New Zealand rubber and engineered products maker Skellerup Holdings has upgraded its full year profit forecast for the second time this season, telling the market it now expects a record result driven by unexpectedly strong American demand and a softer New Zealand dollar.
In a trading update to the New Zealand stock exchange this week, the company said net profit after tax for the year to 30 June 2026 would land between $64 million and $65 million, excluding one off insurance gains. That is up from its earlier guidance of $57 million to $62 million, and comfortably ahead of the $54.5 million it reported for the 2025 financial year. If the numbers hold when the audited accounts are signed off, it will be the company’s best result on record.
Investors liked what they saw. Skellerup shares jumped almost 6 percent on the day of the announcement to close at a record $6.89, and the stock is now up around 40 percent over the past twelve months, making it one of the better performing names on the local market at a time when the broader NZX50 has been drifting lower.
Chief executive Graham Leaming pointed squarely at the United States, which is Skellerup’s single biggest market. “The US market is our largest, with robust demand for our products into potable water, wastewater, dairy, footwear and marine applications in the fourth quarter,” he said. The company also credited a stronger than expected seasonal peak for dairy consumables sales in New Zealand, lower United States tariff costs in the final quarter, improved security of material supply and the tailwind from a weaker New Zealand dollar, which lifts the value of overseas earnings when they are converted back home.
That combination matters because Skellerup is an exporter. The Auckland listed company runs two divisions. Its Agri arm is one of the largest makers of food grade dairy rubberware in the world, supplying the liners, tubing and filters that sit inside milking machines, and it also owns the instantly recognisable Red Band gumboot. The Industrial division designs and manufactures engineered rubber, plastic and metal components for potable and wastewater systems, roofing, plumbing, construction and a long list of other critical uses. Much of that product is sold offshore, so when the Kiwi dollar falls and American buyers keep ordering, the benefit flows straight to the bottom line.
The upgrade caps a strong year. At the half year, reported back in February, Skellerup posted a record first half net profit of $28.9 million, up 20 percent on the same period a year earlier, on revenue of $183.5 million. At the time the company was already flagging solid demand despite the uncertainty created by United States trade policy, and this week’s update suggests the second half has been stronger still. The reference to lower tariff costs in the fourth quarter is notable given how much airtime tariffs on goods entering the United States have had over the past year. Skellerup has previously said it manufactures inside the United States as well as exporting to it, which gives it some room to move around trade barriers that have caught out other exporters.
The result stands out against a cautious mood in the wider economy. The Reserve Bank lifted the official cash rate to 2.5 percent this month, its first increase in three years, and business confidence surveys have been mixed as firms weigh higher borrowing costs against signs the recovery is finding its feet. A manufacturer quietly upgrading its profit outlook, rather than warning on it, is the kind of news the market has not had a lot of lately.
The share price reaction also underlines how narrow the leadership on the local market has become. On the day Skellerup announced its upgrade the NZX50 slipped around 0.8 percent, with more stocks falling than rising. Auckland Airport, a2 Milk, Serko and Meridian Energy were among the decliners, while Skellerup, Kiwi Property and a handful of property names bucked the trend. In a market where index gains have been hard to come by, companies delivering genuine earnings growth are being rewarded.
There are still things to watch. Guidance is not the same as an audited result, and Skellerup has been careful to strip out one off insurance gains from the number it is guiding to, which means the headline figure reflects the underlying business rather than a windfall. A weaker New Zealand dollar helps reported profit but can lift the cost of imported raw materials, and demand in the United States is only as reliable as the trade settings that sit behind it. Tariff costs came down in the fourth quarter, but trade policy has proven changeable, and a shift in either direction would feed through to a company that counts America as its largest customer.
For now, though, the direction of travel is up. Skellerup is due to release its audited full year results on 20 August, when investors will get the detail behind the guidance, including how each division performed and what the company expects to pay in dividends. On the strength of this week’s update, the market is expecting the headline number to be a record, and the reception the stock received suggests few are betting against it.
What do you make of Skellerup’s run, and can exporters keep leaning on a weak dollar and strong United States demand? Share your thoughts in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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