I'm in cd donalds camp 5 - 7 total margin includes nzr uplift
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looking good.., breakout
Expect flurry of trading over next few days, 18th being the last day before NZX 50 index changes take affect.
Plus the throughput/margin report should be out anytime now.
https://nzx.com/companies/NZR/announcements/270233
All time-record throughput of 7.52ml barrels and Margin USD 7.66 per barrel. Excellent result :t_up:
At 1.03 billion, based solely on PE ratio valuation (conservative 15), they need an NPAT of 68 million to support there valuation.
From last report they easily made that in the last 6 months, and with increased throughput and a good margin, surely this is undervalued based solely on earnings?
Processing fee effectively maintained at $9 per barrel, as NZR 'spent' 2.3m of the $7.8m ceiling-and-floor reserve. Still 5.3m in reserve.
Good chance then that NZR will be dancing on the ceiling (have a close look at pp 1-2), with an effective PF for the whole year of $9 per barrel or pretty close to it.
Gearing should be down to 20-25% by year's end, allowing NZR to pay a div of 40-60% of earnings, in line with their policy.
If they 'only' choose 40%, that means a 15cps final div. 25c if they go for 60%, and 20c with a 50% payout.
Many variables next year, but if Te Mahi Hou is successful, it will add $.9-$1.1 per barrel to the 'uplift', and 3m extra barrels a year processed.
NZR have other uplift initiatives planned from 2015-2018 which could add another 60-80c per barrel uplift.
Figures given below show an estimate of results for 2016 with PF = $9 and ER = .66 (currently .635).
Te Mahi Hou implementation failure is a current risk.
Figures all sourced from NZR.
15 e 16 e MBPD 4 0.117 0.125 PF $USD 9 9 ER 0.68 0.66 Op. days/yr 347 347 Scale factor 0.7 0.7 RefiningRev 374.9 413.5 Pipeline etc 63.0 64.3 Total rev 438 477.8 Income 438 478 exp 3 225 229.5 int 2 1.5 10.6 EBT 211 238 tax 59 67 NPAT 4 152 171 eps after tax 0.486 0.547 eps before tax 0.676 0.759 div payout % 5 40% 75% net div cps 0.195 0.410 ret. Earns 91.3 42.8 bank debt 198.0 106.7 Gearing 21% 11% Gross yield 8% 17%
NOTES
1) 'Matrix' https://www.nzx.com/files/attachments/218917.pdf p21 confirms 147 NPAT and 198m borrowings, with $9cap PF and ER .65
2) 252m assumed at 5%, being 269 at 30/6/15, and 191 at year end, averaged less 0.5m saving from platinum lease back arrangement
3) Exp per h115 report
4) Agrees with matrix estimate of 147 - H2 ER .65; PF 9
5) See note, matrix h12015, "..we are conscious that year-end borrowings have pushed gearing to 33% when our targeted ratio, outlined in the Company’s dividend policy, is 10-20%, and that further investment is required to successfully complete TMH."
Dividend policy (NZR website)
During periods leading up to and including major capital expenditure the dividend pay-out expressed as a percentage of NPAT will be in the 40-60% range unless otherwise advised by the Directors.
During periods of modest capital expenditure and optimum debt levels, the dividend pay-out percentage will be above 60% unless otherwise advised by the Directors.
looks like we are "well positioned";) ... or is this assessment only for banks and retirement homes appropriate? Anyway - result is not too bad for a predicted "weaker" 2nd half (as per analyst presentation).
Discl: happy holder :t_up:
We're very well positioned on this one, I reckon $4 by Christmas..