October 2012

Hamilton Airport has outperformed its 2012 financial and operational expectations, announcing a 240 percent increase on last year’s net profit after tax, a 25 percent increase in EBITDA and debt reduction of $400,000 during the year. Board chair John Birch said the airport had achieved a solid result for 2011/2012 because of good planning and delivering on major projects. “The focus this year has been on containing costs, paying off debt, improving and diversifying revenue streams and maintaining customer service levels. In many of these areas we have exceeded our statement of intent targets.” He added it was unfortunate that the announcement from Virgin Australia advising it would cease operating its Brisbane route came post-balance date and overshadowed a very good annual result. “Because aeronautical revenues fluctuate, the airport has had a long-term strategy to diversify its revenue streams, with developments such as Titanium Park and long-term leases. Looking ahead to the 2012/13 financial year the income from these streams will lessen the impact of the lost international flights,” said Mr Birch. In August 2011 the airport’s joint venture property business Titanium Park sold 12 hectares of land, the entirety of the Stage One development, to internet e-commerce retailer and logistics company Torpedo7. Construction of Stage Two of Titanium Park is currently under way. Hamilton Airport chief executive Chris Doak said the improved net profit after tax of $378,000, up by $267,000 on 2011, was primarily attributed to increases in property lease revenue, cost containment and lower interest costs from a reduction in debt. He added that despite the Rugby World Cup negatively affecting Hamilton’s domestic flight numbers during September, October and November 2011, total passenger numbers were maintained at 354,000, only two per cent fewer than the previous year. Overall aircraft movements increased by 16 percent from 102,000 to […]

  New Zealand businesses need to lift their game if they want to succeed in Korea according to New Zealand Trade and Enterprise research into the perceptions of New Zealand in South Korea. “There is a pool of goodwill and trust for New Zealand in Korea,” says NZTE’s Trade Commissioner based in Seoul, Graeme Solloway. “But the latest research indicates that while New Zealand is seen as being warm and trustworthy, there is also a perception that New Zealand has stagnated in the last 10 years, and that we don’t actively seek or chase business opportunities here.” “Like many places, Korea is a complex market, with its own unique business culture, and New Zealand businesses need to take the time to understand and appreciate the way that relationships and the local business culture work here, and operate a way that resonates with Korean customers,” Mr Solloway says. The  research builds on an initial survey completed in 2008 which found that New Zealanders were perceived as being friendly but not business minded. “Overall there has been little change in the Korean perceptions of New Zealand over the past two years,” Mr Solloway says. “There is a growing perception that New Zealand businesses are ill prepared for Korea and are not stepping up to Korean business standards. If businesses can do that, there are huge opportunities here for the waiting.” The research indicates that: There is a pool of goodwill and trust for New Zealand in Korea and Koreans enjoy working and playing with New Zealanders. New Zealand businesses are seen as slow and unresponsive and Korean businesses are losing patience and have easier business options to choose from. Koreans generally have positive perceptions of New Zealand food and beverage however specific product knowledge tends to be restricted to unprocessed foods such […]

After today’s CPI figure we expect the Reserve Bank to cut the Official Cash Rate on October 25th in an effort to lower the exchange rate, the Employers and Manufacturers Association says. “The CPI figure indicates inflation has moved below the agreed target of 1-3 per cent required of the Reserve Bank leaving ample room for a cut to the OCR,” said Kim Campbell, EMA’s chief executive (left). “We need the Reserve Bank to do what it can to give exporters a break and stimulate the economy,” he said. “This is the second consecutive quarter showing annual inflation running at or below 1 per cent and the trend is still downward. “In fact there was deflation in the tradables sector over the past year to September of 1.2 per cent. “With the economy flat as a plate and with some businesses in a perilous condition, our exporters need a cut to the OCR to help spur investment but mainly to retain the cross rate advantage we have had for exports going to Australia. “Other countries around the world are cutting their interest rates where they can while those at or very close to zero are printing money through quantitative easing in an effort to support their economies. “A cut to the OCR on October 25th, the date when the Reserve Bank is due to report again, would underpin business confidence and show monetary policy works.”  

Despite a slight improvement from the previous month, New Zealand’s manufacturing sector remained stubbornly in contraction during September, according to the latest BNZ – BusinessNZ Performance of Manufacturing Index (PMI). The seasonally adjusted PMI for September was 48.2 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). While this was 0.8 points up from August, it represented the fourth consecutive month of no expansion in the sector. Over the last quarter, the PMI has averaged 48.3. BusinessNZ’s executive director for manufacturing Catherine Beard said that although the September result did not sink further than August, details behind the main result need to be outlined. “Although the employment sub index bounced back from August, the continued drop in new orders to its lowest point in more than three years may have an adverse effect on production numbers in the months ahead. When examining the comments put forward by manufacturers, the low number for new orders does not come as a great surprise given terms such as ‘lack of demand/orders’ and ‘slowness in orders’ were prevalent.” BNZ senior economist Craig Ebert said the September PMI is more likely to be temporary turbulence than tragedy. “While the data are worryingly weak-looking, they are about current conditions more than the way ahead. Talk that the industry is in crisis is overblown. Manufacturers’ expectations for output over the next three months remain positive.” Four of the five seasonally adjusted main diffusion indices were in contraction in September. While finished stocks (50.6) bucked the trend with its first level of expansion since May 2012, new orders (45.9) fell a further 2.0 points from August and experienced its lowest value since May 2009. The remaining indices improved somewhat on August. Employment (49.2) increased 3.7 points, while both production (49.9) […]

Working has to be a lot better than being on the dole. Right? Motivation, future direction and ‘career’ all come into the picture for our young people’s tomorrow. And while working they are entitled to be paid a reasonable wage for their efforts. However, the announcement this morning by Kate Wilkinson, Labour Minister that 16-19 year olds will get $10 an hour is a huge joke for the obvious reasons: throwing our youth onto a cheap labour pool and secondly providing them with greater incentives to move to Australia. It is very hard to figure out who in this government has a grip on job creation, incentives for job creation and the future of manufacturing in this country. On Friday there is a gathering, called for by the EPMU to talk about the urgency facing the jobs market. Why has this taken so long to organise? Where are the jobs going to come from? There are large numbers of young people unemployed – just look to the Waikato if you want to ask about the ‘lost generation’. They need jobs and a living wage not a special government works approach to their future. -Doug Green