ZEL - Z Energy.

[peat]

NZD down 7 % ish oil down 45% ish , Peat do you really think this company that holds itself as a “ good nz company “ is doing the right thing by us ?

its not Z's mandate 'to do the right thing', however it does try to present itself as contributing to communities and being a good NZ corporate citizen etc but one has to see this as marketing.
It is up to other companies selling fuel to keep Z honest.

I take a pretty keen interest in petrol prices and Z are a bit dearer than the Gulls and Waitomo's but they offer foredeck assistants and restrooms etc so that's not unacceptable. Still cant find a way to get value from sharetank though I do get notified via the App now when they have a 10c off day

[Beagle]

Thanks for the reminder about sharetank Peat.
If retail prices ever come down to a level commensurate with where oil is at, (not holding my breath), it might be time to load up on that system.
In the meantime its quite possibly worth noting that sales of jet fuel must be under pressure with worse to come.

[bull....]

oil is at levels seen in the GFC and yet retail petrol prices still at levels that can only be seen as rorting the consumer. z is trying hard to protect shareholders obviously by keeping prices high but it masks the fact corona will severely dent demand and z volumes will suffer greatly in time if the virus spreads in NZ.

[ananda77]

its not Z's mandate 'to do the right thing', however it does try to present itself as contributing to communities and being a good NZ corporate citizen etc but one has to see this as marketing.
It is up to other companies selling fuel to keep Z honest.

I take a pretty keen interest in petrol prices and Z are a bit dearer than the Gulls and Waitomo's but they offer foredeck assistants and restrooms etc so that's not unacceptable. Still cant find a way to get value from sharetank though I do get notified via the App now when they have a 10c off day

In the Botany area, Z is on par with Gull most of the time and I have come to like their discount schemes. We usually top up the 91 car (40 for the city runner) and stack the discounts for the 95 cars.

I like the idea of 'carbon count'. I simply can not complain about Z (apart from the bloody share price).

I tell you a little story how they deal with customers if problems arise. Bought a new car and silly me, connected the credit card to the wrong number plate. It took a few months, but eventually, someone with the correct number plate filled up on my credit card using Fastlane. Contacted Z and within 5 days, they refunded the money.

I agree, filling up the sharetank may be a tad early, but it would not be a serious mistake in the long run.

As far as crude prices concerned, it will be over in a few months (last Q in 2020) and back to normal in 2021. In the meantime, only in times like this does it make sense to accumulate crude contracts

[Beagle]

Jet fuel demand is literally going to crash with the new travel restrictions.

[macduffy]

What a crazy market!

ZEL up over 9% today!

:ohmy:

[BlackPeter]

What a crazy market!

ZEL up over 9% today!

:ohmy:

cheap oil = high margins.

[bull....]

Hey mr bennett oil just plunged 23% again tonight to lower than the GFC when petrol price going to plunge

[ananda77]

Hey mr bennett oil just plunged 23% again tonight to lower than the GFC when petrol price going to plunge

buy crude derivatives at 7 and fill up the sharetank

[Beagle]

Sharetank (max 1,000 liters) will be a very good idea after fuel prices drop right down to reflect the current price of crude. That probably won't happen for 6-8 weeks.
As usual, retail fuel prices go up like a rocket and fall down like a feather.

[ananda77]

Sharetank (max 1,000 liters) will be a very good idea after fuel prices drop right down to reflect the current price of crude. That probably won't happen for 6-8 weeks.
As usual, retail fuel prices go up like a rocket and fall down like a feather.

sounds good, but timing is a bitch

[ananda77]

Interesting that Morningstar issued a new recommendation today for Z and they keep the valuation at 8.30 and a BUY recommendation.???

[stoploss]

sounds good, but timing is a bitch

If you get the timing wrong , just continue to pay as you go . Then when the price goes back up ( if it ever does ) use up your sharetank ...
Bit like a couple of spec stocks that have become long term in my portfolio :eek2:

[Beagle]

Interesting that Morningstar issued a new recommendation today for Z and they keep the valuation at 8.30 and a BUY recommendation.???

You need to stop listening to them. Very good point stoploss about keeping sharetank liters until the price goes back up, if it ever does. Only risk is ZEL collapsing and while I am not suggesting they will, they certainly have a LOT of debt.

[ananda77]

If you get the timing wrong , just continue to pay as you go . Then when the price goes back up ( if it ever does ) use up your sharetank ...
Bit like a couple of spec stocks that have become long term in my portfolio :eek2:

Yes you right. So tonight I filled up the sharetank at 198 (95) and have a price cap now in place. In the meantime I will continue to choose the cheapest option, e.g in my situation, collect the 10c discount on 40 dollars of 91 for the run around car, and then use the discount when filling up 50ltr. of 95 for the 95 cars. In that way the 10c discount increases by up to 3 dollars per fill.

[BlackPeter]

According to the analysts is this share currently a bargain: Consensus SP is $5.27 and Buy recommendation is - well - BUY! (9.2/10). But before we get too excited - how good have the analysts been in the past in the art of predicting the future?

In February 2019 the ZEL share price peaked at $6.14. At that stage the combined mental power of 6 share market analysts forecasted that over the 12 months to February 2020 the ZEL shareprice will rise by 14% to $7.01 (consensus).

ZEL actually peaked in February 2020 at $4.65, i.e. the actual share price was 34% below the consensus and SP moved into the opposite direction from the forecast (drop instead of rise) - i.e. analyst forecast is a clear FAIL.

Looking into the consensus buy recommendation - it was in February 2019 a pretty straight "BUY" as well (9.2/10) - i.e. analysts said that the share will well outperform the NZX. NZX 50 went up by 21% and ZEL went down by 24%. Analysts got it spectacularly wrong. FAIL.

I am doing this exercise as well with other NZX listed stocks - the overview is here:
https://www.sharetrader.co.nz/showthread.php?11721-How-good-are-the-forecasts-of-stockmarket-analysts

19 stock forecasts checked so far (checking for each consensus and buy recommendation);
Consensus share price forecasts correct: 4/19; analysts hitrate: 21.1%
Consensus recommendation vs NZX50 correct: 6/19; analysts hitrate: 31.6%

Based on this performance it might be better not to trust the 'experts' with the current Buy recommendation - shall we?

[King1212]

https://www.nzherald.co.nz/best-of-business-analysis/news/article.cfm?c_id=1501241&objectid=12318391

I reconk...zel will make a killing as oil price down more than 50persen. ....all those years..they kept mourning high oil price low margin....now the tide has change....

[Gonzo]

What is the gist in this which is behind paywall https://www.nzherald.co.nz/best-of-business-analysis/news/article.cfm?c_id=1501241&objectid=12318391

[dreamcatcher]

Stuart Williams, head of equities at Nikko Asset Management. Williams said Z Energy's sell-off was “perplexing”, although he noted fuel consumption does fall during a recession.
“If you look across however deep this valley that we are in is, then that is a Great Company with an enduring proposition that presents GOOD VALUE.” he said.

Disc Hold

[Beagle]

What is the gist in this which is behind paywall https://www.nzherald.co.nz/best-of-business-analysis/news/article.cfm?c_id=1501241&objectid=12318391

There's a lot of good stuff in there. Well worth the trial price of $2.50 per week, especially with the way the world is at this point !
ZEL faces very challenging times. Just one of those challenges is 23% of volume is Jet fuel. With no international airlines flying here shortly and AIR providing only skeleton international services for freight and 70% demand reduction domestically already, and much deeper cuts to come after todays announcement by the PM...jet fuel demand is set to fall off the face of a cliff. How much fuel will people use if we end up going into lockdown ?

[winner69]

There's a lot of good stuff in there. Well worth the trial price of $2.50 per week, especially with the way the world is at this point !
ZEL faces very challenging times. Just one of those challenges is 23% of volume is Jet fuel. With no international airlines flying here shortly and AIR providing only skeleton international services for freight and 70% demand reduction domestically already, and much deeper cuts to come after todays announcement by the PM...jet fuel demand is set to fall off the face of a cliff. How much fuel will people use if we end up going into lockdown ?

The Refining update the other day was pretty gloomy about demand

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZR/350350/319261.pdf

[Beagle]

Big top up payment required by the fuel companies including Z to reach the floor price too. NZR also had a very gloomy outlook whereas ZEL said in their most recent guidance statement they thought skinny refining margins wouldn't persist past the current quarter. More implications for ZEL FY21 profitability ?

[Oliver Mander]

Stuart Williams, head of equities at Nikko Asset Management. Williams said Z Energy's sell-off was “perplexing”, although he noted fuel consumption does fall during a recession.
“If you look across however deep this valley that we are in is, then that is a Great Company with an enduring proposition that presents GOOD VALUE.” he said.

Disc Hold

I cannot for the life of me fathom how anyone who has done a simple analysis of Z is "perplexed" by the fall in share price....


There's a lot of good stuff in there. Well worth the trial price of $2.50 per week, especially with the way the world is at this point !
ZEL faces very challenging times. Just one of those challenges is 23% of volume is Jet fuel. With no international airlines flying here shortly and AIR providing only skeleton international services for freight and 70% demand reduction domestically already, and much deeper cuts to come after todays announcement by the PM...jet fuel demand is set to fall off the face of a cliff. How much fuel will people use if we end up going into lockdown ?

Seriously, the Herald paywall is worth it.
The estimate in the article is based on a 50% reduction in Jet Fuel demand. Likely to be a lot more at Alert level 2 or 3. Beagle, your comment on debt in an earlier post is also valid. Purchase of Caltex (mostly debt) at a time of high margins => high asset values. Margins are now low, therefore asset value not there.
(Disclosure: author of article)

As an aside - I can't work out why people on this thread think fuel prices are too high. May have been true a year or two ago, I seriously doubt it right now. It is a long-run cyclical industry, and, yes times have been good for the last 7-8 years for the petrol companies. But the 15 years before that were garbage. And the next 10 years...well....they are not likely to be great. Only need to look at the state of Z's P&L right now to work that one out.

[dreamcatcher]

Oil on the rebound ............

[whatsup]

Look like the float financials has come back to bite it, is there toooooooo much gearing going on here?

[macduffy]

Perhaps not strictly relevant but I happened to be watching a documentary on the Middle East yesterday. It reminds us that in the first oil shock in the early 1970's, the POO quadrupled - from $3 to $12! Now, that was a shock!

[Marilyn Munroe]

Oil on the rebound ............

I see no evidence of cruise ship captains ramming one another in order to jump the queue at the bunker wharf nor stories of frustrated airline passengers having to wait for their flights while Z rushes fuel from the refinery or tales of queues found the block at service stations.

Whatever is causing oil prices to rise it is not demand.

Boop boop de do
Marilyn

[Beagle]

I cannot for the life of me fathom how anyone who has done a simple analysis of Z is "perplexed" by the fall in share price....



Seriously, the Herald paywall is worth it.
The estimate in the article is based on a 50% reduction in Jet Fuel demand. Likely to be a lot more at Alert level 2 or 3. Beagle, your comment on debt in an earlier post is also valid. Purchase of Caltex (mostly debt) at a time of high margins => high asset values. Margins are now low, therefore asset value not there.
(Disclosure: author of article)

As an aside - I can't work out why people on this thread think fuel prices are too high. May have been true a year or two ago, I seriously doubt it right now. It is a long-run cyclical industry, and, yes times have been good for the last 7-8 years for the petrol companies. But the 15 years before that were garbage. And the next 10 years...well....they are not likely to be great. Only need to look at the state of Z's P&L right now to work that one out.

Jet fuel demand will be just a few percent now. Plenty of price gouging going on. Local Z wanted $1.97 for 91 octane yesterday which is absolutely scandalous for where oil is currently priced. That's how Z are able to meet their previous guidance. Massive price gouging. "Z is for New Zealand". Yeah right.

[macduffy]

I see no evidence of cruise ship captains ramming one another in order to jump the queue at the bunker wharf nor stories of frustrated airline passengers having to wait for their flights while Z rushes fuel from the refinery or tales of queues found the block at service stations.

Whatever is causing oil prices to rise it is not demand.

Boop boop de do
Marilyn

No, it's just that Trump thinks he can broker a deal between Saudi Arabia and Russia to reduce supplies. No mention of USA's production in this arrangement, of course!

[macduffy]

Jet fuel demand will be just a few percent now. Plenty of price gouging going on. Local Z wanted $1.97 for 91 octane yesterday which is absolutely scandalous for where oil is currently priced. That's how Z are able to meet their previous guidance. Massive price gouging. "Z is for New Zealand". Yeah right.

You have reminded us, from time to time that tax is responsible for about half of the pump price. Have you taken that into account?

;)

[dreamcatcher]

I see no evidence of cruise ship captains ramming one another in order to jump the queue at the bunker wharf nor stories of frustrated airline passengers having to wait for their flights while Z rushes fuel from the refinery or tales of queues found the block at service stations.

Whatever is causing oil prices to rise it is not demand.

Boop boop de do
Marilyn

You hit it on the nail "no demand" world is currently awash with surplus oil, no more containers to fill. Suppliers will shut down production as cheaper to leave oil in ground creating massive unemployment. Oil not just used as fuel for boats, planes and cars. Reductions talked about could be 15m barrels a day to prop up prices.

https://edition.cnn.com/2020/04/02/business/oil-prices-trump-russia-saudi-arabia/index.html

[dreamcatcher]

Been through deflation when duty on clothing was reduced to zero and local manufacturers had to compete with Chinese prices. T-shirts costing 70c minimums orders around 30,000 - 100,000 .......... my question is why did local retailers not sell t-shirts for $1.40 as markup was 100%

Answer is simple could not sell VOLUME ......Fuel prices will ALWAYS remain high unless NZ creates VOLUME

Who knows ?

[Balance]

Jet fuel demand will be just a few percent now. Plenty of price gouging going on. Local Z wanted $1.97 for 91 octane yesterday which is absolutely scandalous for where oil is currently priced. That's how Z are able to meet their previous guidance. Massive price gouging. "Z is for New Zealand". Yeah right.

https://www.rnz.co.nz/news/national/413543/covid-19-global-fuel-glut-will-cost-nz-companies-millions

Pain for Z & the other petrol companies.

"We've indicated we will incur a loss in the near future, around the $8 to $10 million level.

"That's the cost of having to take these boats, and crude that we've already purchased, and sending them back into the market that's at ... something of a glut. We're having to take a loss on something we already bought, because we don't have the physical space to store it right now."

[Beagle]

Thanks Balance. Interesting times for sure ! NZR on go slow to the end of August now https://www.nzx.com/announcements/351320

I missed this announcement the other day. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/351200/320262.pdf

This latest move by ZEL to cut the dividend altogether adds to a now fairly established pattern suggesting ZEL is not a "reliable dividend payer" and accordingly I will exclude it from any future considerations in terms of its suitability as a retirement income stock.

On a different topic, with people only making relatively few infrequent short trips to their local supermarket to replace essential food supplies, car batteries will be under pressure to maintain sufficient charge so warming your car up for 5-10 minutes, (i.e. extra battery charging time), and taking your time with the drive makes good sense to help your car's electrical system get enough charge to cope during the lockdown period. No trips to the supermarket required ? If you don't have a trickle charger it might be a good idea to start you car up in the driveway and let it idle for 20 minutes or so once a week.

[Chinesekiwi]

Thanks Balance. Interesting times for sure ! NZR on go slow to the end of August now https://www.nzx.com/announcements/351320

I missed this announcement the other day. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/351200/320262.pdf

This latest move by ZEL to cut the dividend altogether adds to a now fairly established pattern suggesting ZEL is not a "reliable dividend payer" and accordingly I will exclude it from any future considerations in terms of its suitability as a retirement income stock.

On a different topic, with people only making relatively few infrequent short trips to their local supermarket to replace essential food supplies, car batteries will be under pressure to maintain sufficient charge so warming your car up for 5-10 minutes, (i.e. extra battery charging time), and taking your time with the drive makes good sense to help your car's electrical system get enough charge to cope during the lockdown period. No trips to the supermarket required ? If you don't have a trickle charger it might be a good idea to start you car up in the driveway and let it idle for 20 minutes or so once a week.


Very prudent advice - my mate got an emergency call for work yesterday and ....battery dead.

[Cyclical]

Alrighty people, a little competition to see in the 4 week anniversary of the lock down. The winner gets a barrel of crude*

Which of you has spent the most on fuel for your automobiles, motorcycles and other forms of hydrocarbon burning modes of land transport since we went into level 4? To keep the playing field even, this is for private domestic use only.

Our household has spent a grand total of:

$0

Or precisely 100% less than our usual spend over a 4 week period.

That's a relief, I wouldn't want to win my own competition now, would I?

*I can't really give you a barrel of crude per se, but understand there are people out there that will pay you to take the product off their hands.

[Grimy]

$0 for us as well. And if you are not an essential worker and had half a tank of fuel I guess most will be $0 or close to it.
I've made two trips to the supermarket, three trips to the vet and one trip to the laboratory in Mt Wellington (from West Auckland) to get a biopsy from our cat analysed. So not many kms.
If it wasn't for the cat I would have done only 80-odd kms, and that's only because we live out of town a bit.

[peat]

is this a confession or a competition?

I've spent a couple of hundred dollars adding to my sharetank.
When we go to Level Freedom I'm going driving just for the hell of it. And I will have paid for all the gas so it will be free lol.

[Beagle]

I've driven to the local supermarket and back twice in the last 4 weeks, a grand total of 9 km's total running. The petrol gauge hasn't even moved but my stomach has with all the comfort food I bought lol

[Grimy]

I haven't bought any fuel. But did buy some Z shares...……..Now that's a confession!

[King1212]

Yup ..been buying too. Next week will see people back to work. 2 weeks later move to alert 2. Planes are ready to fly too.

https://i.stuff.co.nz/business/121153817/lockdown-announcement-gives-air-new-zealand-a-bookings-bounce

[nztx]

I went to the local Z Service Station on Sunday evening for a few essentials

Not one other person or vehicle on the pumps or forecourt there (20+ group of pumps on quite a large area)

Apparently this is occurring often now I was lead to believe & trade was very light for what was a very busy outlet


On the very low activity now there which must be prevalent nationally, I would be cautious looking at Z shares

Also further large levies due to NZR (The Refinery) being likely on low volume processed comes to mind with Z
& other major Petroleum company retailers - are these at all likely ?

Another issue may be forward committed bulk purchases ? (similar to AIR) comes to mind..

[King1212]

Update on how much fuel they sold are on the announcement. At least they still selling n business still running. Compare with others stocks

400k people will go back to work next week plus business to get ready this week.

One assumes those people will walk n bike to work? Perhaps put a tap water on petrol tank.

PS. Not to mention extra kgs that they gained during the lockdown. The cars will burn more fuel....

[nztx]

Update on how much fuel they sold are on the announcement. At least they still selling n business still running. Compare with others stocks

even if it's a fraction of 'normal times' on drastically curtailed customer activity..

[peat]

PS. Not to mention extra kgs that they gained during the lockdown. The cars will burn more fuel....

Instant place on the marketing team for that one.
Hey you fatties, buy more gas coz you know, you're gonna need it.

[theace]

CEO on Hoskings this morning .... Sales down 80% in Level 4, expected to be around 60% in Level 3.

[see weed]

CEO on Hoskings this morning .... Sales down 80% in Level 4, expected to be around 60% in Level 3.
Well that's a positive, sales up about +20% from -80% to -60%. Then lock down level 2... level 1... Maybe sales up 70% to 80%. Val Approx $8.50, NTA $6, Dividend 47c when petrol flowing, Div YLD 14%, sp at 10+ year low. Couldn't resist dipping my toe in last week purchasing 2 blocks under $3 and 2 blocks over $3.10c, for long term gain.

[sb9]

Well that's a positive, sales up about +20% from -80% to -60%. Then lock down level 2... level 1... Maybe sales up 70% to 80%. Val Approx $8.50, NTA $6, Dividend 47c when petrol flowing, Div YLD 14%, sp at 10+ year low. Couldn't resist dipping my toe in last week purchasing 2 blocks under $3 and 2 blocks over $3.10c, for long term gain.

Sorry to pour cold water on your enthusiasm, but FY20 divvy is cancelled as per their recent update...

[Beagle]

Sorry to pour cold water on your enthusiasm, but FY20 divvy is cancelled as per their recent update...

Not to forget ZEL have a poor track record of "shocking" the market and messing around with their dividends. Its also a company with very high gearing and is rapidly losing market share, not to forget propping up NZR. Then there's the long term questions. They're huge jet fuel suppliers. How many years before demand for jet fuel returns to anything like what it was ? Will this lockdown change people's driving habits in the future ? Will electric cars start to take off over the next few years ?

[King1212]

Like I said master Beagle...one assumes to walk or bike to work next week. Or put water on the tank.

400k people will go back to work next Tuesday. Not everyone is on retirement like most of us here

[see weed]

Sorry to pour cold water on your enthusiasm, but FY20 divvy is cancelled as per their recent update...
I know...Long term.

[see weed]

Not to forget ZEL have a poor track record of "shocking" the market and messing around with their dividends. Its also a company with very high gearing and is rapidly losing market share, not to forget propping up NZR. Then there's the long term questions. They're huge jet fuel suppliers. How many years before demand for jet fuel returns to anything like what it was ? Will this lockdown change people's driving habits in the future ? Will electric cars start to take off over the next few years ?
Good points....me long term.

[King1212]

I dont personally see the electric cars on the trend now. When u looked at US..they kept buying the oil n store it during the last couple weeks. Why people buying expensive electric cars when the oil is flooded the market n cheaply over there

[sb9]

I know...Long term.

All good, knowing your trading (as per ATM thread), thought you might be in short term, hence the comments.

[Gerald]

Well that's a positive, sales up about +20% from -80% to -60%. Then lock down level 2... level 1... Maybe sales up 70% to 80%. Val Approx $8.50, NTA $6, Dividend 47c when petrol flowing, Div YLD 14%, sp at 10+ year low. Couldn't resist dipping my toe in last week purchasing 2 blocks under $3 and 2 blocks over $3.10c, for long term gain.

NTA is about $0.60, not $6 from FY19.

[BlackPeter]

I dont personally see the electric cars on the trend now. When u looked at US..they kept buying the oil n store it during the last couple weeks. Why people buying expensive electric cars when the oil is flooded the market n cheaply over there

Buying a new car is normally a long term decision (given an average vehicle life span of 2 decades or so).

How long do you think cheap oil will prevail if markets start humming again - no matter whether this is in 6 months or in 3 years from now? Same demand and significantly less supply due to Americas shale oil industry going to the dogs.

I'd think buying a new electric car wold make a lot of sense. Anybody buying a new gas guzzler now will rapidly need to write off their investment when (whether in months or a couple of years) oil prices ramp up again.

[Beagle]

Buying a new car is normally a long term decision (given an average vehicle life span of 2 decades or so).

How long do you think cheap oil will prevail if markets start humming again - no matter whether this is in 6 months or in 3 years from now? Same demand and significantly less supply due to Americas shale oil industry going to the dogs.

I'd think buying a new electric car wold make a lot of sense. Anybody buying a new gas guzzler now will rapidly need to write off their investment when (whether in months or a couple of years) oil prices ramp up again.

I foresee some of these people really getting stuck into sharetank in a month or so when retail fuel prices start to more accurately reflect brent oil prices.

[King1212]

Agreed....sadly....how many people afford to buy electric cars now? 50k the cheapest electric car....I would assume people is using the current cars

[see weed]

NTA is about $0.60, not $6 from FY19.
Woops, I was looking at ASB site...detail... 6.00 witch I thought was $6, must be 6c:D:confused:, my mistake:scared:.

[steveb]

Jet fuel prices world wide went up 4.3% for the week ending 17/4,if oil is coming down in price one has to presume margins are going up.Time will tell of course but overall this should be a positive for Z but not so good for airlines who are trying to recover.
However it could just a one week blip!

[Cyclical]

Jet fuel prices world wide went up 4.3% for the week ending 17/4,if oil is coming down in price one has to presume margins are going up.Time will tell of course but overall this should be a positive for Z but not so good for airlines who are trying to recover.
However it could just a one week blip!

It's probably more a reflection of the cost per unit to refine and supply the stuff, as opposed to the cost of the raw product/crude. With volumes way down, most in the industry will be running severe losses.

[BlackPeter]

Jet fuel prices world wide went up 4.3% for the week ending 17/4,if oil is coming down in price one has to presume margins are going up.Time will tell of course but overall this should be a positive for Z but not so good for airlines who are trying to recover.
However it could just a one week blip!

Earnings are not just about margins ... and revenues will be ways down and stay so for some time.

[King1212]

Fuel consumption started to grow

[bull....]

petrol prices to high , oil is crashing

[stoploss]

petrol prices to high , oil is crashing

I know taxes are different but 84 cents a L in Australia .....

[bull....]

I know taxes are different but 84 cents a L in Australia .....

the govt may do some stuff good but they are hopeless at looking into the rorting from supermarkets , petrol etc in NZ and the AA make me crinch everytime i hear them. lapdogs of the oil co's

[nztx]

NTA is about $0.60, not $6 from FY19.


Try $0.06 NTA - direct off the NZX ZEL page

[Gerald]

Try $0.06 NTA - direct off the NZX ZEL page

I never trust metrics by google/nzx or websites normally.

NTA = Assets - intangibles - goodwill - all liabilities

NTA fy19 = 2847 - 475 - 193 - 1927 = 252m

425m shares on issue. 252m/425m = 0.59

Or am I missing something?

[blackcap]

I never trust metrics by google/nzx or websites normally.

NTA = Assets - intangibles - goodwill - all liabilities

NTA fy19 = 2847 - 475 - 193 - 1927 = 252m

425m shares on issue. 252m/425m = 0.59

Or am I missing something?

Looks about right to me.

[winner69]

Z themselves in HY Announcement to NZX said NTA was $0.06

Probably a mistake but Wish they’d do these things to pump prices ;)

[winner69]

Bad day for Debra thst half time .... she had to correct the dividend notice to the NZX ...but nobody told her about the NTA

[Cyclical]

Z themselves in HY Announcement to NZX said NTA was $0.06

Probably a mistake but Wish they’d do these things to pump prices ;)

Haha, yeah right. I got charged twice on my card at BP once (they didn't think it went through the first time). Still regret not going back and sorting it. It's only money.

[zacman]

the govt may do some stuff good but they are hopeless at looking into the rorting from supermarkets , petrol etc in NZ and the AA make me crinch everytime i hear them. lapdogs of the oil co's
Couldn't agree more. It really gets my goat to here fuel companies complain about margins but if I shop at the supermarket I can get 6 cents a litre off. The margin is not that bad if there is a 6 cent buffer

zacman

[Poet]

Couldn't agree more. It really gets my goat to here fuel companies complain about margins but if I shop at the supermarket I can get 6 cents a litre off. The margin is not that bad if there is a 6 cent buffer

zacman

Hmmm, yes but maybe the buffer is in how much you are paying for your groceries rather than in the petrol company's margin. Just a thought

[dreamcatcher]

Couldn't agree more. It really gets my goat to here fuel companies complain about margins but if I shop at the supermarket I can get 6 cents a litre off. The margin is not that bad if there is a 6 cent buffer

zacman

Buffer probably 15 - 18 cents

[nztx]

I never trust metrics by google/nzx or websites normally.

NTA = Assets - intangibles - goodwill - all liabilities

NTA fy19 = 2847 - 475 - 193 - 1927 = 252m

425m shares on issue. 252m/425m = 0.59

Or am I missing something?


You're right about metrics appearing at times

Post share-consolidation ALF was another with similar incorrect metrics / NTA etc for a while

[bull....]

Petrol prices: The problem with price dropping to 80c a litre

https://www.news.com.au/finance/economy/australian-economy/petrol-prices-the-problem-with-price-dropping-to-80c-a-litre/news-story/50eb3ca25c535710d56a093b6efe6bec

the biggest price difference between NZ and AUS i think ever

[Cyclical]

Petrol prices: The problem with price dropping to 80c a litre

https://www.news.com.au/finance/economy/australian-economy/petrol-prices-the-problem-with-price-dropping-to-80c-a-litre/news-story/50eb3ca25c535710d56a093b6efe6bec

the biggest price difference between NZ and AUS i think ever

Thankfully we're being "fleeced" by the government with fuel tax, so the impact of the drop in price won't impact the CPI as much as it will in Oz. How convenient.

[Beagle]

Help, I bleed blue and have always voted that way but I think the chief fleecer has been doing a very good job with Covid 19 and also did a very good job with her response to the Chch Mosque attack. I'm actually starting to really like her...maybe I have a bad case of Stockholm syndrome in lockdown lol

More likely with high blood pressure and at my age I feel she has done a good job looking after at risk people like me.

Perhaps the fact that I haven't been driving lately so haven't been fleeced by the hefty road taxes could also have something to do with it :)

Anyway back to Z...quite an interesting article in the behind the paywall Herald about NZR and what its costing its shareholders including ZEL and inadequate return on capital
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12327734

[Cyclical]

Help, I bleed blue and have always voted that way but I think the chief fleecer has been doing a very good job with Covid 19 and also did a very good job with her response to the Chch Mosque attack. I'm actually starting to really like her...maybe I have a bad case of Stockholm syndrome in lockdown lol

Perhaps the fact that I haven't been driving lately so haven't been fleeced by the hefty road taxes could also have something to do with it :)

Anyway back to Z...quite an interesting article in the behind the paywall Herald about NZR and what its costing its shareholders and inadequate return on capital

Yes, I know where you're coming from. My main concern is that at this rate, it may end up being a Labour majority and no Winnie required for a coalition, which means no one to keep them honest when it comes to the likes of CGT and other fleecing mechanisms. Still, we've a few months for a recession to hit home and possibly change the landscape somewhat, and for the Nat's to find an inspirational leader...where's that Tui?

[dibble]

Oh for goodness sake. Fleeced?? Most OECD countries have chunky fuel tax. US is an obvious exception but have you driven on their decrepit roads and navigated the arcane ways to pay the rather high tolls? Dreadful model. Someone has to pay for stuff and fuel tax seems a reasonable model for a non-communist state. If any of you can demonstrate that all the costs of road transport (including policing, ambulancery, hospitals, environment and long term pollution costs blah blah) are materially lower than all the related road tax paid then brilliant, present it. Did National reduce fuel tax? I dont recall it.

[Cyclical]

Oh for goodness sake. Fleeced?? Most OECD countries have chunky fuel tax. US is an obvious exception but have you driven on their decrepit roads and navigated the arcane ways to pay the rather high tolls? Dreadful model. Someone has to pay for stuff and fuel tax seems a reasonable model for a non-communist state. If any of you can demonstrate that all the costs of road transport (including policing, ambulancery, hospitals, environment and long term pollution costs blah blah) are materially lower than all the related road tax paid then brilliant, present it. Did National reduce fuel tax? I dont recall it.

Oh for goodness sake, chill. TaxCinda coined the phrase when she said we were being fleeced by the fuel companies. The irony was not lost on many. Anyway, what contribution are those electric cars making towards the cost of road transport, while the less well-heeled are taxed heavily to drive to work in their old gas guzzling tanks?

[tim23]

Oh for goodness sake, chill. TaxCinda coined the phrase when she said we were being fleeced by the fuel companies. The irony was not lost on many. Anyway, what contribution are those electric cars making towards the cost of road transport, while the less well-heeled are taxed heavily to drive to work in their old gas guzzling tanks?

The TaxCinda thing is a bit silly, fuel taxes have been around for ages and will continue. By the way I don't think we are being fleeced I have shares in Z!

[tommy_d]

TaxCinda
we're funny eh.
there are some that say that trump can do no wrong, some that say he can do no right.
ditto for john key
ditto for jacinda ardern

absolutes, and being blind to alternatives, are an interesting way to view and live the world

[cyclist]

we're funny eh.
there are some that say that trump can do no wrong, some that say he can do no right.
ditto for john key
ditto for jacinda ardern

absolutes, and being blind to alternatives, are an interesting way to view and live the world

Yep. Binary thinking. There is a lot of it on Sharetrader (and everywhere). Makes the political threads very hard going, but also the supposedly non-political ones too, sometimes.

[Chinesekiwi]

Oh for goodness sake. Fleeced?? Most OECD countries have chunky fuel tax. US is an obvious exception but have you driven on their decrepit roads and navigated the arcane ways to pay the rather high tolls? Dreadful model. Someone has to pay for stuff and fuel tax seems a reasonable model for a non-communist state. If any of you can demonstrate that all the costs of road transport (including policing, ambulancery, hospitals, environment and long term pollution costs blah blah) are materially lower than all the related road tax paid then brilliant, present it. Did National reduce fuel tax? I dont recall it.

So true.

Went to Houston twice last year. The roads were abominable - pot holes in so many places, truly shocking condition and this was just outside the galleria area. Worst roads ever in any Western country we have driven in. A decent fuel tax to fund this would help but then again Yankees have this aversion to any government and taxes - something about god, guns and liberty (for the rich).

[Cyclical]

I think some of you are taking the political thing a little too seriously. If you don't think there is irony in a government (be that a Labour or a National lead one) suggesting we're being fleeced by the fuel companies, then I don't know what to say. Not sure what a litre of 91 costs atm as I haven't bought any for over a month, but let's say it's $1.80... That has about 74c worth of fuel excise tax in it, then another 23c in GST (~10c of which is tax on tax). So over 50% tax before you even consider the tax a fuel company might pay on any profit. Yes, I'm sure it all goes to worthy places blah blah, but my point remains, it's a little ironic for a government to suggest we are being fleeced by the fuel companies.

[sb9]

I think some of you are taking the political thing a little too seriously. If you don't think there is irony in a government (be that a Labour or a National lead one) suggesting we're being fleeced by the fuel companies, then I don't know what to say. Not sure what a litre of 91 costs atm as I haven't bought any for over a month, but let's say it's $1.80... That has about 74c worth of fuel excise tax in it, then another 23c in GST (~10c of which is tax on tax). So over 50% tax before you even consider the tax a fuel company might pay on any profit. Yes, I'm sure it all goes to worthy places blah blah, but my point remains, it's a little ironic for a government to suggest we are being fleeced by the fuel companies.

Hit the nail on its head, roughly about more than 50% of retail pump price at anytime account for govt tax take. If they (govt) wants to do something about it, they should look at their own backyard first.

[Bjauck]

I think some of you are taking the political thing a little too seriously. If you don't think there is irony in a government (be that a Labour or a National lead one) suggesting we're being fleeced by the fuel companies, then I don't know what to say. Not sure what a litre of 91 costs atm as I haven't bought any for over a month, but let's say it's $1.80... That has about 74c worth of fuel excise tax in it, then another 23c in GST (~10c of which is tax on tax). So over 50% tax before you even consider the tax a fuel company might pay on any profit. Yes, I'm sure it all goes to worthy places blah blah, but my point remains, it's a little ironic for a government to suggest we are being fleeced by the fuel companies.

Perhaps it is electorally easier to raise populist ire and direct it on non-government scapegoats than to address inadequate government legislation and unfair tax policies?

[Bjauck]

So true.

Went to Houston twice last year. The roads were abominable - pot holes in so many places, truly shocking condition and this was just outside the galleria area. Worst roads ever in any Western country we have driven in. A decent fuel tax to fund this would help but then again Yankees have this aversion to any government and taxes - something about god, guns and liberty (for the rich). The Brits taxed their tea and the American colonists tipped the tea into Boston Harbour. If a fuel tax were introduced, would the Texans tip their oil into the Rio Grande?

[winner69]

Volumes picking up

Maybe people did travel more over Easter?

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/352282/321523.pdf

[Mya]

All the retailers were allowed access back to the premises for all of last week to prepare for Level 3 this week, so there was a lot more activity on the roads.

[bull....]

postponing results , due to talking to lenders. must be looking to strengthen there balance sheet , debt ratios

[Pricey]

Good to see the ACC (not the Alternative Commentary Collective - the other one) buying up at these levels. Good things should come with level 2!

[winner69]

**** hits the fan big time ....big loss reported

No divie until after Sept 2021

And $350m capital raise (at $2.75)


Tough world

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/352920/322308.pdf

[winner69]

Such bad company news = share price will go up this week?

No worries

[bull....]

postponing results , due to talking to lenders. must be looking to strengthen there balance sheet , debt ratios

as expected , of course this capital raising is only enough capital to carry them up till 22 yr cause there basing things back to normal by then. if things are still not good by then debt levels will be still high and dividend will be postponed for more years.
people who thought this was a safe company for dividends have seriously done there dough. it always was a dividend trap stock

[Arbroath]

**** hits the fan big time ....big loss reported

No divie until after Sept 2021

And $350m capital raise (at $2.75)


Tough world

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/352920/322308.pdf

I don't own this but follow it and the result is a shocker....feel sorry for holders.
No real option but to take up the equity offer and wait 18 months for dividend reinstatement

I don't know why NZ companies like to think USPP's are a good idea, supposedly to diversify funding etc
All they do is hold your nuts over the fire whenever there's any trouble and force deeply discounted equity raises imho.

[winner69]

Raising $350m new capital when current subscribed capital is $430m (with along with $170m revaluation reserve of $170m gives total equity of $600m) is pretty telling

And still heaps of debt will remain

[trader_jackson]

Raising $350m new capital when current subscribed capital is $430m (with along with $170m revaluation reserve of $170m gives total equity of $600m) is pretty telling

And still heaps of debt will remain

and the raising is to be kicked off at $2.75? I wouldn't pay $2 for the shape Z Energy is in... income uncertain and in recovery mode for the next few years, no dividend now till (crossing fingers) FY22 and dividends unlikely to be as big as they were for a very long time, 6 cent NTA topped off by a terrible balance sheet post capital raising (putting it lightly)

[Maverick]

and the raising is to be kicked off at $2.75? I wouldn't pay $2 for the shape Z Energy is in... income uncertain and in recovery mode for the next few years, no dividend now till (crossing fingers) FY22 and dividends unlikely to be as big as they were for a very long time, 6 cent NTA topped off by a terrible balance sheet post capital raising (putting it lightly)
Yep, all of that TJ, all true.....let's just also remember that COVID only affected fuel consumption for 1 week of this reporting period. Z managed to achieve most of this disaster all by this themselves!
This company has got serious and systemic issues way before covid gets layered over it.
interesting that Morningstar have a valuation of $8.30. Maybe they are still at lockdown level 4 and having internet issues.

[Beagle]

**** hits the fan big time ....big loss reported

No divie until after Sept 2021

And $350m capital raise (at $2.75)


Tough world

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/352920/322308.pdf

When you consider this is an essential commodity the effects of Covid 19 are sobering on their operations BUT there have been systemic issues within this company for a while with a massively bloated cost structure that they're only now having to address, (no doubt under duress from their banks).
Even after this equity raise they still have a tremendous amount of debt and I believe they are vulnerable to ongoing market share losses so I will continue to avoid.

I also agree with t.j's post #1600 above.

[peat]

good that they wont go under for a while so I can use my Sharetank

j/k
maybe not.

[Beagle]

Maybe struggle to raise the capital ? I see a banner headline on Direct Broking at the top of the page with the headline that if you want to participate in the capital raise please phone us... If there's shares freely available for retail punters then one has to wonder if that's a good indicator or not...
I see the underwrite agreement has the usual termination rights to it, whatever that means, I suppose there's a well defined MAC clause in there :)

Whatever they raise they will claim this exercise as a success...

I see the virtual tank in the same light as the airpoints with AIR. Probably has similar MAC and force majeure clauses to the virtual tank as the airpoints scheme does ?

[peat]

Maybe struggle to raise the capital ? I see a banner headline on Direct Broking at the top of the page with the headline that if you want to participate in the capital raise please phone us... If there's shares freely available for retail punters then one has to wonder if that's a good indicator or not...
.


I assumed that still meant you had to be a shareholder , are you suggesting otherwise?


I see the virtual tank in the same light as the airpoints with AIR. Probably has similar MAC and force majeure clauses to the virtual tank as the airpoints scheme does ?

It wont take me long to spend it when the L2 comes back into play. I have got some serious travelling to do to catch up to my plans hahah.

[Joshuatree]

We havnt had any ZEL since our big selldown on Feb 4th but we have been offered some $2.75-$2.85 and we have to let them know by midday.

[see weed]

ACC will be a bit peeved. They just topped up with extra +$4m on 1/5/20. Where do you think sp will be after trading halt? I am expecting about a 20k to 30k loss when market opens:eek2:. Not too bad compared to ACC's loss.

[dreamcatcher]

We havnt had any ZEL since our big selldown on Feb 4th but we have been offered some $2.75-$2.85 and we have to let them know by midday.

Equity Raising Opens on 15th May ..........closes 29th May

[Joshuatree]

...by midday if we want to partake.

[Mya]

...Ignore comment...

[see weed]

Yep, all of that TJ, all true.....let's just also remember that COVID only affected fuel consumption for 1 week of this reporting period. Z managed to achieve most of this disaster all by this themselves!
This company has got serious and systemic issues way before covid gets layered over it.
interesting that Morningstar have a valuation of $8.30. Maybe they are still at lockdown level 4 and having internet issues.
Maybe ASB Morningstar should put their money where their mouth is.....Buy Buy Buy...Valuation $8.30 for the last month or so.

[peat]

We havnt had any ZEL since our big selldown on Feb 4th but we have been offered some $2.75-$2.85 and we have to let them know by midday.

the implications of that are a bit scary ….

scary enough to turn down I would imagine.

[Grumble]

Maybe ASB Morningstar should put their money where their mouth is.....Buy Buy Buy...Valuation $8.30 for the last month or so.

I can't remember the last time I've seen an accurate Morningstar valuation.

[cyclist]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/270961/221717.pdf



This may be a stupid question but how can they justify such a large book build price compared to current market price considering future uncertainty, high company debt, low NTA, etc?

Does this mean they are effectively valuing ZEL at some amount HIGHER than $6.00 - $6.20/share (considering the effect of 30% share dilution from equity raise)?

The date of that document may offer a clue .....:eek2:

[Sideshow Bob]

I can't remember the last time I've seen an accurate Morningstar valuation.

Definitely an oxymoron.....

[Mya]

The date of that document may offer a clue .....:eek2:

D'oh you're right. It was attached to an NZX announcement but I see that has now been removed... Will delete my past post in shame.

[Joshuatree]

the implications of that are a bit scary ….

scary enough to turn down I would imagine.

I ve thought that about most of the raisings so far and what, have all/most of them been easy money for arbitrage/trading/profiting on selling existing holdings and buying the SPP cheaper.?

[macduffy]

I ve thought that about most of the raisings so far and what, have all/most of them been easy money for arbitrage/trading/profiting on selling existing holdings and buying the SPP cheaper.?

Let's wait and see what price the shares come back on when trading recommences!

[HKG2301]

...by midday if we want to partake.

I missed that, until after midday. Bit of an unseemly rush?

I'm a shareholder, but no longer through a managing broker (FB charges like a wounded bull), so didn't receive any communication from ZEL that I'm aware of, to allow me to partake in the placement. I did spot the Direct Broking banner, but it omitted any reference to a midday deadline, which would have been useful.

Still, at $2.75 I think I'd still have decided to wait for the SPP, which may very well end up cheaper!

[tango]

I missed that, until after midday. Bit of an unseemly rush?

I'm a shareholder, but no longer through a managing broker (FB charges like a wounded bull), so didn't receive any communication from ZEL, that I'm aware of, to allow me to partake in the placement. I did spot the Direct Broking banner, but it omitted any reference to a midday deadline, which would have been useful.

Still, at $2.75 I think I'd still have decided to wait for the SPP, which may very well end up cheaper!

I think the SPP is also $2.75

I didn't see the banner on the Direct Broking website and I am undecided if I want to participate in the SPP. It looks like another one of those stupid put in up to $50K and we will hang on to it, give you almost no shares and then when they finally get around to it refund the balance. I much prefer rights issues with the option to oversubscribe. It makes it much easier to gauge how much money to put in. I have so many SPP at the moment that I want to be selective

[HKG2301]

I think the SPP is also $2.75

From the SPP notes: "The price of shares offered under the SPP will be the lower of the Placement share priceor a 2.5% discount to the 5-day VWAP of Z shares traded on the NZX during the last 5 daysof the SPP offer period", which ends 29 May.

[tango]

From the SPP notes: "The price of shares offered under the SPP will be the lower of the Placement share priceor a 2.5% discount to the 5-day VWAP of Z shares traded on the NZX during the last 5 daysof the SPP offer period", which ends 29 May.

Thanks!
That probably makes it $2.75 ;)

I see also:
Z intends to offer the SPP to eligible shareholders in New Zealand and Australia, inviting
them to apply for up to NZ$50,000 / ~A$47,000 of new Z Energy shares free of any
brokerage, commission and transaction costs
• The SPP offer size is up to NZ$60 million, and if scaling of the SPP is required, it will be done
having regard to existing holdings as at the record date of 8 May 2020
• Z can accept oversubscriptions at its discretion

I always find it hard to judge how much to put in. In this case so much has changed for Z that it's hard to assess the value.

ironically I bought ZEL as a dividend stock. That's well down the gurgler :D

[HKG2301]

Ironically I bought ZEL as a dividend stock. That's well down the gurgler :D

You and me both!

I won't make a decision on participating in the SPP 'til the last moment. As discussed elsewhere, I reckon there's still a huge risk that the US markets will collapse from these levels and drag us down with them.

Early days.

[dibble]

...I always find it hard to judge how much to put in. In this case so much has changed for Z that it's hard to assess the value.


Dont forget.... the more you apply for the less you will get if there are oversubs (ie as you are helping create the oversub maths). That's the quirk of this system. That said odds of oversubs are probably a lot slimmer than AIA, indeed you may get all 50k if you scribble that in your application.

[value_investor]

Such bad company news = share price will go up this week?

No worries

I don't see any positives here but based on the recent share market logic, this is going to be up massively right?

Not sure what you would see to participate here. Company is in the sunset phase in its industry. Not a strong fundamental position. Can't do much from a strategy point of view, price is monitored by the government, no room for future growth, high fixed costs and a weak balance sheet.

Disc: Not a holder.

[kiwico]

You and me both!

I won't make a decision on participating in the SPP 'til the last moment. As discussed elsewhere, I reckon there's still a huge risk that the US markets will collapse from these levels and drag us down with them.

Early days.

I too was a holder for the dividend but glad I move them on at a higher price. The trouble is that higher price was higher than I bought them at.

[JohnnyTheHorse]

Bit of desperation if Jarden are accepting applications from Direct Broking clients? Pretty unusual if the issue is even slightly popular.

[Beagle]

I don't see any positives here but based on the recent share market logic, this is going to be up massively right?

Not sure what you would see to participate here. Company is in the sunset phase in its industry. Not a strong fundamental position. Can't do much from a strategy point of view, price is monitored by the government, no room for future growth, high fixed costs and a weak balance sheet.

Disc: Not a holder.

An excellent synopsis. Really surprised they got support for this capital raise. I will continue to avoid.

[trader_jackson]

shares issued at $2.90, share price opened at $3.08... the faith is incredibly strong in this one!
As mentioned before, I personally can't get excited paying more than about $2.

[Balance]

Bit of desperation if Jarden are accepting applications from Direct Broking clients? Pretty unusual if the issue is even slightly popular.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ZEL/352967/322361.pdf

Not only popular but heavily over-subscribed - the price was bid to $2.90 (vs u/w price of $2.75).

Not a shareholder but pleased to see that there's plenty of appetite and money out there to support companies through this rough patch.

[whatsup]

Correct me if Im wrong but were they listed at approx. $5-00, if so this has to be one of the greatest price destruction on the NZX in recent years .

[tango]

Dont forget.... the more you apply for the less you will get if there are oversubs (ie as you are helping create the oversub maths). That's the quirk of this system. That said odds of oversubs are probably a lot slimmer than AIA, indeed you may get all 50k if you scribble that in your application.

The notes say "if scaling of the SPP is required, it will be done having regard to existing holdings as at the record date of 8 May 2020"

AIA had the same wording (seems to be the standard template these days) and scaled strictly according to existing shareholding. No consideration was given to the application amount. Hence I am not going to put I the full $50k

Besides I need to keep money for Ramsay RHC:ASX and any other SPP that come up.
I don't want $50k sitting in an account I can't touch for 2 weeks

[tango]

Bit of desperation if Jarden are accepting applications from Direct Broking clients? Pretty unusual if the issue is even slightly popular.

Direct Broking IS Jarden.

[JohnnyTheHorse]

Direct Broking IS Jarden.

I'm aware of that. It just doesn't happen very often that clients of discount brokerage firms are offered to participate in these issues. I think the price they've got is very good and shows surprisingly strong support.

[Balance]

Correct me if Im wrong but were they listed at approx. $5-00, if so this has to be one of the greatest price destruction on the NZX in recent years .

Try Intueri, Snakk, Wynyard, Orion health etc etc etc !

[whatsup]

Try Intueri, Snakk, Wynyard, Orion health etc etc etc !

Sorry I should have said top 50 , they were there once but not now, forget the penny dreadfulls , not forgetting Feltex !!!!!

[Sir Ten]

Don't be dramatic. Listed at $3.50 - simple Google search, and literally outlined in the first few pages of this thread.

[Sir Ten]

Correct me if Im wrong but were they listed at approx. $5-00, if so this has to be one of the greatest price destruction on the NZX in recent years .

Don't be dramatic. Listed at $3.50 - simple Google search, and literally outlined in the first few pages of this thread.

[see weed]

ACC will be a bit peeved. They just topped up with extra +$4m on 1/5/20. Where do you think sp will be after trading halt? I am expecting about a 20k to 30k loss when market opens:eek2:. Not too bad compared to ACC's loss.
What a relief, was sure sp was falling to about 2.80, but now, it is still up there and gave me a chance to lighten up. Had too many as usual.:)

[HKG2301]

Bit of desperation if Jarden are accepting applications from Direct Broking clients? Pretty unusual if the issue is even slightly popular.


I'm aware of that. It just doesn't happen very often that clients of discount brokerage firms are offered to participate in these issues. I think the price they've got is very good and shows surprisingly strong support.

Am I missing something here? Are "clients of discount brokerage firms" somehow second class investors?

Personally, I use Jarden/Direct Broking because (a) they are linked to my bank, ANZ and (b) I prefer paying 0.2% per trade instead of the 1%+ I was paying at Forsyth Barr (daylight robbery, if you ask me).

So, seriously, what am I missing here? I'm keen to know.

[PS. Jarden/Direct Broking notify clients of every offer, NZX notice and corporate announcement. Just sayin'. :cool:]

[macduffy]

Am I missing something here? Are "clients of discount brokerage firms" somehow second class investors?


Yes, discount clients pay discounted brokerage and receive discount service.

;)

[GTM 3442]

Bit of desperation if Jarden are accepting applications from Direct Broking clients? Pretty unusual if the issue is even slightly popular.

I thought that Jarden owned Direct Broking.

[JohnnyTheHorse]

Am I missing something here? Are "clients of discount brokerage firms" somehow second class investors?

Personally, I use Jarden/Direct Broking because (a) they are linked to my bank, ANZ and (b) I prefer paying 0.2% per trade instead of the 1%+ I was paying at Forsyth Barr (daylight robbery, if you ask me).

So, seriously, what am I missing here? I'm keen to know.

[PS. Jarden/Direct Broking notify clients of every offer, NZX notice and corporate announcement. Just sayin'. :cool:]

Firms will typically only engage their higher value customers for share placements. Hence it isn't often that DB clients are invited to subscribe for these offers.

[gbogo]

Firms will typically only engage their higher value customers for share placements. Hence it isn't often that DB clients are invited to subscribe for these offers.

I believe Jarden’s non-existing ZEL shareholder clients got scaled back to 40% of what they asked for in the placement. Fairly popular, as the price increased from $2.85 to $2.90 at the last minute too.

[HKG2301]

Yes, discount clients pay discounted brokerage and receive discount service.

;)

I reckon I've saved about $20,000 in 6 months. That must have been some premier service I'm missing out on, to be worth that much.

Meanwhile, my TD Ameritrade fees for trading the US markets have dropped to almost zero. No premier, hand-holding service there either, I guess.

[tango]

Am I missing something here? Are "clients of discount brokerage firms" somehow second class investors?

Personally, I use Jarden/Direct Broking because (a) they are linked to my bank, ANZ and (b) I prefer paying 0.2% per trade instead of the 1%+ I was paying at Forsyth Barr (daylight robbery, if you ask me).

So, seriously, what am I missing here? I'm keen to know.

[PS. Jarden/Direct Broking notify clients of every offer, NZX notice and corporate announcement. Just sayin'. :cool:]

I am a longstanding Direct Broking client and I didn't get notified of the SPP for ZEL. Where did you see it? I am wondering if I have fallen off a mailing list. I would have preferred a firm allocation to fighting over it in the retail offer and having money tied up for a couple of weeks.

[JeremyALD]

I personally dont understand the logic behind NOT applying for the wage subsidy. They were clearly negatively impacted, well above the 30% required.

I can't see much public backlash for applying for the subsidy, especially when they are having to do a cap raise.

[Cyclical]

I personally dont understand the logic behind NOT applying for the wage subsidy. They were clearly negatively impacted, well above the 30% required.

I can't see much public backlash for applying for the subsidy, especially when they are having to do a cap raise.

Meanwhile, they're asking for help in other ways...

Z Energy puts biofuel plant to sleep, asks for Govt money

https://www.stuff.co.nz/environment/climate-news/300010423/z-energy-puts-biofuel-plant-to-sleep-asks-for-govt-money

[HKG2301]

I am a longstanding Direct Broking client and I didn't get notified of the SPP for ZEL. Where did you see it? I am wondering if I have fallen off a mailing list. I would have preferred a firm allocation to fighting over it in the retail offer and having money tied up for a couple of weeks.

I received 5 emails from Direct Broking at 0905 on Monday morning, relaying the various notices on the Halt, Placement, SPP, etc. There was also a warning banner on the Direct Broking website when you logged on, saying something like, 'If interested in the ZEL placement, call our brokers on 0800 xxx xxx". My one complaint is the midday deadline (an unseemly rush?), which I missed mention of anywhere. But then I didn't chase it as I'd already decided on waiting for the SPP and a possible lower price.

So yes, I would check your contact settings and/or give them a call and ask whatsup?

May not have been a 'firm' allocation anyway. The Placement notes talked of "...existing shareholders(including those participating through a broker) will be given priority to obtaining a prorata allocation in the Placement".

[tango]

I received 5 emails from Direct Broking at 0905 on Monday morning, relaying the various notices on the Halt, Placement, SPP, etc. There was also a warning banner on the Direct Broking website when you logged on, saying something like, 'If interested in the ZEL placement, call our brokers on 0800 xxx xxx". My one complaint is the midday deadline (an unseemly rush?), which I missed mention of anywhere. But then I didn't chase it as I'd already decided on waiting for the SPP and a possible lower price.

So yes, I would check your contact settings and/or give them a call and ask whatsup?

May not have been a 'firm' allocation anyway. The Placement notes talked of "...existing shareholders(including those participating through a broker) will be given priority to obtaining a prorata allocation in the Placement".

Thanks for that. I definitely need to check my settings.

I was logged in but maybe I ignored the banner. So many websites have Covid-19 alerts at the top of the screen that i barely notice these days. Coulda shoulda woulda. And the truth is I am still assessing the long term value. If the budget announcement is everything going electric it's not going to look too flash :)

EDIT - I checked and can't even see where to sign up for the newsletter! Must be an IQ test

[gbogo]

I wouldn't normally touch a stock in this sector (EVs, Renewables etc) but Jardens have put a $5.00 price target on it (vs $3.00 current market). Their targets seem to often get met quite quickly, so I bought a few. I guess there are some instos taking a quick 10-15c (gross) profit though..

[flyer]

I'm still comtemplating whether to get more under the SPP, at $2.90, it doesn't seem a great incentive given the price is about $3 now as I could buy more once I know the share price is on the rise. This is one of my red arrow stocks, if I knew it would go to $5 in the next little while then yes, it will be a no brainer. Having said that I think we are at the bottom and the only way is up from here.

I live right next door to a Z station and since we went to level 3, the place has been flat out which is a good sign. I think their weekly ops figures are a good indication of whats happening with increases in consumption each week.

DISC: HOLD

[see weed]

I'm still comtemplating whether to get more under the SPP, at $2.90, it doesn't seem a great incentive given the price is about $3 now as I could buy more once I know the share price is on the rise. This is one of my red arrow stocks, if I knew it would go to $5 in the next little while then yes, it will be a no brainer. Having said that I think we are at the bottom and the only way is up from here.

I live right next door to a Z station and since we went to level 3, the place has been flat out which is a good sign. I think their weekly ops figures are a good indication of whats happening with increases in consumption each week.

DISC: HOLD
When do they post out the SPP forms? I thought spp was around $2.75c:confused:.

[Cyclical]

When do they post out the SPP forms? I thought spp was around $2.75c:confused:.

From a page or two back:


From the SPP notes: "The price of shares offered under the SPP will be the lower of the Placement share price or a 2.5% discount to the 5-day VWAP of Z shares traded on the NZX during the last 5 days of the SPP offer period", which ends 29 May.

[Grimy]

Offer document email came through this evening.

[winner69]

Chris Lee says retail investors got doughnutted in the first round

Obviously has no time for Goldman Sachs

https://www.chrislee.co.nz/taking-stock

[tango]

This article is interesting. Although it’s about the refinery there is a good discussion of the challenges the industry faces. Reading it I am finding it hard to see the value in purchasing more in the SPP.

https://www.newsroom.co.nz/2020/05/15/1171063/can-our-oil-refinery-survive

[flyer]

Share price at $2.93, only 3c above the SPP:t_down:

[theace]

So how does "a 2.5% discount to the volume weighted average price (“VWAP”) of Z shares traded on NZX during the five NZX trading days up to, and including, the Closing Date (expected to be 29 May 2020)." work? So if the VWAP is $2.85 ... then shares will be allocated at $2.78ish?

[winner69]

So how does "a 2.5% discount to the volume weighted average price (“VWAP”) of Z shares traded on NZX during the five NZX trading days up to, and including, the Closing Date (expected to be 29 May 2020)." work? So if the VWAP is $2.85 ... then shares will be allocated at $2.78ish?

That’s right ...good eh

[Cyclical]

So how does "a 2.5% discount to the volume weighted average price (“VWAP”) of Z shares traded on NZX during the five NZX trading days up to, and including, the Closing Date (expected to be 29 May 2020)." work? So if the VWAP is $2.85 ... then shares will be allocated at $2.78ish?

Yeah, it's not looking terribly appealing is it, looking at where they SP is at the moment ($2.92) with downward momentum. Although I see ACC continues to load up.

[theace]

... Although I see ACC continues to load up. How do you see/check that?

Self Answered: Check the NZX announcements!

[dreamcatcher]

SP proving to be a real dog so far but there will be two ............"Weekly Market Updates" before close.

[Beagle]

Average price in Australia for 91 $A1.11. https://thebull.com.au/petrol-prices-lift-the-most-in-13-weeks/?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+19+ May+2020

We are being fleeced like sheep and milked like dairy cows. Its highway robbery, lots of stations around here charging $1.90+, saw one the other day at $2.009, no surprise it was a Z station, they're the most common offender when it comes to overcharging.

[dreamcatcher]

Average price in Australia for 91 $A1.11. https://thebull.com.au/petrol-prices-lift-the-most-in-13-weeks/?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+19+ May+2020

We are being fleeced like sheep and milked like dairy cows. Its highway robbery, lots of stations around here charging $1.90+, saw one the other day at $2.009, no surprise it was a Z station, they're the most common offender when it comes to overcharging.

Biggest fleecer would be NZ Government I would think .......... reducing fuel prices would entail selling more volume imo?

[dameofdiv]

Can prebuy fuel on this Z energy app at lowest price in your area and save some bucks for those interested.

https://sharetank.co.nz/
https://z.co.nz/about-z/news/general-news/sharetank-gives-kiwis-control-to-pre-purchase-fuel-on-their-terms/

[sb9]

Biggest fleecer would be NZ Government I would think .......... reducing fuel prices would entail selling more volume imo?

Agree 100%, almost close to $1 of current pump price is accounted for some sort of Govt tax take, figure that...

[Cyclical]

Can prebuy fuel on this Z energy app for $1.60 per litre. Save some bucks for those interested.

https://sharetank.co.nz/
https://z.co.nz/about-z/news/general-news/sharetank-gives-kiwis-control-to-pre-purchase-fuel-on-their-terms/

That's interesting. How far in advance can you buy it (sorry, too busy to check Ts & Cs atm)? Looks like a better investment than ZEL shares ;)

[dameofdiv]

That's interesting. How far in advance can you buy it (sorry, too busy to check Ts & Cs atm)? Looks like a better investment than ZEL shares ;)

Allow me to explain better, this app helps search for best priced fuel around your locality and allow you to pre-buy fuel at that price anytime and use it later at any Z station.
It allows you to prebuy up to 1,000 litre at any point of time.
No time limits on when you need to use up the pre-bought fuel (will not expire) but as sharetank is a trial product, it will notify at least 3 months in advance if this trial product was to be ended.

p.s. $1.60 is where I last locked in the fuel litres and still using it today. I have edited above to avoid confusion.

[Cyclical]

Allow me to explain better, this app helps search for best priced fuel around your locality and allow you to pre-buy fuel at that price anytime and use it later at any Z station.
It allows you to prebuy up to 1,000 litre at any point of time.
No time limits on when you need to use up the pre-bought fuel (will not expire) but as sharetank is a trial product, it will notify at least 3 months in advance if this trial product was to be ended.

p.s. $1.60 is where I last locked in the fuel litres and still using it today. I have edited above to avoid confusion.

Nice one. Thanks.

[Mya]

Biggest fleecer would be NZ Government I would think .......... reducing fuel prices would entail selling more volume imo?

I see this opinion on the News by people constantly and I don't get it.

Fuel tax is used to fund roading projects. Those that use the roads more pay proportionally more for the roads than those that don't.

The alternative is to get rid of a fuel tax altogether and increasing income taxes so everyone loses, even those without cars.

At the end of the day unless you drive excessively (or not at all) the fuel tax is fairly irrelevant because the govt will get this tax out of you one way or another.

[Antipodean]

The fuel tax is mostly used for projects through the National Land Transport Fund (~90%). GST is added on top (including GST on the fuel tax itself), and some ACC/local govt slices.

However the National Land Transport Fund can and does invest in non-roading projects such as Public transport,transitional rail& rapid transit, Walking & cyclingimprovements, and what they call Miscellaneous (from their own 2019 report). So those that use roads more, pay into non-roading projects more also. There are more alternatives to fuel taxes than simply income taxes (RUC's being a local example).

The issue is not so much in that road taxes are collected this way, but it means you cannot directly compare say Australian and NZ fuel prices as they fund infrastructure differently. NZ uses fuel taxes heavily. Therefore it is relevant to include discussions of NZ govt fuel taxes in discussions of prices, however you to like to lean on the issue.

According to the AA - "Currently, just under a third of the pump price is the actual cost of refined petrol while about 50% is tax i.e. 63.784 cents per litre in fixed excise" (not including GST, regional excise, emissions trading schemes levy). As the overall price of fuel decreases, this fixed regulatory component of the fuel cost increases in proportion.

[peat]

Commercial fuel sales such as jet and marine have actually gone down this week ending 17th May cf compared to previous so I'm thinking that there may have been a bit of catch up in the earlier figures , so this weeks numbers give more indication of future demand.
Other than Trucks (which haven't gone down much at all) the other main categories , petrol and diesel retail are sitting about 2/3rds of average prior to Covid19 now.

[Bjauck]

I see this opinion on the News by people constantly and I don't get it.

Fuel tax is used to fund roading projects. Those that use the roads more pay proportionally more for the roads than those that don't.

The alternative is to get rid of a fuel tax altogether and increasing income taxes so everyone loses, even those without cars.

At the end of the day unless you drive excessively (or not at all) the fuel tax is fairly irrelevant because the govt will get this tax out of you one way or another.

Fuel taxes are a regressive tax insofar as it forms a much greater proportion of the income of the poorer. And yet if you transfer the burden to income taxes, those who are income poor but asset and capital gains rich, get a free ride, literally!

We all end up paying for fuel taxes, even those without cars, to a degree as it affects all manner of costs.

[Cyclical]

Fuel taxes are a regressive tax insofar as it forms a much greater proportion of the income of the poorer.

That's exactly it. And often those in that category are the ones driving thirsty old Aussie tanks and the like as that's all they can afford. Meanwhile the likes of my well-heeled neighbour drives his nice PHEV Audi into town and back without it even starting the ICE...how many roading projects is he funding?

[dreamcatcher]

Ouch!! ..... this pup becoming painful and SP feels like I am paying staffs weekly wages.

[Beagle]

I agree SylvesterCat, BP's food offer is quite substantially better than ZEL and I have never understood why ZEL or Caltex have never had 98 Octane when many higher performance European cars require this fuel. Go figure ? Its like they have their head in the sand in this regard. ZEL have been the least extreme in their "milking" of motorists with the premium they've asked for 95 Octane but with price display coming its clear that further pressure is coming on their 95 Octane fuel margin. Just annualising apparent forecast 4th quarter margin's gives an interesting heads-up into possible earnings downside for FY21. Start factoring in reduced margins from premium fuel, ever increasing competition for the unmanned minnow station players, Govt action of wholesale pricing and requirements for increased jet fuel storage at Wiri and the steady roll-out of EV's, I agree 100%, the downside risk looks quite significant.

More concerning as you suggest is their cost structure and I really don't think one can rely on management to be proactive in cutting their cloth to suit the new reality that appears to be rapidly unfolding. Management have a history of "shocking" the market with downgrades both to earnings and dividends so anyone relying on 40 cps fully imputed annual dividends is taking a big risk as to its sustainability.

I can easily foresee that 3.5 cpl margin coming down to ~ 2 cpl in FY21.

This post from 27 January 2020 is still how I see this one. Back then I questioned the sustainability of their dividend and sure enough it got cancelled.
This really is a horrible industry and best avoided. I see they have no guidance for FY21...I am not surprised as they probably have no idea what they'll make, if anything. No dividend until at earliest October 2021. I cannot see the investment case and am quite frankly very surprised they managed to tap the market so successfully for such a large capital raise. If ZEL can recapitalise their leaking old boat that's operating in a sunset industry, there's hope for almost everyone else !

[Cyclical]

Ouch!! ..... this pup becoming painful and SP feels like I am paying staffs weekly wages.

That's pretty much what you are doing init. It's not like the funds are being directed towards company growth, it's just a let's keep our heads above water fund.

[Cyclical]

This post from 27 January 2020 is still how I see this one. Back then I questioned the sustainability of their dividend and sure enough it got cancelled.
This really is a horrible industry and best avoided. I see they have no guidance for FY21...I am not surprised as they probably have no idea what they'll make, if anything. No dividend until at earliest October 2021. I cannot see the investment case and am quite frankly very surprised they managed to tap the market so successfully for such a large capital raise. If ZEL can recapitalise their leaking old boat that's operating in a sunset industry, there's hope for almost everyone else !

Agreed, although I think the sunset is still at least a couple of decades or so away...I'm not convinced a fully electrified fleet is viable, but then maybe given time, technology will have the answers. Ordinarily they'd probably do quite nicely with the low oil price/volatility, but not with the supply/demand ratio so out of whack atm. Plus the refinery is likely a big handbrake too in the present circumstances. It's especially hard for this industry with the COL. Although it's interesting that the ACC continues to increase their stake.

[Beagle]

Yeap, its a long sunset, but a sunset industry nonetheless and all the time ICE vehicles will need to meet much tougher mandated Euro emissions requirements which will see a proliferation of hybrid propulsion systems in the years ahead. Heck even Mercedes-Benz AMG (add more grunt) division are going hybrid. (That's sad). I doubt jetfuel demand will return to its former level for many years either. The trend now is towards contactless service so unmanned stations with contactless payment might have an advantage going forward, just bring your own gloves for handling the fuel bowser ! I see the market share of the minnows continuing to expand and ZEL market share continuing to be eroded going forward.

[Jim]

Ouch ! Closed at $2.85

[Baa_Baa]

Some might say “Un-investable”. Fair enough, it does looked pretty screwed at the moment.

Others might just simplify that to “better opportunities elsewhere”.

No point in exposing ones investment to great uncertainty when less uncertainty affords itself.

Imo, not interested in zel at the moment

[Cyclical]

$2.78 at present. What happens if it dips below $2.75?

[macduffy]

$2.78 at present. What happens if it dips below $2.75?

The Shares will be issued at the lower of the price paid by investors in Z Energy’s recent
Placement, being NZ$2.90 per Share, and a 2.5% discount to the five day VWAP of Z shares
traded on NZX during the five NZX trading days up to, and including, the Closing Date.

[Jim]

It closed at $2.80, the price to pay will be $2.80 plus 2.5% discount i.e. $ 2.73, am I right or $2.90 plus 2.5% discount.

[macduffy]

It closed at $2.80, the price to pay will be $2.80 plus 2.5% discount i.e. $ 2.73, am I right or $2.90 plus 2.5% discount.

Assuming the Volume Weighted Average Price of Z shares traded on the NZX during the five NZX trading days up to and including the Closing Date, 29 May, turns out to be $2.80, then the issue price would be $2.73.

[flyer]

Volumes are rising as per their latest OPSTAT so looking a lot better. However given the current share price I wont be participating in the SPP given the buy price will be approx what it is now less 2.5%.

[Grimy]

Agreed. I'm also not applying for any.

[tango]

Same. It feels like it's just throwing good money after bad. Too long a time horizon and too much uncertainty

[Cyclical]

Volumes are rising as per their latest OPSTAT so looking a lot better. However given the current share price I wont be participating in the SPP given the buy price will be approx what it is now less 2.5%.


Agreed. I'm also not applying for any.


Same. It feels like it's just throwing good money after bad. Too long a time horizon and too much uncertainty

Crikey, there will be some trouble is that's the general sentiment of their holders towards the SPP.

[bull....]

volumes have not returned to normal even though we in level 2 so looks like people are not driving as much. people working from home still ? or people not sunday driving ?

[macduffy]

Crikey, there will be some trouble is that's the general sentiment of their holders towards the SPP.

I don't think so. The SPP is only $60m, the institutional placement was $290m, fully subscribed.

[Teatree]

Feels like traffic levels are back to pre lockdown in auck.

[Joshuatree]

Yeah, i hate level two, No traffic jams at all in level three, now they are the norm here again.:scared:

[dreamcatcher]

Mark Roy Malpass acquisition 15,000 @ $3.05

[peat]

my chart tea leaves say it will go to $3.50 or close to, but I aint got the guts to try it.
I know I'm going to burn lots of fuel over the next few months, we're planning Sth Island Rd trip yay, but I dont think the industry metrics will be looking promising again until all the planes are back flying and that could take ages.

[tango]

Is anyone investing in the SPP? I am not touching it

[dibble]

Is anyone investing in the SPP? I am not touching it

I cant see the attraction at this price. Was gonna dump my last few recently but as I see it the big boys have pumped a whole load of money in at market value to prop the company up so I might just ride that buffer to beyond the current storm....

Interestingly I listened to a BBC interview about Macron's electric car initiative, the interviewee was not sanguine on any significant uptake of electric cars unless western govts offer large subsidies.... something that is probably low spending priority at the moment. So petrol likely to remain dominant for a while.

[tango]

I cant see the attraction at this price. Was gonna dump my last few recently but as I see it the big boys have pumped a whole load of money in at market value to prop the company up so I might just ride that buffer to beyond the current storm....

Interestingly I listened to a BBC interview about Macron's electric car initiative, the interviewee was not sanguine on any significant uptake of electric cars unless western govts offer large subsidies.... something that is probably low spending priority at the moment. So petrol likely to remain dominant for a while.

I thought this government being heavily influenced by the Greens would have done more to promote electric cars and put money into the power companies. I bought ZEL for the dividends (cough cough) on the advice of my broker. Sigh...

[Cyclical]

Interestingly I listened to a BBC interview about Macron's electric car initiative, the interviewee was not sanguine on any significant uptake of electric cars unless western govts offer large subsidies.... something that is probably low spending priority at the moment.

I hope we don't see that here. EV owners are already being massively subsidised here by way of the taxes the rest of us pay for the dino juice.

[Beagle]

https://www.stuff.co.nz/business/121654030/south-island-fuel-retailer-npd-steps-into-north-island

Something I have suspected for months. Aucklanders are the ones currently being "fleeced". Bring it on !!

[k14]

https://www.stuff.co.nz/business/121654030/south-island-fuel-retailer-npd-steps-into-north-island

Something I have suspected for months. Aucklanders are the ones currently being "fleeced". Bring it on !!
Further reinforces my belief that the Z model of higher margins and making money from purchases in the shop is dead. Too much competition and self service pumps are spreading like wildfire withZ/Caltex/Mobil/BP are asleep at the wheel. NPD, Waitomo, Allied, Gul and Mckeowns have been able to build their no-frills stations and the customer is going for the lower price point. Without tourism the mainstream players will suffer more (tourists are more likely to pay higher prices as they don't know what is the norm). Add to this the terrible investments Z have made (Flick has been written down to ~half of what they paid) and don't see much light at the end of the tunnel.

Just my 2c anyway, disc - non holder.

[Sideshow Bob]

Further reinforces my belief that the Z model of higher margins and making money from purchases in the shop is dead. Too much competition and self service pumps are spreading like wildfire withZ/Caltex/Mobil/BP are asleep at the wheel. NPD, Waitomo, Allied, Gul and Mckeowns have been able to build their no-frills stations and the customer is going for the lower price point. Without tourism the mainstream players will suffer more (tourists are more likely to pay higher prices as they don't know what is the norm). Add to this the terrible investments Z have made (Flick has been written down to ~half of what they paid) and don't see much light at the end of the tunnel.

Just my 2c anyway, disc - non holder.

The self-service providers have spread like wildfire in the South Island, and to a lot of places where traditionally have been completely fleeced by the big fuel companies and/or had their pumps removed.

Places like Twizel, Lumsden, Dunback, Ettrick, Ranfurly, Otematata, Glenavy, Kingston, Clinton, Centre Bush etc. I never go to Z or Caltex or the like unless I have to and have no choice. Why would you?

Dead right about the tourists K14 - Caltex/BP in Wanaka have always been about 40-50c per litre for diesel and about 20-25 for petrol more than the local self-service - less than 1Km away.

Now with no tourists to fleece suddenly only 6c dearer...….:p

[k14]

The self-service providers have spread like wildfire in the South Island, and to a lot of places where traditionally have been completely fleeced by the big fuel companies and/or had their pumps removed.

Places like Twizel, Lumsden, Dunback, Ettrick, Ranfurly, Otematata, Glenavy, Kingston, Clinton, Centre Bush etc. I never go to Z or Caltex or the like unless I have to and have no choice. Why would you?

Dead right about the tourists K14 - Caltex/BP in Wanaka have always been about 40-50c per litre for diesel and about 20-25 for petrol more than the local self-service - less than 1Km away.

Now with no tourists to fleece suddenly only 6c dearer...….:p
Yeah it is crazy. Jump on app Gaspy right now diesel is 98c a litre vs $1.26 at Z and $1.30 at Caltex in Alexandra. Pretty similar for petrol although the discrepancy is down to 14c. In Cromwell, diesel is 13c cheaper at Allied than Z/BP. This is happening all around the SI. Crazy that the NI is so much less competitive even though there is the Gul effect.

Yes you can get some discounts by jumping through hoops at BP/Caltex/Z but why bother when you can just drive up to Mckeowns any time of the day and save more anyway?

Also, Z own flybuys, wonder how much that has been written down in the last few years? Then the NZRC ownership, how are they going to turn that around? Couldn't make a profit when they were basically unaffected by COVID, how will they make one now?

[Beagle]

Little known fact is Gull is owned by Caltex Australia who are fleecing Kiwi's in the north island just like the others are. Its usually cheaper after the discount scheme to fill up at my local manned Mobil station that includes a subway outlet therein rather than the unmanned Gull station just up the road from where I live. The local ZEL is almost always the most expensive around here by a considerable margin.

[macduffy]

Little known fact is Gull is owned by Caltex Australia who are fleecing Kiwi's in the north island just like the others are. Its usually cheaper after the discount scheme to fill up at my local manned Mobil station that includes a subway outlet therein rather than the unmanned Gull station just up the road from where I live. The local ZEL is almost always the most expensive around here by a considerable margin.

I understood that Caltex NZ is owned by ZEL, not by Caltex Australia?

[Jay]

You are right macduffy, however 2 different companies- as beagle says Gull owned by Caltex Aussie who do not own Caltex NZ - go figure!

[Cyclical]

https://www.stuff.co.nz/business/121654030/south-island-fuel-retailer-npd-steps-into-north-island

Something I have suspected for months. Aucklanders are the ones currently being "fleeced". Bring it on !!

Cracks me up how we still refer to is as "unleaded 91" in this country...when could you last buy leaded fuel?

Be nice to see some more competition for 98. A lot more cars on our roads should be running that than currently, but due to lack of understanding and the extra "fleecing" re 98, people are putting engines that really should be run on the higher grade stuff at risk.

[macduffy]

You are right macduffy, however 2 different companies- as beagle says Gull owned by Caltex Aussie who do not own Caltex NZ - go figure!

Exactly. If we're being fleeced by Caltex NZ, we're being fleeced by our own countrymen/women. Of course, the biggest shears are being wielded by H M Govt!

Edit; Apologies for misinterpreting Beagle's post, having read some unintended ambiguity into it.!

:blush:

[tango]

“ Z Energy Limited (NZX/ASX:ZEL) ("Z") is pleased to announce that its NZ$60 million share purchase plan ("SPP") has closed. The SPP received strong shareholder support with Z receiving applications totaling approximately NZ$57.5 million.”

The price was $2.806

I guess this means most people got what they applied for. Did anyone here apply?

[dreamcatcher]

“ Z Energy Limited (NZX/ASX:ZEL) ("Z") is pleased to announce that its NZ$60 million share purchase plan ("SPP") has closed. The SPP received strong shareholder support with Z receiving applications totaling approximately NZ$57.5 million.”

The price was $2.806

I guess this means most people got what they applied for. Did anyone here apply?


Yep I did nearly my full amount

[tango]

I didn’t realise the shares were allocated yet

[dreamcatcher]

I didn’t realise the shares were allocated yet

4th - 5th June allocation

[tango]

Right. Well you will likely get all that you applied for!

[King1212]

Hhaha..the only share that has not rebound yet....so.... people will be soon flocking in ZEL.....

[silverblizzard888]

Basically only the cap raise holding this down. It'll eventually get the THL treatment soon.

[Stranger_Danger]

Basically only the cap raise holding this down. It'll eventually get the THL treatment soon.

The Government will start giving their subsidiaries millions of dollars?

Actually, I should shut up before I give them ideas.

[King1212]

Oz loves it up 4%.....cars are pumping petrol now....all Petrol consumption are back to normal except airlines

[Soarin]

When / how do we found out our allocation? We should get what we asked for right?

[dreamcatcher]

When / how do we found out our allocation? We should get what we asked for right?

No allocation 50K limit .............check your email

[theace]

Link now showing allocations.

[Soarin]

Got it - thanks.

[Waikaka]

I have participated in the SPP and getting enough ZEL in the portfolio I better start looking into Z more.

I suspect that with the balance sheet now pretty much improved and NZ'rs now back up running their cars around town buying junk we will see a steady return to volume sales. However the aviation side of the business is going to impacted longer term. How much of a problem would it be if that sales stream dropped out of the business?

In 2020 annual report they said:
2,294m litres sold to commercial customers (49%)
1,543m litres sold to retail customers (33%)
843m litres of jet fuel (18%)

They also note that Aviation fuel is the lowest margin product they sell, so hopefully less than 15% decline in earnings but who knows.

Not ideal but at the current share price happy that there is a decent discount even if the aviation fuels business is severely impacted long term.

Bit concerned about them throwing their toys out of the cot re terminal gate pricing. Long been a understanding that using each other infrastructure collaboratively to balance supply and demand is good for everyone but suspect as these smaller low service retailers are cutting the big guys lunch they are going to throw them under the bus.

Statement below from their 2020 annual report

"Z has just over 45 percent fuel market share in New Zealand, but just over 50 percent of terminal storage.We’re more than pulling our weight.Progressively, expect Z to continue to step back from the established fuel industry sharing arrangements in which fuel and terminals were shared and move much more onto a solid commercial footing.

We’ve already started. We have exited the industry sharing arrangements at Nelson, as a starting point. If fuel companies, including new wholesale fuel suppliers, want fuel at Nelson, we will sell it to them on commercial terms at a price that reflects the capital costs of the terminals. That’s fair and reasonable.

What we don’t want to do anymore is provide fuel to competitors with no assets in an area at zero margin for them, to then on-sell to distributors at a cost we can’t even provide to our own retail/commercial networks.That’s distorting the operation of a proper market, rewarding a lack of investment and failing to see investments adequately rewarded."

[Cyclical]

I have participated in the SPP and getting enough ZEL in the portfolio I better start looking into Z more.

I suspect that with the balance sheet now pretty much improved and NZ'rs now back up running their cars around town buying junk we will see a steady return to volume sales. However the aviation side of the business is going to impacted longer term. How much of a problem would it be if that sales stream dropped out of the business?

In 2020 annual report they said:
2,294m litres sold to commercial customers (49%)
1,543m litres sold to retail customers (33%)
843m litres of jet fuel (18%)

They also note that Aviation fuel is the lowest margin product they sell, so hopefully less than 15% decline in earnings but who knows.

Not ideal but at the current share price happy that there is a decent discount even if the aviation fuels business is severely impacted long term.

Bit concerned about them throwing their toys out of the cot re terminal gate pricing. Long been a understanding that using each other infrastructure collaboratively to balance supply and demand is good for everyone but suspect as these smaller low service retailers are cutting the big guys lunch they are going to throw them under the bus.

Statement below from their 2020 annual report

"Z has just over 45 percent fuel market share in New Zealand, but just over 50 percent of terminal storage.We’re more than pulling our weight.Progressively, expect Z to continue to step back from the established fuel industry sharing arrangements in which fuel and terminals were shared and move much more onto a solid commercial footing.

We’ve already started. We have exited the industry sharing arrangements at Nelson, as a starting point. If fuel companies, including new wholesale fuel suppliers, want fuel at Nelson, we will sell it to them on commercial terms at a price that reflects the capital costs of the terminals. That’s fair and reasonable.

What we don’t want to do anymore is provide fuel to competitors with no assets in an area at zero margin for them, to then on-sell to distributors at a cost we can’t even provide to our own retail/commercial networks.That’s distorting the operation of a proper market, rewarding a lack of investment and failing to see investments adequately rewarded."

Does anyone know if the aviation fuel is a necessary by product of the refining process (and thus we potentially have a storage issue), or can they easily amend the formulas to align with supply and demand of the different products?

[Waikaka]

Does anyone know if the aviation fuel is a necessary by product of the refining process (and thus we potentially have a storage issue), or can they easily amend the formulas to align with supply and demand of the different products?


Interesting question, refineries can alter the type of crude imported, to alter what products are produced. NZR uses heavy sour and is set up for it so not easy to change.

NZR produced about 85% of our pre-covid jet fuel demand, the rest was imported.

From what I can figure historically NZR makes a jet/DPK (dual purpose kerosene) cut of about ~15% on their bulk crude imported, perhaps it has changed since refinery upgrades. In cracking the fuel they have to produce off lighter fractions and yes it will become a headache:

https://www.odt.co.nz/star-news/star-business/global-fuel-glut-cost-nz-companies-millions

However in ZEL case it is not a big worry with the plant just barely running until August, I don't think they will have storage problems. DPK is pretty versatile so I suppose if you had to you could export it.

I am learning more about refining than I ever wanted to (see NZR thread).

[Oliver Mander]

Does anyone know if the aviation fuel is a necessary by product of the refining process (and thus we potentially have a storage issue), or can they easily amend the formulas to align with supply and demand of the different products?

NZR is a 'mid-distillate' refinery - so it's very good at producing diesel and jet fuel. So yes, lack of Jet fuel consumption will cause a headache...but it is worth noting that it does not produce enough Jet (or Petrol) to supply the entire country normally...most of NZR's Jet goes down to the pipeline to Auckland, with (usually) Christchurch and Wellington relying on jet fuel imports to their terminals. So the refinery will only hurt if the total jet fuel consumption on a national basis falls below what Auckland usually uses (from memory, about 65% of the national total).

[Simsee]

Hi
Anyone received confirmation of strike price or allocations for the recent share issue? Ive seen nothing

[BreaKerNZ]

Hi
Anyone received confirmation of strike price or allocations for the recent share issue? Ive seen nothing

$2.806 per share, I received my full allotment.

[Jim]

Hi
Anyone received confirmation of strike price or allocations for the recent share issue? Ive seen nothing

Shares allocated on 6 June at $2.806 a piece

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/NZR/355190/325145.pdf

To me this reads like ZEL's major stake in NZR has little if any value and they can expect very little if any profit from their share of NZR's earnings going forward.
Market seems to agree with ZEL starting to plumb new lows. Only reason to ever own this company, (in my view was for the dividends) and with no dividends until at least October 2021, (by which stage they may have lost significant further market share to the minnows with their unmanned stations) one wonders what sort of annual dividend they might be capable of paying in the future, (if any with their substantial debt burden). Brokers on average think 33 cents per share from FY22, see https://www.marketscreener.com/Z-ENERGY-LIMITED-14473098/financials/
If I agreed I would be a buyer for the incredible yield of 33 cents fully imputed = 33 / 0.72 = 45.83 cents gross / $2.75 = incredible gross projected FY22 yield of 16.67% but if something sounds too good to be true, then...it's probably hogwash.

Looking at the 3 year chart, you'd have to be "brave" to hold this one...so much value destroyed in the last 3 years...really one wonders if management have any answers ? 11719
Good luck to holders, I think you are going to need it.

[peat]

And the weekly report figures from 24th are not showing any further material improvement in volume in any of the classes - the current levels would appear to me to be about 90% of pre covid and stagnant at best
Except for jet fuel which is climbing slowly but still only at 30%

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12342949 Paywalled article - Very challenging.

[tango]

I'm wishing I had sold some shares at the recent high ;)

I will be hoping the most recent week's volume trade is up.

[trader_jackson]

and the raising is to be kicked off at $2.75? I wouldn't pay $2 for the shape Z Energy is in... income uncertain and in recovery mode for the next few years, no dividend now till (crossing fingers) FY22 and dividends unlikely to be as big as they were for a very long time, 6 cent NTA topped off by a terrible balance sheet post capital raising (putting it lightly)

Just thought I'd check in to see how this SPP had gone and just over 2 months later, it hasn't gone well... while most SPP's are trading at a health premium, ZEL is trading at a decent discount to the $2.90 the raising was done at. No surprise really, but interesting to check up on.

[Paradox]

Just thought I'd check in to see how this SPP had gone and just over 2 months later, it hasn't gone well... while most SPP's are trading at a health premium, ZEL is trading at a decent discount to the $2.90 the raising was done at. No surprise really, but interesting to check up on.

If one looks at a recovery in 3-4 years, then ZEL is trading at a big discount to fair value. If you can look past the lack of dividend, then patience will be rewarded.

My strategy is to go long on their shares and short the derivatives.

[King1212]

One always said go long....but when the market lost 1/3 of the value as what people predict this end of the year....what would u do when u see your capital under water for 3 to 4 years?

[Paradox]

One always said go long....but when the market lost 1/3 of the value as what people predict this end of the year....what would u do when u see your capital under water for 3 to 4 years?

yes, if your $$ can get a better return elsewhere in the meantime, then it is a no-brainer to sell out and return in a year.

From what I could see, the balance sheet is looking better now, management is turning things around, gross margin increasing (?)...

Just need the tourism back. Waiting game....

Disc: have a small holding

[BlackPeter]

Just thought I'd check in to see how this SPP had gone and just over 2 months later, it hasn't gone well... while most SPP's are trading at a health premium, ZEL is trading at a decent discount to the $2.90 the raising was done at. No surprise really, but interesting to check up on.

My thoughts as well. Pretty shocking SP trend. Looks like a textbook example for a downtrend and Covid was just the icing on the cake.

SP still a year ago above $7, SPP 2 months ago at $2.90 and further slip to $2.74 now.

11792

Question is where are they going from here? Unlikely the newly build discount petrol stations going away anytime soon. Here go the margins. Unlikely traffic through tourism recovers anytime soon (and unlikely ever to the previous 100%). Here goes the volume. Unless National takes over unlikely as well we see a significant investment into roads vs rail and boat, but instead into greener methods of transport. Another nail into ZEL's coffin.

While they might allow for some trading gains at some stage in the future, in my view unlikely they can sustainably recover. Decided to move the ticker from my "maybe at some stage again" watch list to my "just for curiosity" watch list. Last station before they disappear into the share ticker nirvana.

[Beagle]

These guys are growing very fast https://www.npd.co.nz/npd-announces-north-island-expansion-plans/

I have called ZEL a SELL for a very long time now and have been right. I have increasingly taken a dim view of their management capability and overhead cost structure.
I see it going lower and testing all time $2.50 lows in due course. Without a dividend until at earliest October 2021 in my view there's highly likely to be more bad news about market share and margin erosion before then and any dividends the company may be able to pay in the future are likely to be a pale shadow of what they were previously.

Jet fuel demand recovery is highly likely to excruciatingly slow and unlikely to ever recover to previous level's.

The company still has massive debt and shareholders appear to be on a journey with this one that ostensibly amounts to a hiding to nothing.
As BP has noted above the chart looks absolutely terrible.

[Leftfield]

I'm with Beagle and Black Peter on Z. To me Z is a classic dividend yield trap where holders cling to their holding in the face of a declining SP justifying it by the possibility of a dividend.

If holders lift their eyes, they will see lots of headwinds for Z which the company is not facing up to. Frankly your investment in what was once seen as a 'safe and secure' investment is no longer either.

(Disc - never held Z. )

[Paradox]

I'm with Beagle and Black Peter on Z. To me Z is a classic dividend yield trap where holders cling to their holding in the face of a declining SP justifying it by the possibility of a dividend.

If holders lift their eyes, they will see lots of headwinds for Z which the company is not facing up to. Frankly your investment in what was once seen as a 'safe and secure' investment is no longer either.

(Disc - never held Z. )

Market viewed today’s operational update very positively. 5% gain. There’s still a lot of upside next year.

[Cyclical]

As BP has noted above the chart looks absolutely terrible.

When BP says there are issues in the petroleum sector, we really need to sit up and listen :-)

[Paradox]

When BP says there are issues in the petroleum sector, we really need to sit up and listen :-)

Huge volume going through the last two days and a further gain today. Instos buying ...

[sb9]

Huge volume going through the last two days and a further gain today. Instos buying ...

Absolutely, one or two big boys building up a decent stake here...

[tango]

This article on switching more vehicles to electricity is interesting. I think a lot of people believe you can just wave a magic wand and change the fleet vehicle but this article goes into it in some depth and shows that it will take decades. Of course, that could all change of a green government came in but as it stands… A 10% uptake by the end of 2030. Those are the same figures that Z energy is working on

https://www.newsroom.co.nz/will-aucklands-drivers-go-electric

[BlackPeter]

This article on switching more vehicles to electricity is interesting. I think a lot of people believe you can just wave a magic wand and change the fleet vehicle but this article goes into it in some depth and shows that it will take decades. Of course, that could all change of a green government came in but as it stands… A 10% uptake by the end of 2030. Those are the same figures that Z energy is working on

https://www.newsroom.co.nz/will-aucklands-drivers-go-electric

It took New York in the first decade of the last century about 6 years to change traffic from 90% horse carts to 90% vehicles with combustion engine. Sure - for the whole of the US this process took 23 years (as per Dr. Google).

So yes, we are not the US, and our current old bangers are not horse carts ... but I think the main issue is how much cheaper (and better) the alternative will be. Currently it is something like 25 to 80 cents per km to drive a car. If we assume that the cost for driving electric cars will stay in that same order of magnitude, then the models are probably right.

However - the cost for batteries (the most expensive part of an electric car) are dropping by more than 10% per year (*). Given that apart from the battery costs electric cars are so much cheaper to both manufacture and maintain (ways less parts, less maintenance and cheaper fuel cost than cars with combustion engine) it won't be long that the whole of life costs of an electric vehicle are considerable cheaper than for a conventional car. If it would be just say 12 to 40 cents a km to drive an electric vehicle (likely in 10 years based on current development of battery prices), how long do you need to make the change?

This is the time when NZ will get rid of its fleet of old bangers, because many won't be able anymore to afford driving a car with combustion engine.

(*) from https://www.greencarreports.com/news/1126308_electric-car-battery-prices-dropped-13-in-2019-will-reach-100-kwh-in-2023:


From 2010 to 2019, lithium-ion battery prices (when looking at the battery pack as a whole) have fallen from $1,100 per kilowatt-hour to $156/kwh—an 87% cut. From 2018 to 2019 alone, that represents a cut of 13%.

Actually - I think the current increase of old vehicles in our fleet is a good indication that consumers expect this change to happen soon. Nobody wants to buy anymore a new car with combustion engine, because in 10 years they won't have any material resale value anymore.

[tango]

It took New York in the first decade of the last century about 6 years to change traffic from 90% horse carts to 90% vehicles with combustion engine. Sure - for the whole of the US this process took 23 years (as per Dr. Google).

So yes, we are not the US, and our current old bangers are not horse carts ... but I think the main issue is how much cheaper (and better) the alternative will be. Currently it is something like 25 to 80 cents per km to drive a car. If we assume that the cost for driving electric cars will stay in that same order of magnitude, then the models are probably right.

However - the cost for batteries (the most expensive part of an electric car) are dropping by more than 10% per year (*). Given that apart from the battery costs electric cars are so much cheaper to both manufacture and maintain (ways less parts, less maintenance and cheaper fuel cost than cars with combustion engine) it won't be long that the whole of life costs of an electric vehicle are considerable cheaper than for a conventional car. If it would be just say 12 to 40 cents a km to drive an electric vehicle (likely in 10 years based on current development of battery prices), how long do you need to make the change?

This is the time when NZ will get rid of its fleet of old bangers, because many won't be able anymore to afford driving a car with combustion engine.

(*) from https://www.greencarreports.com/news/1126308_electric-car-battery-prices-dropped-13-in-2019-will-reach-100-kwh-in-2023:



Actually - I think the current increase of old vehicles in our fleet is a good indication that consumers expect this change to happen soon. Nobody wants to buy anymore a new car with combustion engine, because in 10 years they won't have any material resale value anymore.

I not sure you can compare shifting from horse and cart to vehicles

There's a turning point when the masses follow the early adopters and we are a long way away from it here. When batteries last for longer EVs will be more popular for sure.

Style is part of it. The Tesla is more stylish than the little economical boxes that first come out and the cars do more miles now before needing recharging. When EVs are both economical and stylish you will see more uptake.

I haven't replaced my car but that has nothing to do with EV. I have been putting my spare $$$ into the share market ;) and my vehicle is relatively low km so there's no need to replace it. I have my eye on a gas guzzler to replace it when I do :D

[Cyclical]

I not sure you can compare shifting from horse and cart to vehicles

There's a turning point when the masses follow the early adopters and we are a long way away from it here. When batteries last for longer EVs will be more popular for sure.

Style is part of it. The Tesla is more stylish than the little economical boxes that first come out and the cars do more miles now before needing recharging. When EVs are both economical and stylish you will see more uptake.

I haven't replaced my car but that has nothing to do with EV. I have been putting my spare $$$ into the share market ;) and my vehicle is relatively low km so there's no need to replace it. I have my eye on a gas guzzler to replace it when I do :D

Honda's little EV is a cracker and the sort of vehicle to change the market, IF the can get the price point right.

Otherwise I reckon PHEVs have got a lot of potential for the transition period.

[tango]

Honda's little EV is a cracker and the sort of vehicle to change the market, IF the can get the price point right.

Otherwise I reckon PHEVs have got a lot of potential for the transition period.

Yep. PHEV and EV will both increase in uptake but kiwis don’t seem to be rushing to upgrade at this stage...

ZEL need to have better long range plans...

[flyer]

Im quite surprised how many Tesla's you see now when driving around, seems to be more and more, in Auckland area anyway.