New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

<ul><li>Air New Zealand (AIR) will report a material fall in earnings in its 1H24 result on 22 February 2024.</li><li>Management guidance is for PBT at the bottom end of its NZ$180m–NZ$230m range.</li><li>We forecast PBT of NZ$183m, down -39% against the prior year. The quality of the result will be compromised by the inclusion of ~NZ$45m of income connected to expired COVID-related credits.</li></ul>

Air New Zealand (AIR) will report a material fall in earnings in its 1H24 result on 22 February 2024.Management guidance is for PBT at the bottom end of its NZ$180m–NZ$230m range.We forecast PBT of NZ$183m, down -39% against the prior year. The quality of the result will be compromised by the inclusion of ~NZ$45m of income connected to expired COVID-related credits.

Air New Zealand - 1H24 Preview — Descending

<ul><li>The headwinds in front of Air New Zealand (AIR) are strengthening.</li><li>Management has downgraded market earnings expectations again in light of weakening demand across its domestic and trans-Tasman business.</li><li>Long-haul has been largely immune to date, but given steadily recovering market capacity we expect a weaker long-haul story to emerge over the next six to 12 months, particularly from New Zealand outbound travellers. </li></ul>

The headwinds in front of Air New Zealand (AIR) are strengthening.Management has downgraded market earnings expectations again in light of weakening demand across its domestic and trans-Tasman business.Long-haul has been largely immune to date, but given steadily recovering market capacity we expect a weaker long-haul story to emerge over the next six to 12 months, particularly from New Zealand outbound travellers. 

Air New Zealand - Lacks Pax, Downgrade to UNDERPERFORM

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Thematic (Sector/Industry)

<ul>
<li>Jet fuel price has declined in the past two months and is 20% lower than the September peak. Positive for airlines but we have yet to see any earnings upgrade   </li>
<li>All the Chines state carriers (Air China, China Eastern and China Southern) and Taiwan's EVA Airways are unhedged, benefiting the most from this lower fuel price trend </li>
<li>Worst off due to fuel hedge cover at higher than current market prices are Qantas Airways (75% hedged), Air New Zealand (54% hedged) and Japan Airlines (40% hedged)  </li>
</ul>


Jet fuel price has declined in the past two months and is 20% lower than the September peak. Positive for airlines but we have yet to see any earnings upgrade   
All the Chines state carriers (Air China, China Eastern and China Southern) and Taiwan's EVA Airways are unhedged, benefiting the most from this lower fuel price trend 
Worst off due to fuel hedge cover at higher than current market prices are Qantas Airways (75% hedged), Air New Zealand (54% hedged) and Japan Airlines (40% hedged)  


Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Auckland Intl Airport / Equity Capital Markets

<ul>
<li>Auckland City Council plans to sell 7% of <a href="https://www.smartkarma.com/entities/auckland-intl-airport-ltd" target="_blank" data-smartkarma-citation="entities:597:1" rel="noopener">Auckland Intl Airport (AIA NZ)</a>  to fund its budget requirements for 2023-24.</li>
<li>Auckland City Mayor has been talking about selling the stake since at least Dec 2022 and hence, the deal is already very well flagged.</li>
<li>In this note, we will talk about the possible placement and other deal dynamics.</li>
</ul>


Auckland City Council plans to sell 7% of Auckland Intl Airport (AIA NZ)  to fund its budget requirements for 2023-24.
Auckland City Mayor has been talking about selling the stake since at least Dec 2022 and hence, the deal is already very well flagged.
In this note, we will talk about the possible placement and other deal dynamics.


Auckland Airport Possible Placement - Will Be Very Well Flagged US$540m Block

<ul><li>Domestic transport, be it freight or passenger, is currently feeling pretty sorry for itself.</li><li>The depressed economic backdrop at home and stalled recovery of inbound air travel is weighing on the sector’s psyche and financial performance.</li><li>At this stage of the cycle, we tender to look for anything vaguely resembling a green shoot. </li></ul>

Domestic transport, be it freight or passenger, is currently feeling pretty sorry for itself.The depressed economic backdrop at home and stalled recovery of inbound air travel is weighing on the sector’s psyche and financial performance.At this stage of the cycle, we tender to look for anything vaguely resembling a green shoot. 

Transport Trends - Green Shoots Yet to Germinate

New Zealand

Air New Zealand Limited operates an airline business that provides international and domestic air passenger and cargo transport services throughout New Zealand and the South West Pacific. The Company also provides engineering and ground handling services.

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Air New Zealand (AIR NZ)

Air New Zealand - 1H24 Preview — Descending

Air New Zealand (AIR) will report a material fall in earnings in its 1H24 result on 22 February 2024. Management guidance is for PBT at the bottom...

Forsyth Barr

Air New Zealand - Lacks Pax, Downgrade to UNDERPERFORM

The headwinds in front of Air New Zealand (AIR) are strengthening. Management has downgraded market earnings expectations again in light of...

Forsyth Barr

Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....

Mohshin Aziz

Auckland Airport Possible Placement - Will Be Very Well Flagged US$540m Block

Auckland Airport just reported its full year results, this in effect frees its largest shareholder, Auckland City Council to progress with its...

Sumeet Singh

Transport Trends - Green Shoots Yet to Germinate

The depressed economic backdrop at home and stalled recovery of inbound air travel is weighing on the sector’s psyche and financial performance.

Forsyth Barr

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Air New Zealand - 1H24 Preview — Descending

Air New Zealand (AIR) will report a material fall in earnings in its 1H24 result on 22 February 2024. Management guidance is for PBT at the bottom...

Forsyth Barr

Air New Zealand - Lacks Pax, Downgrade to UNDERPERFORM

The headwinds in front of Air New Zealand (AIR) are strengthening. Management has downgraded market earnings expectations again in light of...

Forsyth Barr

Lower Fuel Price, Which Asia Pacific Airline Benefits and Suffers the Most?

​Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....

Mohshin Aziz

Auckland Airport Possible Placement - Will Be Very Well Flagged US$540m Block

Auckland Airport just reported its full year results, this in effect frees its largest shareholder, Auckland City Council to progress with its...

Sumeet Singh

Transport Trends - Green Shoots Yet to Germinate

The depressed economic backdrop at home and stalled recovery of inbound air travel is weighing on the sector’s psyche and financial performance.

Forsyth Barr

Jet fuel prices have been declining and this is good for airlines. The impact varies according to average flight length and fuel hedge exposure....