The corporate reporting season gets underway Monday, with the market focused on how well companies have been managing costs, and the outlook for the rest of the year.
Most of the NZX’s top 50 companies will be filing financial reports covering the final six months of 2022, when the economy was still growing and many companies were benefiting from the easing of Covid-19 restrictions.
But the Reserve Bank’s forecast for a recession from the middle of the year, with rising interest rates, high inflation, a tight labour market and geopolitcal uncertainty were expected to test companies’ economic resilience.
Still, Craigs Investment Partners investment director Mark Lister said many companies were expected to deliver solid results, particularly those that benefited most from the rebound in tourism, such as Air New Zealand, SkyCity, Tourism Holdings and Auckland Airport.
Devon Funds head of retail Greg Smith said there was bound to be some interesting results.
“I think there could be some interesting subplots,” Smith said.
The market will also be looking to see whether companies’ performances justified some of the increases in share prices over the past six months, with a 15 percent increase in overall values.
However, Lister said many companies will be wary of providing any firm guidance on the outlook, given a range of uncertainties.
Smith said the outlook will be important for investors.
“The markets have got off to a pretty good start so far in 2023, and investors will be looking to see whether that’s justified.”
