by BusinessDesk
The S&P/NZX 50 Index rose 15.67 points, or 0.1%, to 12,770. Turnover was $177.4 million.
Shareholders in the country’s only refinery voted Friday to convert the crude oil processing plant into an import terminal for refined fuel.
The decision followed a collapse in profitability as demand for all types of fuel crashed during the pandemic.
Refining NZ’s customer shareholders have paid about $118 million to subsidise the company over the past 18 months after covid-19 hit.
But even before the pandemic, the local refinery had been struggling to compete with more efficient refineries overseas.
With climate change forcing economies to stop burning fossil fuels, shareholders voted overwhelmingly in favour of ending refining.
Fuel retailer Z Energy, which owns a 15% stake in the refinery, saw its shares jump 5.5% to $3.05 – its highest share price since January, although still down a third from pre-pandemic levels.
Chief executive Mike Bennetts welcomed the vote saying it will unlock operational and financial opportunities for the company.
“It will mean a significant reduction in our working capital as we will hold less crude and will mean reduced earnings volatility from no exposure to refining margins meaning greater investor confidence,” he said.
Shares in New Zealand Refining were up 1.2% at 86 cents today, but still down 45% from before the pandemic.
Z also released its own internal assessment of long-term demand for liquid fuel which predicted demand would be higher than forecast by the Climate Change Commission.
“We believe that mode shift will not be as significant as the CCC forecasts; we believe local governments and NZTA will struggle to invest sufficiently to re-engineer public transport, walking and cycling infrastructure,” it said in a presentation.
The fuel company also took a more cautious view of technology advances and adoption of electric vehicles than the commission did.
Briscoe Group also saw its share price jump, up 4.4% to $6.00, after it said first-half net profit will be at least $46 million while reporting a 22.6% increase in first-half sales.
The homewares and sporting goods retailer's net profit for the previous first half was $28m, although impacted by the lockdown which closed stores for 50 days.
Rival retailer the Warehouse also got a share price bump, up 1.7% at $3.70, while clothing retailers Kathmandu fell 2.1% to $1.37 and Hallenstein Glasson fell 0.7% to $7.18.
Both the latter stocks are being hurt by continued lockdowns in most of Australia. The state of Victoria will be in a strict lockdown until next Thursday, alongside Queensland until Sunday and Greater Sydney until Aug 28.
Hallenstein Glasson currently has 37 stores closed across these locations, although the retailer said an increase in online sales helps to offset the impact.
Investore Property was unchanged at $2.02 after announcing it had entered into an unconditional agreement to purchase a large format retail property in Auckland for $36 million and had sold a Dunedin property.
The board said it now expects to pay an increased annual cash dividend of 7.90 cents per share, up 3.9% from 7.60 cents, assuming no further deterioration in economic conditions due to covid-19.
The kiwi dollar was trading 70.44 US cents at 3pm in Wellington, little changed from 70.47 cents yesterday.
The trade-weighted index was at 74.66 at 5pm, from 74.66 yesterday. The kiwi was trading at 95.35 Australian cents from 95.43 cents, 77.39 yen from 77.28 yen, 59.56 euro cents from 59.54 cents, 50.61 British pence from 50.74 pence, and 4.5526 Chinese yuan from 4.5550 yuan.
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