CHI - Channel Infrastructure Ltd (NZR)

[SailorRob]

100% guaranteed? Care to make a little wager? SailorRob and Bull, lets just wait and see say in a year or two.
Just joking about the wager but I'll remember these comments

No wish to make a little wager.

Very interested in a large wager.

Waiting to hear from you, svchieftain@gmail.com.

Cheers.

[Sideshow Bob]

Refining NZ announces non-cash impairment

4/8/2020, 8:30 amMKTUPDTERefining NZ today announced that it expects to recognise a non-cash impairment charge in the order of $220 million before tax ($158 million after tax) in the 2020 half-year results.
The impairment charge is primarily due to revised refining margin assumptions, reflecting the excess refining capacity in the Asia-Pacific region and the effects of the COVID-19 pandemic on transport fuel demand, particularly jet demand. Refining NZ sets its long-term refining margin assumptions based on independent energy analyst forecasts.
The company remains comfortably within the 45% senior debt gearing covenant under its Facility Agreements at 27% following the impairment, which will also not impact on interest cover ratios that the company continues to meet in the current low margin fee floor environment.
The impairment charge is a non-cash item and is subject to finalisation and Board approval of the half-year financial statements.
Refining NZ will release its 2020 half-year results on 17 August 2020.
Ends.

[SailorRob]

Refining NZ announces non-cash impairment

4/8/2020, 8:30 amMKTUPDTERefining NZ today announced that it expects to recognise a non-cash impairment charge in the order of $220 million before tax ($158 million after tax) in the 2020 half-year results.
The impairment charge is primarily due to revised refining margin assumptions, reflecting the excess refining capacity in the Asia-Pacific region and the effects of the COVID-19 pandemic on transport fuel demand, particularly jet demand. Refining NZ sets its long-term refining margin assumptions based on independent energy analyst forecasts.
The company remains comfortably within the 45% senior debt gearing covenant under its Facility Agreements at 27% following the impairment, which will also not impact on interest cover ratios that the company continues to meet in the current low margin fee floor environment.
The impairment charge is a non-cash item and is subject to finalisation and Board approval of the half-year financial statements.
Refining NZ will release its 2020 half-year results on 17 August 2020.
Ends.

This impairment charge is primarily due to.... massive and sustained miss allocations of capital, reflecting that over the last 12 years 93% of cash flows generated have gone right back into the plant where they have quickly been vaporised.

Non cash?? It is VERY REAL cash. Non cash in this accounting period perhaps.

It is definitely non cash to the directors and management though that is for sure.

[Leemsip]

Nice little update

Loosing a bunch of cash, debt maturities approaching (but not here yet) and look challenging to refinance, changing the business model to become a storage area with little value add, external environment unfavourable, debt to equity ratio going to blow out, legacy costs enormous, still spending $20m capex despite trying to exit current business.

Im thinking about getting in!

[bull....]

Nice little update

Loosing a bunch of cash, debt maturities approaching (but not here yet) and look challenging to refinance, changing the business model to become a storage area with little value add, external environment unfavourable, debt to equity ratio going to blow out, legacy costs enormous, still spending $20m capex despite trying to exit current business.

Im thinking about getting in!

you forgot ..little chance of a dividend for years

[SailorRob]

Anyone have any idea why there is 30 million cash sitting on the balance sheet, freshly borrowed?

More than at any time over the last 10 years...

Also first half looks anything but cash neutral - spent 22 million on Capex from only 13 net cash generated. Difference also borrowed.

[RTM]

Anyone have any idea why there is 30 million cash sitting on the balance sheet, freshly borrowed?

More than at any time over the last 10 years...

Also first half looks anything but cash neutral - spent 22 million on Capex from only 13 net cash generated. Difference also borrowed.

Redundancy payments ?
��

[traineeinvestor]

Anyone have any idea why there is 30 million cash sitting on the balance sheet, freshly borrowed?

Directors' fees.

[Balance]

Directors' fees.

Good one! 🤣

[Scrunch]

Anyone have any idea why there is 30 million cash sitting on the balance sheet, freshly borrowed?

More than at any time over the last 10 years...

Also first half looks anything but cash neutral - spent 22 million on Capex from only 13 net cash generated. Difference also borrowed.

You sometimes get extra borrowing held as cash when companies have doubt about the ability to access the headroom in their borrowing facilities. Sometimes companies believe or have been advised their borrowing limit is a sinking lid. You therefore don't pay down debt as you won't be able to redraw. Sometimes you borrow more of the facility and hold it as cash so as to ensure that operationally it remains available. No idea whether this is the case at NZR.