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

 

Z sees greater benefits from Chevron acquisition

Z sees greater benefits from Chevron acquisition, affirms annual guidance

By Paul McBeth

Sept. 23 (BusinessDesk) - Z Energy, the service station chain, expects greater benefits than previously forecast from its proposed acquisition of Chevron New Zealand's service stations and says it is running on schedule to integrate the business if it gets approval from the antitrust regulator. Separately, Z affirmed its annual guidance.

Wellington-based Z sees annual savings of between $25 million and $30 million from acquiring the Chevron assets, up from earlier estimates of $15 million to $25 million, it said in a statement. The company also lowered the forecast cost of acquiring the Caltex and Challenge! branded chains to $55 million from $64 million, while saying any delay in the Nov. 30 cut-over date would add an extra $2 million a month.

"It would appear to us that CNZ (Chevron New Zealand) has benefited from a strengthened operating performance during calendar 2015," chief executive Mike Bennetts said. "Accordingly, Z now expects that the financial performance of CNZ is stronger than our initial assessment at the time of announcing the proposed acquisition."

The acquisition is currently in the hands of the Commerce Commission, which is reviewing whether Z’s $785 million acquisition of the Chevron New Zealand network, giving it 49 percent of the retail market, would substantially lessen competition.

Rival Mobil Oil New Zealand has submitted the merger would concentrate fuel discount arrangements, while discount retailer Gull New Zealand was concerned over the long-term commercial contracts the enlarged group would be able to command. BP New Zealand warned competition issues would arise in more areas than claimed and recommended Z be forced to divest stations in those locations.

Z today said the process is proceeding as planned, and was confident the transaction won't substantially lessen competition. The regulator has indicated it will make a decision on Dec. 18.

Separately, the company affirmed annual replacement cost operating earnings before interest, tax, depreciation, amortisation and fair value movements to be within $245 million and $265 million. That guidance includes a one-off $24 million charge from additional Customs duties and penalties, and the timing of the Chevron cut-over date, which Z said was "effectively increasing guidance by maintaining the current range."

The shares last traded at $6.13 and have gained 32 percent this year.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Government: David McLean Appointed As KiwiRail Chair

David McLean has been appointed as Chair of KiwiRail Holdings Ltd, the Minister for State Owned Enterprises Dr David Clark and Minister of Finance Grant Robertson announced today... More>>


Dairy NZ: ‘More Milk From Fewer Cows’ Trend Continues In A Record Year
Vodafone says it has 10,000 customers using its Wi-Fi Calling service. It took less than three months to reach that milestone; the service began operating in September... More>>

Statistics: Consents Remain At Record Levels
There were 47,715 new homes consented in the year ended October 2021, up 26 percent compared with the year ended October 2020, Stats NZ said today. "The year ended October 2021 marks another record for the annual number of new homes consented,” construction statistics manager Michael Heslop said... More>>



Fonterra: Lifts Forecast Farmgate Milk Price Range And Revises Earnings Guidance At First Quarter Update

Fonterra Co-operative Group today lifted its 2021/22 forecast Farmgate Milk Price range, reported a solid start to the 2022 financial year and revised its earnings guidance... More>>


Canterbury Museum: New Research - Bald Haast's Eagle Feasted On Moa Guts

New Zealand’s extinct Haast’s Eagle (Hieraaetus moorei), the largest known eagle, gulped down viscera like a vulture and may even have been bald, new research suggests... More>>

ABC Business Sales: Demand High For Covid-proof Businesses
Despite the continuing challenges facing businesses in this Covid environment, right now there are more buyers looking for a small-medium sized business than there are sellers in the market... More>>


PriceSpy: Producer Prices Increase
New Black Friday and Covid-19 Report* released by PriceSpy says people’s fear of stepping inside physical shops during big sales events like Black Friday has risen since last year; Kiwis are still planning to shop, but more than ever will do it online this year... More>>