santana, Manuka and Minerals Exploration. While these projects have some time before hitting full production, the NZX should be pleased that after a decade of relatively few new listings, a growing number of companies are choosing to list on our exchange.

_ _ _ _ _ _ _ _ _ _ _ _ 

Contact Energy Retail Share Offer

Contact Energys $75 million retail offer is open and closes on Friday 6 March.  Existing, New Zealand-based shareholders can apply for up to $100,000 worth of new shares, at a price of $8.75 per share. The pro-rata allocation is approximately 6%.

Applications are made online, through the website: www.contactshareoffer.co.nz. Payment is made via Direct Debit. Applicants will require their Validation Number to complete the online form – this number was sent to shareholders by the share registry last week.

Genesis Energy Rights Share Offer

Genesis Energys $300 million rights issue opens on 4 March. This offer has been priced at $2.05.

The Crown has already confirmed it will participate in the raise.

Shareholders on the register as at the close of business 26 February will be entitled to buy 1 new share for every 7.9 held. Applications must be made online through the website: www.shareoffer.co.nz/genesis and only require a CSN and bank account details.

Property For Industry Bond Offer

PFI has announced an offer of 6.5-year senior secured fixed rate bonds.

More details are expected later this week.

At this stage, given current market conditions, we are expecting it to offer a coupon of around 5.00%. 

If you would like to register your interest in this offer, pending further information, please contact us with the amount you wish to invest and the CSN you wish to use.

_ _  _  _ _ _ _ _ _

Travel 

9 March - Whanganui - David Colman

10 March - New Plymouth - David Colman

11 March - Palmerston North - David Colman

12 March – Nelson – Edward Lee

13 March – Lower Hutt – Fraser Hunter

Chris Lee & Partners Ltd