CHI - Channel Infrastructure Ltd (NZR)

[SailorRob]

And it's still massively overvalued. Through immense effort and taking huge risk they manage to make on average 30 mil net profit a year over the last 10 years. All this company deserves as a multiple is 10, so based on earnings the company should have a market cap around 300 mil. Less than half what it does now. Solar farm will be a massive disaster, uneconomical and will go way over budget. The pipeline is the cream dragged down by the rest of the business. The pipeline the deep water port and tank farm and land are great long term assets which may be able to earn good profit in the future. Right now CAPEX is the killer and it ain't going away.

As others have said - massive difference between normal shareholders and the shareholders that use the refinery.

[bull....]

this may not be good for nz refining earnings. refining margin must be bad

from z statement today

The contractual arrangements that Z has with the New Zealand Refining Company (NZX: NZR) means we havea ‘floor’ in the processing fee that we pay to the refining company. Third party forecasts regularly provided toZ estimate that during 4QFY20 refining margins will drop below the ‘floor’ level and may require Z to ‘top up’the refining company

[bull....]

the debt matrix might blow out on bad refining margins making borrowing for those solar projects etc unattractive due to borrowings

[SailorRob]

the debt matrix might blow out on bad refining margins making borrowing for those solar projects etc unattractive due to borrowings

More unattractive you mean?

I think the solar farm is some type of separate entity - as far as the debt is concerned anyway.

The crude shipping sanctions are killing the margin at the moment.

'The margin is calculated as the typical market value of all the products produced, minus the typical market value of all feedstockprocessed. The typical market value of products is determined by using quoted prices for the products in Singapore plus the typicalfreight cost to New Zealand plus product quality premia. The typical value of feedstock is determined by using the market value forcrude oil and other feedstock at the point of purchase, plus the typical cost of freight to New Zealand'.

[Sideshow Bob]

New CEO announced. https://www.nzx.com/announcements/346980

Can't see much changing.....

[Rowdy Flat]

New CEO announced. https://www.nzx.com/announcements/346980

Can't see much changing.....

She's got an impressive CV. God knows they need some new blood on board.

[percy]

She's got an impressive CV. God knows they need some new blood on board.

Lets hope she delivers.

[bull....]

Lets hope she delivers.

wouldnt hold your breath , company dominated with self interest

[Waikaka]

Long time lurker first time poster. NZR is on my buy list at the moment.

Pro: long history of dividend payments, stable demand for product, decent discount between price and book value. Significant moat to any competitors. Tank farm, port land and RAP all great irreplaceable assets.

Cons: Leverage is too high, cornerstone shareholders with vested interests, long history of short term CEO's, recent greenwashing ie solar farm.

With a market cap of ~$560 million for a 120kbpd refinery and pipeline etc happy to hold my nose and pick this one out of the gutter.

[macduffy]

Welcome, Waikaka and good luck with NZR. I'm a holder but well aware that the company is run, first and foremost for the major, not just cornerstone, oil company shareholders. Yes, there's been some good dividends in the past, but also some lean years. Not my favourite company but not an absolute dog, IMO.