NZ Refining to review New Zealand's 'laziest balance sheet' 27 Apr 2012
- Cavalier's annual profit falls 13% Business
- MARKET CLOSE: NZ shares rise; Sky TV gains on earnings Business
- NZ dollar heads for 0.9% weekly drop before Jackson Hole Business
- UPDATE: Tower's minimum solvency reduced as claims progress Business
- Seeka more than doubles 1H profit on Opac sale gains Business
- UPDATE: Sky TV annual profit rises 21%, beating estimates Business
- Broadband customers reap benefits ahead of price cut: Spark Business
- Xero reaches 147,000 Australian customers Business
- Sky TV annual profit rises 21%, beating analyst estimates Business
- Vector profit down on price cuts, reduced energy consumption Business
New Zealand Refining’s board has promised to review its dividend policy, heading off a charge that investors bear the brunt of volatile earnings through gyrating payments and what one shareholder called “the laziest corporate balance sheet in New Zealand.”
The company that runs the nation’s only oil refinery needed small shareholder support in today’s crunch vote in Whangarei on a $365 million Continuous Catalyst Regeneration Platformer Project (CCR). The project required shareholder approval because of its size relative to NZ Refining’s market capitalisation of around $785 million.
Shareholders BP and Mobil, who hold 43 percent of the refinery’s shares, are understood to have opposed the CCR proposal, and the company mounted an unprecedented round of shareholder briefings to try to shore up a majority for the CCR.
If rejected, the refinery will still spend $105 million on a must-do upgrade to keep the refinery running past 2015.
The board’s most trenchant critic was former Contact Energy and Shell NZ director John Milne, who said it was “astonishing” that the company was in its 50th year of operation and “still has no dividend policy.” He criticised its policy of carrying almost no debt on its balance sheet.
Reduced dividends were identified as a major concern by other small shareholders, who depended on share income to meet living expenses.
However, chairman David Jackson appeared to expect the attack, announcing in his general remarks the board would later this year review the optimal gearing for the company, whose policy has been to completely repay debt raised for major projects at the expense of dividends.
While deleveraging had been prudent during the global financial crisis, the board and management would consider “whether this is appropriate for the long-term structure of the company.”
The review would be undertaken this year.
The touch and go vote occurred at 2pm, with a result to be announced to the NZX this afternoon. NZ Refining shares remain in trading halt in the meantime, having last traded at $2.75.
Craigs Investment Partners said in analysis this week the CCR option was the better of the two options, although it would prefer there was an option for delay, and warned there was no guarantee dividends would return to normal levels before 2020.
Milne said even though the company had substantial retained earnings, the board treated the payment of dividends as “purely discretionary.” Jackson, in turn, described NZ Refining as “highly cash-generative” despite the volatile impact of swings in global refining margins and the exchange rate on its profitability.
Milne also accused the board of failing to act transparently by refusing to reveal how many of the directors representing oil companies had opposed the CCR project, and to allow one of as many as four directors to explain to shareholders why they had objected.
Jackson would not allow such disclosures, saying communication should be directed through the chair and chief executive.
22 Aug 2014 News
Education Minister Hekia Parata has today welcomed an agreement with the union representing around 18,000 secondary school teachers... more
22 Aug 2014 Business News
Tower's minimum solvency reduced as Canterbury claims progress Aug. 22 (BusinessDesk) - Tower's minimum solvency margin has been ... more
20 Aug 2014 Business News
By Tina Morrison Aug. 20 (BusinessDesk) - Airways Corp. of New Zealand expects to boost profit 27 percent this year, after missing... more
22 Aug 2014 Entertainment
Mediaworks MEDIA RELEASEFOR IMMEDIATE RELEASE Friday 22 August, 2014 INXS Kicks in the TV Ratings, Tops the NZ Album ... more
14 Aug 2014 Property
New Zealand house sales fell in July as winter cooled the appetite of house hunters while a drop in properties selling for $400,000... more
7 Aug 2014 Property
Aug. 7 (BusinessDesk) - New Zealand property values rose at the slowest annual pace in 13 months in July as rising interest rates,... more
20 Aug 2014 Migration
Statistics NZ puts out detailed data on different ethnic groups, down to the 108 people from the Isle of Man. Did you know there are... more
19 Aug 2014 Travel & Tourism
Auckland has again been ranked the tenth most liveable city in the world. The Economist Intelligence Unit (EIU) has released its... more
22 Aug 2014 Rugby
Richie McCaw has compared the build-up to tomorrow's Bledisloe Cup test to the one which came following the All Blacks' thrashing at... more
19 Aug 2014 Opinion
Opinion - Martin Doyle Martin Doyle Cartoon: Doing Justice to the Election Given the dirty politics that have been exposed in... more
20 Aug 2014 People
We're expecting big things from Harman Grubisa, the new label from Auckland-based friends Madeleine Harman (right) and Jessica... more
22 Aug 2014 Recruitment
The loss of up to 100 jobs at Croxley stationery in Auckland is devastating news for their families and the local Avondale... more