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.

Thematic (Sector/Industry)

<ul><li>Abnormal gains in international freight are unwinding rapidly, particularly for seafreight, with global spot indices now down ~80% from their peaks but still above pre-pandemic levels</li><li>Air cargo's rates compression has been slower, mirroring the slow recovery in air seat capacity</li><li>In this normalising, yet far from normal environment, Freightways (FRE; OUTPERFORM) and Mainfreight (MFT; OUTPERFORM) remain our preferred exposures in the sector</li></ul>

Abnormal gains in international freight are unwinding rapidly, particularly for seafreight, with global spot indices now down ~80% from their peaks but still above pre-pandemic levelsAir cargo's rates compression has been slower, mirroring the slow recovery in air seat capacityIn this normalising, yet far from normal environment, Freightways (FRE; OUTPERFORM) and Mainfreight (MFT; OUTPERFORM) remain our preferred exposures in the sector

Transport Trends: Nothing Normal About the Normalising

Equity Bottom-Up

<ul><li>Air New Zealand (AIR) has materially upgraded its 1H23 earnings guidance as (1) passenger demand remains strong, thereby boosting yields on constrained capacity, and (2) easing fuel price pressures</li><li>Passenger yields and RASK (revenue per available seat km) remain significantly higher than pre-pandemic, given the slower recovery in supply compared to buoyant demand.</li><li>As capacity returns we expect yields to fall but this is more likely to feature in FY24 than dampen the earnings recovery in 2H23</li></ul>

Air New Zealand (AIR) has materially upgraded its 1H23 earnings guidance as (1) passenger demand remains strong, thereby boosting yields on constrained capacity, and (2) easing fuel price pressuresPassenger yields and RASK (revenue per available seat km) remain significantly higher than pre-pandemic, given the slower recovery in supply compared to buoyant demand.As capacity returns we expect yields to fall but this is more likely to feature in FY24 than dampen the earnings recovery in 2H23

Air New Zealand: Yields Cruising at High Altitude

<ul><li>Air New Zealand (AIR) has upgraded its 1H23 earnings guidance.</li><li>Its new PBT range of NZ$295m-NZ$325m compares to its previous range of NZ$200m-NZ$275m.</li><li>Lower fuel costs account for ~NZ$20m of the upgrade with the remainder reflecting continued strong demand, with AIR benefiting from reduced industry capacity and a super-strong yield environment.</li></ul>

Air New Zealand (AIR) has upgraded its 1H23 earnings guidance.Its new PBT range of NZ$295m-NZ$325m compares to its previous range of NZ$200m-NZ$275m.Lower fuel costs account for ~NZ$20m of the upgrade with the remainder reflecting continued strong demand, with AIR benefiting from reduced industry capacity and a super-strong yield environment.

<ul><li>Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats suggest revenue is back to FY19 levels</li><li>With October benefiting from school holidays, the first international shoulder season commencing since COVID-19 emerged, further capacity returning, and continued strong yields we expect monthly revenue in excess of 2019 levels.</li><li>AIR’s recent first time 1H23 earnings guidance (PBT of NZ$200m-NZ$275m) resulted in a significant upgrade in FY23 consensus</li></ul>

Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats suggest revenue is back to FY19 levelsWith October benefiting from school holidays, the first international shoulder season commencing since COVID-19 emerged, further capacity returning, and continued strong yields we expect monthly revenue in excess of 2019 levels.AIR’s recent first time 1H23 earnings guidance (PBT of NZ$200m-NZ$275m) resulted in a significant upgrade in FY23 consensus

Air New Zealand: Revenue Back at 2019 Levels

<ul><li>Air New Zealand (AIR) has had a phenomenal start to FY23, with elevated passenger yields and strong forward bookings accelerating its return to above average levels of profitability</li><li>Management cautions against extrapolating its first half earnings guidance into the whole of FY23 as yields are likely to fall as industry capacity returns</li><li>In light of the very dynamic nature of AIR's current performance, ​its upcoming monthly operating stats will provide critical insights into its 1H23 revenue generation</li></ul>

Air New Zealand (AIR) has had a phenomenal start to FY23, with elevated passenger yields and strong forward bookings accelerating its return to above average levels of profitabilityManagement cautions against extrapolating its first half earnings guidance into the whole of FY23 as yields are likely to fall as industry capacity returnsIn light of the very dynamic nature of AIR's current performance, ​its upcoming monthly operating stats will provide critical insights into its 1H23 revenue generation

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)

Transport Trends: Nothing Normal About the Normalising

The industry is normalising, but from different angles and at a different rates: Abnormal gains in international freight are unwinding rapidly,...

Forsyth Barr

Air New Zealand: Yields Cruising at High Altitude

Air New Zealand (AIR) has materially upgraded its 1H23 earnings guidance as (1) passenger demand remains strong, thereby boosting yields on...

Forsyth Barr

Air New Zealand: Guidance Upgrade

Air New Zealand (AIR) has upgraded its 1H23 earnings guidance with its new PBT range of NZ$295m-NZ$325m compares to its previous range of NZ$200m...

Forsyth Barr

Air New Zealand: Revenue Back at 2019 Levels

Air New Zealand’s (AIR) latest monthly passenger (pax) operating stats suggest revenue is back to FY19 levels; our estimate (~NZ$439m) of its...

Forsyth Barr

Air New Zealand: Yielding Better Revenue

Air New Zealand (AIR) has had a phenomenal start to FY23, with elevated passenger yields and strong forward bookings accelerating its return to...

Forsyth Barr

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