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NZ shares down, Fletcher and Sky TV drop

NZ Newswire logoNZ Newswire 22/02/2017 Sophie Boot

New Zealand shares dropped on Wednesday, dragged lower after Fletcher Building's first half earnings disappointed, with A2 Milk and Sky Television also falling.

The S&P/NZX50 Index fell 53.2 points, or 0.7 per cent, to 7,062.47. Within the index, 32 stocks fell, 16 rose and two were unchanged. Turnover was $NZ148.7 million.

Fletcher Building, the second biggest stock by market cap, led the index lower, down 5.2 per cent to $9.68. The company posted a 2 per cent gain in first-half profit to $176 million that included unexpectedly weak earnings from its construction division, especially given its $2.7 billion backlog of work.

Earnings before interest and tax (ebit) was $294 million, from $288 million the previous year. The shares had soared 54 per cent in the past 12 months on optimism it would benefit from a boom in Auckland residential construction.

A2 Milk Co dropped 4.5 per cent to $2.33. The milk marketer's chief executive and chair have sold down their stakes, less than a week after reporting first-half profit more than tripled.

Sky Television fell 2.7 per cent to $4.35 and Spark New Zealand rose 0.6 per cent to $3.49. Spark and 2Degrees have been granted a stay on the proposed merger between rival Vodafone New Zealand and pay-TV operator Sky to consider their legal options.

If the Commerce Commission clears the merger on Thursday, it won't come into effect immediately, giving the opposing parties time to read the reasoning behind the decision and decide whether they will pursue a legal challenge.

Separately, Sky on Wednesday posted a 32 per cent drop in first-half profit to $59.3 million as content costs increased, and revenue and subscriber numbers fell. The pay-TV operator is looking to team up with telecommunications company Vodafone as it faces increased rivalry from online streaming video services such as Netflix and Spark's Lightbox.

Mercury New Zealand was the best performer, up 1.3 per cent to $3.09, and Metlifecare gained 0.9 per cent to $5.49.

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