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