A full contribution from Caltex revenue has underpinned a strong first-half result for Z Energy, with revenue and profit well up on a year ago.
Revenue for Z Energy’s six months’ trading to September rose 26% to $2.08billion, earnings before interest and tax was up 10% to $174million and after-tax profit gained 57% to $105million.
A year ago, the contribution from the acquired Caltex brand was four months’ trading.
Z Energy shares were unchanged after the announcement at $7.20 but were 2.8% down on a year ago. Z Energy’s chief executive, Mike Bennetts, said while the commercial business of fuel retailing had improved in both volumes and margins, the retail side of the business was "softer". Mr Bennetts reiterated Z Energy earnings guidance of $445million to $475million for the full year.
A 10.4c dividend was declared, slightly up on a year ago.
Forsyth Barr broker Damian Foster said Z’s gross profit of $414million was $14million better than forecast, with all aspects of fuel margins, non-fuel margins and refining all contributing more than expected.
"However, operating costs were significantly higher than forecast, about $9million higher, with most of the additional cost coming from higher staff costs," he said.
Capital expenditure will be higher than previously expected, around $119million, but Mr Foster said that was expected to be offset by $26million of divestments, bringing capex back to original levels.
"Z Energy also indicated it expects to repay around $40million debt in the second half, pointing to a year-end net debt of $920million, which is important when considering its likely dividend path," Mr Foster said.
