Sam Arcand, Mint Asset Management investment analyst does the numbers on how proposed US tariffs could impact the largest NZ listed companies…
The Trump administration’s tariff strategy is a hot topic in the investment world. At Mint, we’ve had our fair of discussions. To help you make sense of the nonsense, in this article, I provide a framework of tariff exposure for every NZX50 company.
I define three broad categories of exposure and bucket each NZX50 company into one, as below:
Tariff Exposure Categories – Definitions
| Categories | Definition |
|---|---|
| Category 1: Directly Exposed | Companies which released an update on tariffs to the NZX commenting on their exposure. Here the analysis focuses on estimates earnings exposure assuming the company fully absorbed the margin hit, while holding volumes steady1. |
| Category 2: Economic Activity Proxies | Companies with earnings that have a high level of exposure to the level of broad economic activity, particularly internationally.
NB: in this article, I only provide (naïve) estimates of direct tariff exposure, so have not quantified company exposures in this category. |
| Category 3: Second Order Impact | Companies for whom the exposure is most indirect and where there may be complex and/or offsetting crosswinds on the company’s earnings.
Earnings exposure for these companies is not quantified for the same reason as for the category above. |
Category 1 Companies: ~24% of NZX50 earnings2
| Company | Company statement(s) | Analysis | Risk rating |
|---|---|---|---|
| Kathmandu (KMD) | “Two of the group’s brands have significant operations in the US. Rip Curl US accounts for approximately 12%, and Oboz US approximately 7% of the group’s annual sales. Our Oboz and Rip Curl product is currently manufactured across Asia” | Approximately 20% of the company’s sales (not earnings) are affected by the current tariffs. The tariff-driven COGS increase could range from 84% (China) to 24% (Malaysia). KMD operates in the competitive discretionary retail sector, making it unclear how much of the tariff cost can be passed on without affecting demand. Because KMD is on the cusp of profitability, the % impact on the dollar earnings figure is artificially exaggerated. Approached another way, the earnings impact could be in the ballpark of ~3% of sales – very material for a retail business3. | High |
| Skellerup (SKL) | “[SKL] generates 35% of revenue from sales in the US market. Approximately 85% of this revenue comes from products manufactured at our own and partner facilities (in equal proportions) in each of NZ, China and Vietnam4. “[D]ue to actions already taken to increase inventory held in market along with pricing and cost initiatives, we do not expect the new tariffs to have a material impact on our FY25 results… [but] the new tariffs will increase costs for future financial years” | Assuming equal impact from tariffs in place on China, Vietnam and NZ5, SKL’s earnings could be ~55% lower. SKL designs, manufactures and distributes a range of products and components for integration into other customer systems. Where these parts are difficult to substitute or make up a relatively small part of the overall cost of the end product, SKL’s ability to pass along higher costs is higher than otherwise, which could mitigate that impact. Our understanding is that SKL has the ability to shift manufacturing capacity between geographies that will enable to reduce its exposure. On that basis, our view is that the profit impact will be materially less than 55%. | Medium |
| Sandford (SAN) | “[SAN] generated $117m of revenue out of total revenue of $583m from sales into the US market in FY24.” “We have discussed the possible impact from tariffs with our key US customers. As always, the impact depends on who pays.” | If the company cannot pass on the impact of tariffs, our naive estimate is for a ~45% hit to SAN’s net profit after tax. The company has projected some confidence that it will be able to pass on these higher costs. The ultimate impact will likely come down a combination of: The elasticity of demand for SAN’s product; Any impact on volumes demand; and The relative impact of tariffs on substitute products (such as they exist) coming from other countries, and the companies supplying those substitutes willingness to absorb the margin hit. | High |
| Tourism Holdings (THL) | “Canada has confirmed the implementation of a 25% tariff on the non-Canadian and non-Mexican content of CUSMA-compliant fully assembled vehicles imported from the USA… [this] applies to RVs imported by THL from manufactures in the USA for its Canadian RV fleet.” “[THL] typically sources 100% of its Canadian RV fleet from manufacturers in the USA, which is a common practice within the Canadian RV industry for both rentals and sales. [THL]’s understanding… is that an effective tariff rate of approximately 22% will apply to the value of the vehicles”. “[THL] has taken several actions to mitigate the impact of potential tariffs on performance in calendar 2025″. [Editor’s note: these do not extend to shifting the sourcing of vehicles for its Canadian fleet in future periods].” | The buy-rent-sell model THL operates in Canada and associated accounting complexity make the tariff impact difficult to isolate. If THL maintains its current operations and pricing in Canada, the tariff impact on earnings could be around 10%. However, this scenario is more contrived than others, as THL could extend fleet lives to some extent to smooth the impact. However, the greater impact on THL will stem from changes in US tourism patterns and consumer confidence. This has already been highlighted by the company’s recent earnings guidance update stating that NPAT is expected to be “significantly below” previously expected. | High |
| Scales (SCL) | “[SCL]’s sales from exports to the US in FY24 were less than 10% of group revenue and are expected to be lower than this in FY25”. | Assuming impacted sales are a full 10% of revenue, the impact to NPAT in FY25 is ~10%. SCL’s ability to mitigate is analogous to SAN’s, albeit possibly weaker (in terms of bargaining power, not dollar impact) due to greater substitutability. | Medium |
| Fisher & Paykel Healthcare (FPH) | “[FPH] currently manufactures approximately 45% of its volume in Mexico and approximately 55% in NZ […] For the 2026 financial year, the company’s costs would likely increase due to the new tariffs”. | If NZ’s 10% tariff applies to 40% of FPH’s US-bound goods, the FY26 NPAT impact could be ~4%. Considering the company’s potential mitigations, the actual impact will likely be lower. | Medium-Low |
| Infratil (IFT) | None provided | IFT’s portfolio companies do not directly trade with the US. Longroad, a US-based wind and solar developer, has exposure to tariff-affected countries. The impact of tariffs on Longroad’s development costs (rather than earnings) is uncertain and could vary widely. Assuming 50% of development costs relate to material inputs, 80% (by value) are imported into the US from tariff-affected countries, and the weighted average tariff is 40%, then the cost of developments could be 16% higher. Our view is that the most promising mitigant is the supply-demand environment for power in the US and the consequent impact on Longroad’s ability to pass on costs into power purchase agreements (PPAs) for off-take. (Longroad is ~10% of the total IFT portfolio value, according to consensus estimates). | Low |
| Fonterra (FSF) | None provided | Our understanding is that Fonterra does export some product to the US which will be subject to tariffs, comprising a relatively small amount of sales. It is, however, a key growth area, which, under the weight of tariffs, is likely more muted. I have ranked this last in this category because of the lack of information upon which to estimate an impact. | Low |
The category two companies are presented in alphabetical order, as there is no arms-length basis for assessing potential earnings impacts. Because they are economic proxies, one rubric for thinking about their exposure is that it could be broadly similar to the impact on GDP, though highly dependent on the company.
Category 2 Companies: ~21% of NZX50 earnings
| Company | Analysis | Risk rating |
|---|---|---|
| Auckland Airport (AIA) | AIA’s earnings depend heavily on international tourism. While NZ may benefit from shifting tourist preferences, economic uncertainty will likely have a greater impact on tourism volumes. | High |
| Air New Zealand (AIR) | Contrary to AIA, AIR’s profit derives mostly from domestic travel. For AIR, may be some positive effect from substitution if NZ consumers swap international travel for more domestic travel, but it is likely to be more than offset from the loss of international travel and consumer and business confidence impacts in NZ on domestic travel volumes. AIR may receive some offsetting benefit if global international travel and overall activity levels are lower in the form of reduced COGS via fuel prices. | High |
| A2 Milk (ATM) | China is a major target of the Trump administration’s tariffs. ATM derives a material amount of its earnings from exports to China6. If tariffs impact China’s economy, ATM’s sales in the region may decline. | Medium |
| Freightways (FRW) | FRW will be impacted by any slowdown in Australasian economic activity. The extent of this impact depends on how long tariffs last and the whatever chilling effect tariffs have on global activity that flows on to ANZ. | Medium |
| Hallenstein Glasson (HLG) & The Warehouse Group (WHS) | As discretionary retailers, HLG and WHS will be impacted by any drop in consumer confidence in NZ. It is unlikely, though possible they may benefit from some improved pricing on COGS for internationally manufactured product or capacity that wants to find another home serving a non-US market due to reduced competitiveness. | Medium |
| Mainfreight (MFT) | MFT, with broader global exposure in the US and EU, faces a higher tariff impact than FRW due to its exposure to US-bound freight, volumes of which could be affected by tariffs. Potential offsets will come from the extent to which MFT is able to benefit from the increased complexity of global shipping and the short-term bullwhip effect of freight volumes stopping and starting, though this is likely to be transitory in nature. | Medium |
| Port of Tauranga (POT) | POT’s export volumes (~60% of containers in 1H25) could be impacted by lower profitability US-bound exports and reduced demand in markets like China. Import volumes (~40% of containers in 1H25) may decline with NZ economic activity, but may benefit from exchange rate or other international trade dynamics in response to tariffs. | Medium |
| SkyCity (SKC) | Similar to AIA, SKC is somewhat dependent on the level on inbound international tourism (and business travel) into NZ. | Medium |
Category 3 Companies: ~55% of NZX50 earnings
| Group | Companies | Commentary |
|---|---|---|
| Companies most pertinent to the bucket | ANZ Group, Heartland Group, Oceania Healthcare, Ryman Healthcare, Argosy Property Limited, Investore Property, Precinct Properties, Stride Property Group, Goodman Property, Kiwi Property Group, Property for Industry, Summerset Holdings | Tariffs may slow the domestic economy, potentially leading to lower interest rates in NZ. Some companies could actually benefit if that impact outweighs the broader economic slowdown. |
| Staple goods & services providers less impacted than discretionary retailers | Contact Energy, Gentrack Group, Meridian Energy, Channel Infrastructure, Genesis Energy, Spark NZ, Ebos Group, Mercury NZ, Vector | These companies provide essential services and are likely to be less affected by economic volatility or shifts in global trade dynamics. |
| Companies with unique and offsetting economic drivers | Fletcher Building, Turners Automotive, Sky Television, Tower, Serko, Vista Group | These businesses have varying exposures to the economy. Relative to Category 2, the impact on these companies should be less pronounced. |
So, what now?
While the global trade environment has clearly shifted, impacting several NZX50 companies to varying degrees, companies can be forgiven for not seeing an abrupt upending of the global trade system coming as they planned their supply chains over the last decade or two. However, higher-quality businesses are typically more resilient to shocks and have more avenues for response. It is essential to remember that the New Zealand market remains fundamentally resilient. Its relative geographic isolation and distinct economic structure often shelter it from the direct fallout experienced in larger, more interconnected markets. Moreover, many NZX50 companies benefit from diversified operations, strong balance sheets, and experienced management teams adept at navigating uncertainty.
Investors seeking stability amidst trade volatility will likely find the New Zealand market a comparative safe haven. At Mint, our strategy remains focused on identifying high-quality businesses with robust defensive characteristics and ample capacity to adapt to changing trade dynamics. We’ve insulated ourselves from some impacts by focusing on those high-quality businesses. Looking forward, we will be taking advantage of opportunities where good businesses have been underestimated in this episode, or where we think the ripple effects of tariffs are being mispriced. Ultimately, thoughtful analysis, prudent portfolio construction, and a clear framework for assessing tariff exposures will be key in successfully navigating—and even benefiting from—the effects of ongoing global trade tensions.
Sam Arcand is an Investment Analyst at Mint Asset Management Limited. The above article is intended to provide information and does not purport to give investment advice. Download a copy of the product disclosure statement here.
[1] Analysis relies on information included in the company’s statement released to the NZX.
The assumption of steady volumes is a necessary simplification for the purposes of this article. An in-depth defence of individual elasticity of demand profiles for each business or product is beyond the scope of this article.
In this article, I sometimes refer to this basic methodology for estimating the impact, the “naïve estimate”.
Also, “earnings” in this article means net profit after tax, and is based on next financial years’ FactSet consensus earnings where relevant and available. For companies without consensus earnings, the estimate is based on the last completed financial year. Where earnings are not an effective measure for considering the impact, I have outlined a thought exercise. There are only [two] instance of this – THL and IFT.
[2] 20% of this is attributable to FPH, which is relatively unaffected.
[3] Assumes 40% as a weighted average tariff on affected goods.
[4] I can’t help but note that I have not accounted for the differential margin profiles as between internal and partner manufacturing facilities in this exercise.
[5] Noting the caveat in the footnote above.
[6] Over 2/3 of its sales and >100% of its EBITDA as per the 1H25 earnings presentation.