MIDDAY UPDATE: Building activity jumps, Fonterra eyes plant

Dec. 5 (BusinessDesk) - The volume of building activity recorded its biggest gain in 10 years in the third quarter, led by construction work in Canterbury and the upper North Island.

Building activity rose 9.6 percent in the third quarter and was valued at $2.9 billion in unadjusted terms, according to Statistics New Zealand. Residential building work made up 56 percent of the total.

“While the earthquake rebuild in Canterbury contributed to this, residential building work in the upper North Island also experienced growth,” industry and labour statistics manager Blair Cardno said.

For residential building activity, Canterbury and the upper North Island, dominated by Auckland, were the main drivers of a 7.1 percent gain, following a 7.5 percent gain in the second quarter. The unadjusted value of residential building work jumped 20.1 percent from a year earlier to $1.6 billion in the latest quarter.

Non-residential building activity rose 12.4 percent in the third quarter, following a 4.5 percent decline three months earlier. The value of non-residential work rose 11 percent from a year earlier to $1.3 billion.

Postie Plus warns of further potential breaches of banking covenants

Postie Plus Group, the retailer forced to renegotiate terms of its loans with Bank of New Zealand in October, says it has identified further potential covenant breaches and will be back in talks with its lender.

“Although it is not clear to PPGL whether breaches will in fact occur, the company will advise the BNZ and discuss the bank’s requirements for the relevant periods,” the Christchurch-based company said in a statement. The potential breaches are for the months of November as well as January and April next year, it said.

According to the company’s latest annual report, Postie Plus had secured bank loans of about $9.76 million as at Aug. 5 at an average interest rate of 5.15 percent. Notes to the accounts show the company didn’t meet its interest to ebit ratio covenant of 1.5 times for the rolling 12 months to April 2012 though it was in compliance with proprietorship and liquidity covenants.

Postie Plus got a waiver in May of this year but the bank at that time reserved its rights pending an expected return to compliance.

Contact sells mothballed New Plymouth power station for $24 mln

Contact Energy has sold its mothballed New Plymouth power station for $24 million to Port of Taranaki and Methanex New Zealand.

The deal will see the council-owned port buy the majority of the site for $15.5 million, and Methanex a smaller chunk for $8.5 million, the Wellington-based energy company said in a statement. The agreement with the port gives Contact rights to repurchase part of the site if the power company wants to develop it for future power generation or gas infrastructure, and stops rivals from doing the same.

The Methanex deal includes the area underneath methanol tanks the methanol producer currently owns.

“The two separate agreements represent a good commercial outcome for Contact both in terms of price and the option to repurchase part of the site should we need it,” chief executive Dennis Barnes said. “We received a number of bids, of which the two separate offers from Port of Taranaki and Methanex New Zealand were the most compelling.”

Hallenstein says sales rose 7% in first 4 months of year, profit ahead of 2012

Hallenstein Glasson Holdings, the clothing chain, said sales in the first four months of the year are up 7 percent and profit is ahead of the same period last year.

“While this is a good start, the success of the first half of our financial year hinges on our December trade,” chairman Warren Bell told shareholders at their annual meeting today. “We are well positioned and will make every endeavour to ensure we enjoy strong trade over this all-important trading period.

In September, the Auckland-based company posted a 15 percent to $21 million, exceeding its own guidance.

Fonterra seeks consent to build ‘Darfield-sized’ milk powder plant at Pahiatua site

Fonterra Cooperative Group, the world's biggest exporter of dairy products, is seeking consents to build a new milk powder plant at Pahiatua, more than doubling output from the site and mopping up surplus milk in the lower North Island.

The third drier at Pahiatua would process 2.5 million litres of milk a day, making it a similar size to its new 2.2 million litre-a-day plant at Darfield in Canterbury. The two existing driers at Pahiatua process 1.4 million litres a day, forcing Fonterra to send a further 1.6 million litres by rail to its Whareroa plant.

"While most of the growth in dairy is coming from the South Island we are still seeing some growth in the North Island and we want to be able to process extra milk in a way that enables the most value to our farmers," said Fonterra's director of NZ operations, Brent Taylor.

(BusinessDesk)

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