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Thread: NZR

  1. #1761
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    Quote Originally Posted by bull.... View Post
    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'.

  2. #1762
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    New CEO announced. https://www.nzx.com/announcements/346980

    Can't see much changing.....

  3. #1763
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    Quote Originally Posted by Sideshow Bob View Post
    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.

  4. #1764
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    Quote Originally Posted by Rowdy Flat View Post
    She's got an impressive CV. God knows they need some new blood on board.
    Lets hope she delivers.

  5. #1765
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    Quote Originally Posted by percy View Post
    Lets hope she delivers.
    wouldnt hold your breath , company dominated with self interest
    bull
    One step ahead of the herd

  6. #1766
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    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.

  7. #1767
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    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.

  8. #1768
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    Interesting that in 2014 BP, Mobil, Z-Energy and Chevron held ~65% of the company. With Chevron exiting in 2015 and BP halving its stake in 2017 they now only have 42.6% between them.

    I understand that the generous tolling terms help ensure that the refining continues in NZ so has some justification but hope that longer term a slightly more equitable balance can be found.

  9. #1769
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    Quote Originally Posted by Waikaka View Post
    Interesting that in 2014 BP, Mobil, Z-Energy and Chevron held ~65% of the company. With Chevron exiting in 2015 and BP halving its stake in 2017 they now only have 42.6% between them.

    I understand that the generous tolling terms help ensure that the refining continues in NZ so has some justification but hope that longer term a slightly more equitable balance can be found.

    Waikaka, please look at earnings over the last 10 years and average them out. Look at the free cashflows (or lack of) and see what the CAPEX is spent on. Agree with the strategic assets but look at the income they earn. Look at what's happened to Australian refineries.

  10. #1770
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    and its a asset in its sunset years how long that maybe.
    bull
    One step ahead of the herd

  11. #1771
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    If it was truly a sunset industry in terminal decline then we would see a sustained decrease in oil consumption in NZ. Apart from a GFC related dip NZ demand is higher than ever (snip from MBIE EDF 2018). I would hazard that NZR will still be refining in 10 years.

    Attachment 10945

    Regarding earnings


    Average FCF since 2010 has been $11 million a year. Significant plant upgrades and shut downs are out of the way so I would hope the next 10 year are more profitable with more material processing more cheaply.
    If I take out the years around Te Mahi Hou (2013 & 2014) and the shutdown (2018) which happen infrequently (10 yr +) then average FCF is $76.5 million

    Large CAPEX has been spent on:
    Jet tank farm upgrade (2019-ongoing)
    Shut down (2018)
    Crude shipping project (ongoing)
    RAP upgrade (2019)
    Te Mahi Hau (2015)

    All of these projects have or aim to move more volume, more efficiently, exactly what a tolling refinery should be doing. More oil through means more money. Expensive running a refinery but they seem to do it well.

    Australian refineries are a bit different as they have multiple refiners, some consolidation of smaller refiners is happening. As we only have one refiner it is in a better position. Also note when the Australian refineries close they turn into import terminals, unlikely that NZR will stop refining but if they did, there would still be significant value in their infrastructure (port, pipeline and tank farms).

    80% of our imported refined oil comes from Singapore and South Korea. It is likely that ultimately these mega refineries will scale sufficiently to drive NZR out of the refining business but it wont happen in the medium term with the sweet deal BP, Z and Mobil.

  12. #1772
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    Quote Originally Posted by Waikaka View Post
    If it was truly a sunset industry in terminal decline then we would see a sustained decrease in oil consumption in NZ. Apart from a GFC related dip NZ demand is higher than ever (snip from MBIE EDF 2018). I would hazard that NZR will still be refining in 10 years.

    Attachment 10945

    Regarding earnings


    Average FCF since 2010 has been $11 million a year. Significant plant upgrades and shut downs are out of the way so I would hope the next 10 year are more profitable with more material processing more cheaply.
    If I take out the years around Te Mahi Hou (2013 & 2014) and the shutdown (2018) which happen infrequently (10 yr +) then average FCF is $76.5 million

    Large CAPEX has been spent on:
    Jet tank farm upgrade (2019-ongoing)
    Shut down (2018)
    Crude shipping project (ongoing)
    RAP upgrade (2019)
    Te Mahi Hau (2015)

    All of these projects have or aim to move more volume, more efficiently, exactly what a tolling refinery should be doing. More oil through means more money. Expensive running a refinery but they seem to do it well.

    Australian refineries are a bit different as they have multiple refiners, some consolidation of smaller refiners is happening. As we only have one refiner it is in a better position. Also note when the Australian refineries close they turn into import terminals, unlikely that NZR will stop refining but if they did, there would still be significant value in their infrastructure (port, pipeline and tank farms).

    80% of our imported refined oil comes from Singapore and South Korea. It is likely that ultimately these mega refineries will scale sufficiently to drive NZR out of the refining business but it wont happen in the medium term with the sweet deal BP, Z and Mobil.
    data for past oil consumption in NZ is irrelevant if your considering the future, as Z energy have presented in there modeling there will be a decline in petrol consuming moterists going forward. probably not noticable in 10yrs but who knows events like bush fires in AUStralia just speed up the call for change to green. Also as electric vehicle technology improves which it is getting cvheaper and better each year will speed up conversion to electric as well. telsla just started up big factory in china which promises to lower the cost per vehicle big time and look how that has put a sky rocket under there share price as people now realise tesla is a leader in the field.

    I do agree nzr does have good fcf but they are really just spending it all on stay in business capex to prolong the life of the refinery. moving more volume doesnt necessayry translate into more profit as it depends on the crack at the time as well as other factors. with cracks low at the moment nzr not gonna be making much boomer profits to reduce debt and pay big NZX sized divs.

    if the share price went lower i might get tempted as a punt for a massive div one day as they probably be aroung in 10yrs but who knows with how fast technology and opinion on fossil fuels is changing
    bull
    One step ahead of the herd

  13. #1773
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    I think this industry is cyclical and can benefit from external factors such as refinery issues in other countries etc. I cant remember the math but there is a sweetspot where it makes NZ based refined petro cheaper than importing on a tanker.

    Considering the expense of shipping I think NZR needs to scale up even more. I assume there is a cost benefit between importing the oil v fuel i.e. % extra cost as shipping is the same cost? Also they get some local oil from Todd?

  14. #1774
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    When will Labour / Greens join this club?

    https://en.wikipedia.org/wiki/Phase-..._fuel_vehicles

  15. #1775
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    Quote Originally Posted by mcdongle View Post
    When will Labour / Greens join this club?

    https://en.wikipedia.org/wiki/Phase-..._fuel_vehicles
    The sooner the better as I am sure the majority of public will not like that happening in the foreseeable future

  16. #1776
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    Quote Originally Posted by Waikaka View Post
    If it was truly a sunset industry in terminal decline then we would see a sustained decrease in oil consumption in NZ. Apart from a GFC related dip NZ demand is higher than ever (snip from MBIE EDF 2018). I would hazard that NZR will still be refining in 10 years.

    Attachment 10945

    Regarding earnings


    Average FCF since 2010 has been $11 million a year. Significant plant upgrades and shut downs are out of the way so I would hope the next 10 year are more profitable with more material processing more cheaply.
    If I take out the years around Te Mahi Hou (2013 & 2014) and the shutdown (2018) which happen infrequently (10 yr +) then average FCF is $76.5 million

    Large CAPEX has been spent on:
    Jet tank farm upgrade (2019-ongoing)
    Shut down (2018)
    Crude shipping project (ongoing)
    RAP upgrade (2019)
    Te Mahi Hau (2015)

    All of these projects have or aim to move more volume, more efficiently, exactly what a tolling refinery should be doing. More oil through means more money. Expensive running a refinery but they seem to do it well.

    Australian refineries are a bit different as they have multiple refiners, some consolidation of smaller refiners is happening. As we only have one refiner it is in a better position. Also note when the Australian refineries close they turn into import terminals, unlikely that NZR will stop refining but if they did, there would still be significant value in their infrastructure (port, pipeline and tank farms).

    80% of our imported refined oil comes from Singapore and South Korea. It is likely that ultimately these mega refineries will scale sufficiently to drive NZR out of the refining business but it wont happen in the medium term with the sweet deal BP, Z and Mobil.

    It's not a sunset industry, it's a growing industry. I work for the company and have done for a long time, drop a line if you wish svchieftain@gmail.com. I'm not in possession of any information that is not available to the market and it looks as though you have done some research, that said you are missing a great deal.

  17. #1777
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    caltex in aus just released there trading update yesterday and there refining margin took a big slump in Q4

    https://www.asx.com.au/asxpdf/202001...gt4nb7pmzl.pdf
    bull
    One step ahead of the herd

  18. #1778
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    just as we thought , cracks are bad.

    doesnt look good for immediate future and shares are hitting new lows but that is how it goes for a refining company. debt wont look good soon i reckon

    https://www.nzx.com/announcements/347355
    bull
    One step ahead of the herd

  19. #1779
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    its the time to catch the knife?

  20. #1780
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    Quote Originally Posted by Justin View Post
    its the time to catch the knife?
    you gotta ask yourself DO I FEEL LUCKY
    bull
    One step ahead of the herd

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