Investors will be on the lookout for how rising inflation and interest rates are affecting the country's biggest businesses as the mini-corporate earnings season gets under way.
More than 25 firms are expected to report their full year and interim financial results over the next fortnight. Photo: RNZ / Rebekah Parsons-King
More than 25 firms are expected to report their full year and interim financial results over the next fortnight, including big names such as logisitcs firm Mainfreight, the infrastructure investor Infratil, and a handful of property investors and retirement village operators.
Forsyth Barr analysts said in a recent research note that rising interest rates, cost inflation, and the lingering effects of the pandemic would be the key themes this earnings season, especially with regard to the aged care and property sectors.
"FY22 results may be the last of easy years for the [property] sector with the sharp upward move in interest rates over the last 12 months likely to weigh on debt costs and asset values in FY23," they said.
"As such, we expect some caution in FY23 guidance with pressure from higher interest costs partially offsetting still solid top line growth."
McEwen & Associates analyst and founder of stock tipping app StockFox David Mcewen said he did not expect to see the effects of rising inflation and high commodity prices at the beginning of this year in the results.
He said the damage would be reflected in their accounts for the current financial and all companies would be affected by higher interest rates and and labour cost.
"It becomes a matter then of which companies are best able to pass on those costs."
"I would think that any companies in food or retail would be well-placed," he said.
"The tricky part is companies that might be in a situation where they are either facing a lot of competition or lower demand, and they aren't able to put their prices up as much as they would like to.
"The key thing I will be looking out for is which companies are able to maintain their margins."
The first company to report its results this week is power generator Manawa Energy, formerly known as Trustpower.