WELLINGTON: Fuel retailer Z Energy has posted improved second-half trading to boost its full-year result.Margins were up on fuel, refining and non-fuel concession sales.
However, Z Energy’s statutory balance sheet reported a 9% decline in revenue, from $3.37billion the previous year $3.06billion for its year to March.
Statutory operating earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf) fell 60% from $208 million last year to $83million this year, while its after tax profit plunged 93%, from $95million to $7 million.
Increases in depreciation and amortisation, up 10% to $43 million, financing expenses up 48% to $37 million and other expenses up 40% at $7 million all undermined the bottom line. Z Energy will pay a 24.2c dividend for the year, up from 22c last year.Its shares were down 1c to $4.99 following the announcement.
Craigs Investment Partners broker Peter McIntyre said the underlying fuel contribution was up 6% on the the previous year, as the net margin forZ Energy increased from 18cper litre to 19.3c.
”The second-half gross refining margin rebate [from Z’s 17.14% share in New Zealand Refining] increased from $7 million to $24million,” Mr McIntyre said.
The concession stores margin rose again and the non-fuel contribution was up about $4 million, at $61 million.Guidance for the 2016 financial year was for replacement cost, operating ebitdaf of between $245 million and $265million, supported by capital investment of between $70million and $90 million, he said.
”We expected a little more from the dividend, as the current policy remains unchanged at 80% of current cost net profit after tax, which is exactly what this year’s dividend implies,” he said.
Mr McIntyre predicted a ”good outlook relative to expectations”, but the level of industry discounting since the end of the financial year ”subdues some of our enthusiasm”.
Forsyth Barr broker Suzanne Kinnaird said Z had reported a ”good result”, but not as good as expected.
Operating ebitdaf, excluding unrealised foreign exchange losses, was $243 million, about $11million lower than our forecast, but up $31 million, or 15% higher than the previous year, she said.
”The gross margin was largely in line with expectations at $537million, but operating expenses were up $9 million higher than our forecast.”
Two key areas stood out for further scrutiny: on-site expenses increased 11% to $51 million, or $4 million higher than our forecast, while administration and other expenses increased 31% to $34 million, or $6 million higher than our forecast, she said.
Ms Kinnaird said Z’s guidance for full year 2016’s operating ebitdaf, between $245 million and $265 million, was below Forsyth Barr’s $272 million forecast, so the brokerage would be pulling back its numbers, ”predominantly due to higher operating costs”.
