Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Z sales slide on margin push, operating earnings gain 13%

Z Energy sales slide on margin push, operating earnings up 13%

May 3 (BusinessDesk) - Z Energy's second full year of operation since its sale to local investors by Shell has produced a 13.1 percent lift in operating earnings, although sales have fallen as the transport fuels distributor cut out loss-making contracts and faced severe competition on petrol station forecourts.

Earnings before interest, tax, depreciation, amortisation and changes in the value of financial instruments came in at $195 million in the year to March 31. That was up from $172 million the previous year, despite a five percent slide in the total volume of sales to 2.524 million litres of petrol, diesel, aviation fuel and other products.

Z's truncated disclosure documents, posted with the NZX this morning, do not include a total revenue figure for the year, but show retail petrol sales were down 9 percent to $867 million and commercial diesel sales were off 14 percent to $562 million.

The latter fall reflected a "conscious decision" either to reprice or remove uneconomic commercial accounts.

Z is preparing for a possible sharemarket listing this year and appointed lead advisers for a float earlier this week, as its 50/50 owners, the New Zealand Superannuation Fund and Infratil, seek to reduce their exposure to the business and, in Infratil's case, to accumulate funds for other investments and debt restructuring.

Its outlook for the year ahead is stable, with operating costs forecast to be down to between $260 million and $270 million from $280 million in the year just past, and a range for EBITDAF of $185 million to $200 million, unchanged from the guidance for the last financial year.

Capital expenditure is forecast to rise from $71 million this year to between $70 million and $90 million, in addition to some $20 million of unexpended capex carried forward from last year to the current year.

The company says operating costs were higher in the last year because of an $11 million increase in retailer commissions and $4.5 million of Christchurch earthquake-related repairs, which were expensed to the balance sheet.

Rebranded Z outlets showed a 9 percent increase in store sales, compared with a decline in those outlets still operating under a format unchanged since Shell's ownership, with a jump in store-only sales, in line with strategic intentions.

A sale and leaseback programme for its retail sites realised a net $82 million during the year to give a yield of approximately 7.6 percent.

The profit presentation papers also show a $12 million impairment has been booked against the company's 17 percent shareholding in the Marsden Point oil refinery, and is projecting a US$7 per barrel refining margin, down from US$7.40 in the year just ended.

However, chief executive Mike Bennetts signalled improving margins from its crude and refined product supply chain.

"We expect new international procurement contracts for refined fuel and crude oil negotiated by Z over the last 12 months to deliver substantial for the company.

"With moves by Port of Tauranga to dredge to enable larger vessels, Z is positioning itself to use larger and most-effective import vessels to deliver Z's finished fuel products, which should also represent significant cost savings", with Z also reorienting to North Asian refineries.

The company is also advancing investment in 40 million litres of new storage capacity at Tauranga and the Port of Lyttelton.

"Ensuring the capital cost of terminal operations is captured in commercial contracts is also already sending important investment signals and enabling much needed reinvestment in the country's fuel infrastructure," Bennetts said.

The company is budgeting a $20 million dividend payment to its two shareholders and faces emissions trading scheme costs of $40 million.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Alex Swney Pleads Guilty To $2.5M Fraud Charge

Alex Swney, former chief executive of the Auckland city centre business association Heart of the City, has pleaded guilty to dishonestly using documents to obtain $2.5 million. More>>

ALSO:

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news