Thursday 30th June 2016
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Z Energy still expects to cut annual costs by between $25 million and $30 million from its acquisition of Chevron New Zealand, and has started the process to sell 19 service stations which was a condition of the tie-up.
The newly-acquired Caltex business budgeted $16.5 million for offshore services from its Manilla, Philippines service hub, which Z will merge into the Wellington-based company's domestic operations, lowering financial operations, IT, and call centre costs, it said in a statement. Z also anticipates annual savings of $1.6 million moving Caltex's refined fuel procurement to its existing supplier.
The service station operator forecasts net savings of $1 million in the current financial year, rising to $10.3 million in 2017 and $13.8 million the following year. Z also affirmed the expected cost of achieving those savings to be $24 million of operating expenditure in 2017 and $9 million of capital expenditure.
Z bought Chevron's Caltex and Challenge! brands for $785 million, making it the country's biggest petrol retailer. As part of the deal, Z had to divest 19 service stations and one truck stop to get Commerce Commission approval.
The company today said it expects the sales to be wrapped up before the end of the 2017 financial year, hiring PwC to manage the process. Z has been in talks with a number of retailers this month and issued an information memorandum for certain sites to potential buyers.
"The level of interest in the process from current and potential market participants continues to be strong," Z said.
Z shares last traded at $8.06 and have gained 19 percent so far this year.
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