Analysts are picking Z Energy's first full-year financial
report will comfortably come in above its prospectus guidance
range, with after-tax profit up on the previous year.
Z Energy rebranded from Shell after being sold, Its most
recent guidance was for earnings before interest, tax,
depreciation and amortisation (Ebitda) to be in a range of
$205 million to $215 million, with Craigs Investment Partners
picking $209 million and broker Forsyth Barr predicting $213
Z Energy is scheduled to deliver its full-year report
Craigs broker Peter McIntyre said he was expecting ''better
than prospectus'' earnings from the fuel retailer, despite
the decline in its gross refining margin (its share from the
Marsden Pt refinery), and capital expenditure would keep
earnings momentum over the short term.
Mr McIntyre expects an Ebitda boost from the gross refining
margin, from New Zealand Refining, from $23 million in 2014
to $41 million in 2017.
Forsyth Barr broker Andrew Rooney said he ''fully expected Z
Energy to deliver on its promise'' and be ''comfortably
ahead''and at the top end of its prospectus guidance.
''We're not expecting Z Energy to deviate from its prospectus
guidance when it comes to the dividend, which should be 14.3c
per share and fully imputed,'' Mr Rooney said.
Mr McIntyre noted Z Energy planned to spend $30 million-$40
million, for each of the next four years, to boost Ebitda by
$40 million-$50 million, and it was positive that growth
opportunities had been identified.
''But we remain concerned that the capital expenditure
initiatives mostly just compensate for a declining organic
profit expectation,'' he said.
Mr Rooney said Z Energy's statistics showed fuel volumes had
declined during the second half, down 3%, or by 2.43 billion
However, he expected Z Energy to have continued to lift its
profit margins and its full-year profit margin for 2014 would
be 17c per litre, up 11% on 2013.
''While there is a limit to how far Z Energy can play this
game, we believe there is a little more to go in 2015, before
the company starts to use its market position to slowly gain
market share,'' he said.