Z Energy has cut its full-year earnings guidance by $30 million due to supply chain disruptions and high fuel prices.
The “weaker than expected performance” in the June quarter has seen a revised 2019 financial year EBITDAF earnings guidance of $420m to $455m for the company.
This is down from the previous range of $450m to $485m.
“Z’s operational performance for the first quarter of FY2019 has been negatively impacted by unexpected levels of disruption in our supply chain as well as being negatively impacted by the record high pump prices during the first quarter,” a company statement says.
It points to longer than expected delays following the Refining NZ maintenance shutdown as a key factor.
“The delay to restarting the refinery has meant a reduction in refining margin for the quarter, losses from unplanned fuel oil exports and necessitated increased volumes of imported product purchased on the spot market rather than Z’s advantaged term contract pricing,” the company says.
Rising fuel prices are also having an impact on profit margins.
“During the first quarter of FY19 oil prices have been rising consistently due to geopolitical issues, compounded by a weaker New Zealand dollar.”
It has seen crude prices rise 14% from US$67 per barrel at the start of April to finish the quarter at US$78 per barrel.
This was further impacted by a weakened NZ/US exchange rate with the NZ$1 being worth 72 US cents to 67 US cents at the end of the June quarter.
This saw NZ fuel prices hit a record high for 91 octane at $2.29 per litre in mid-May.
“This record high for New Zealand affected our retail market through compressed margins as well as reduced volumes,” the company says.
