Revenue climbed for Z Energy’s year to March from $2.52 billion to $3.87 billion while statutory after-tax profit rose almost 280%, from $64 million to $243 million. Term debt was down by $117 million.
Z Energy bought Caltex’ assets for $785 million and in order to gain Commerce Commission approval, Z Energy had since divested 19 retail sites and one truck stop, leaving it with a 49% share of the retail transport fuel market.
Z Energy chief executive Mike Bennetts said the result included $17 million found from efficiencies in combining the two companies.
"We’re confident we will deliver approximately $40 million of total synergy by the end of this financial year," Mr Bennetts said.
Forsyth Barr broker Lyn Howe said Z Energy delivered a "strong outperformance" at the operational level.
"All of the outperformance has come from a higher margin on fuels sales," she said.
The fuels gross margin of $676 million, after hedging adjustments, was up more than $23 million than Forsyth Barr’s forecast.
All fuel types combined saw a rise from 2.36 billion litres a year ago to 3.9 billion litres.
Z Energy posted a 29.3c dividend for the full year, up 10% and in line with guidance and Forsyth Barr’s forecast, Mrs Howe said.
Because movements in the crude oil price can significantly impact the value of inventory under historic cost reporting, Z Energy believed results prepared on a replacement cost basis provided a better view of its underlying performance.
Replacement cost operating earnings before interest, tax, depreciation, amortisation and financial instruments (ebitdaf), excluding one-off expenses of the Caltex purchase, increased 59% to $419 million.
Replacement cost after-tax profit rose 18%, or by $27 million, to $176 million.
Mr Bennetts said the increase was principally due to earnings from the inclusion of a 10-month contribution from the Caltex business.
He said Z Energy was forecasting replacement cost ebitdaf of between $445 million to $475 million and capital expenditure up to $90million for the 2018 financial year; for both the enterprise resource planning and card replacement projects.
"Full year 2017 has been a big year for our business in which we have taken a lot of ground," Mr Bennetts said.
Net debt, debt less cash, was up from $354 million a year ago to $986 million as at March, with cash on hand down from $76 million to $9 million.
Term debt, which excluded working capital borrowings, was $1.11 billion following the Caltex acquisition, but by the end of the year was down by $117 million to $995 million.
Mrs Howe said the net debt of $986 million was about $20 million lower than her forecast.
"Z Energy continues to make good progress reducing debt levels," she said.
