Latest / Best of Business / Shane Solly: Harbour Asset Management expert on the market reactions to Contact Energy's results

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Shane Solly: Harbour Asset Management expert on the market reactions to Contact Energy's results · Best of Business

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  Speaker 1: You're listening to a podcast from News Talks be follow
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  Speaker 2: Shane Soli Harbor Asset Managements with us A Shane.
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  Speaker 3: Hello.
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  Speaker 2: Ever, right, how did the market react to Contact Energy today?
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  Speaker 3: Wow? The Contact result today was pretty solid.
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  Speaker 4: They delivered a bet a billion dollars even death profit,
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  Speaker 4: which was in line with the expectations, better cost control
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  Speaker 4: off sitting with low hydra.
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  Speaker 3: They gave guidance for twenty twenty seven of just.
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  Speaker 4: Over one point zero four or five billion forty two
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  Speaker 4: cent divident and there was in line with expectations the
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  Speaker 4: underlying business humming along and I see. Theyve anounced some
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  Speaker 4: good development generation activity, including quite a chunky Tahura Stage
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  Speaker 4: two which is fifty to seventy megawats. But the big
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  Speaker 4: news today was the announcement of a deal with Infutwo
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  Speaker 4: owner into owned Camera Data Centers to develop a two
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  Speaker 4: hundred and fifty megawatt data center using context excess capacity
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  Speaker 4: from its retired TCC plum Stratford and Taranaki. It's potentially
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  Speaker 4: supported by Solon battery. So this is going to be
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  Speaker 4: a mess of new development for Taranaki. If it comes through,
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  Speaker 4: So it's pretty early stages yet we don't know all
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  Speaker 4: the finance structure. Maybe that Contact has to to put
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  Speaker 4: some equity into that development. Contact sheep price actually ended
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  Speaker 4: the day down one point two percent to eight ninety seven.
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  Speaker 4: Stock has been a bit weak heather going into this.
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  Speaker 4: A couple of things driving that. Wholesale electricity prices have
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  Speaker 4: fallen a little bit of political scrutiny and the potential
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  Speaker 4: for infratil to sell at stake and Contact down. So
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  Speaker 4: I think certainly that chunky potential data seenter development. Maybe
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  Speaker 4: the market's just grappling with that as well. That if
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  Speaker 4: Contact has to invest in that, that'll be a fair
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  Speaker 4: few dollars. So good result but not enough today.
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  Speaker 2: Now why the markup not like the WISPEC announcement.
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  Speaker 4: Yeah, yeah, so whispec. It was a quarterly update, third
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  Speaker 4: quarter update for twenty twenty six. They delivered a net
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  Speaker 4: profit result of Australia and one point eight b in,
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  Speaker 4: which is a pretty good number, quite solid lending and
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  Speaker 4: deposit numbers, strong need interest margins. The update was broadly
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  Speaker 4: alone with expectation, but unfortunately Westpac management provided quite a
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  Speaker 4: cautious outlook statement. They're talking about housing credit growth falling
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  Speaker 4: from just below seven percent to just below five percent
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  Speaker 4: for the next year, and that's off setting a strong
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  Speaker 4: business lending. And then they're also talking about the deddrous
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  Speaker 4: margins coming out of pressure in mortgage and deposit pricing.
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  Speaker 4: They noted respect Management noted that mortgage applications are down
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  Speaker 4: twenty percent since.
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  Speaker 3: The Australian government's budget in May.
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  Speaker 4: But that's when they talked about changing capital tax capital
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  Speaker 4: gains tax settings. We know what that's like in the
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  Speaker 4: zeal And. So that's seen the housing market really shows
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  Speaker 4: some signs of slide. Look of the truth also is
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  Speaker 4: banks sheer price valuations. They're pretty high. They're well above
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  Speaker 4: the average due to a lot of buying by the
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  Speaker 4: ASY super funds who have to cling on to that
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  Speaker 4: benchmark pretty closely.
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  Speaker 3: They're quite passive.
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  Speaker 4: So yeah, rolling over at earnings momentum, that was enough
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  Speaker 4: to drive the westpeac Ship RICE down five point four
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  Speaker 4: percent to day to thirty five eighty nine.
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  Speaker 3: II.
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  Speaker 4: We've got CBA out on Wednesday and aims instead order
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  Speaker 4: out on Tuesday, so we'll be looking for confirmation if
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  Speaker 4: that's slowing Trina noonings for banks.
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  Speaker 2: Interesting stuff. I look forward to that, Okay, Shane, thanks
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  Speaker 2: very much mate, we'll look to it. We'll chat to
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  Speaker 2: you again in a week's time. That Shane Solly, Harbor
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  Speaker 2: Asset Management.
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