Here’s what Z Energy (NZX:ZEL) revealed in its 3QFY21 Report

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Here’s what Z Energy (NZX:ZEL) revealed in its 3QFY21 Report

 Here’s what Z Energy (NZX:ZEL) revealed in its 3QFY21 Report

Summary

  • In Q3FY21, the Company’s jet fuel sales have been severely impacted by the reduction in air travel, with sale volumes down by 65.4% on pcp.
  • Strategic investment in retail stores has resulted in average-per-store revenue to go up almost 6%.
  • Diesel sales trend move upwards as Z Energy invests in making it accessible in strategic transport routes.

Fuel supplier, Z Energy Limited (NZX:ZEL) operating results for Q3FY21 was released on 20 January 2021. The details revealed several interesting points regarding jet, petrol, diesel, and biodiesel sales volumes, as well as non-fuel store sales.

Z Energy’s CEO, Mike Bennets stated that the Company’s volume across the quarter period remained strong. They kept on raising their retail volume on pcp in Z and Caltex networks in spite of not having the normal number of foreign travellers in Q3 period.

The total marketing volume for 3QFY21 is as given below:

       Source:  Z Energy’s Trading Update, dated 20 January 2021

Fuel volumes

The reduction in international travel continues to be the most impactful event on the Group’s sales and revenue. The volume of Jet fuel sold was down 65.4% compared to the previous corresponding period (Q3FY20). This equates to 191 million litres less volume used. Previous monthly data and quarterly reports also recorded similar declines in Jet volume sales.

Conversely, retail sale volumes appear either stable or positively inclined compared to the previous corresponding period. Petrol volume was down only 1 million litres, while diesel volumes were up 18 million litres.

Retail fuel sales have helped offset the drop in Jet volume. Total marketing volume was 16.5% down, from 1053 million litres recorded in pcp to 879 million litres 3QFY21.

The sale volume of all fuels combined in December quarter increased over the volume recorded in September quarter.

Convenience Stores

Z Energy’s investment in improving the quality and number of offerings at their petrol stations/convenience stores has proved lucrative. Average weekly sales are up 5.9% compared to the previous corresponding period. Technology platforms that improve the customer experience, such as pre-order coffee, have been heralded as stand-out contributors to the rise in weekly sales.

 

Commercial ground fuels

Sale of Z Energy’s Biodiesel fuel has benefited from the focus on expansion into strategic traffic routes. Sales by volume are up 3% on the previous corresponding period. This sales momentum is expected to continue with the recent introduction of Biofuel to the Company’s HighBrook Truckstop in December quarter.

Future earnings guidance

Z Energy affirmed its EBITDAF guidance for FY21. Earnings are expected to be in the range of $235-$265 million. The strong value of NZD and increasing retail sales volumes are expected to partially offset the rise in crude oil prices affecting Z’s operating costs.

On 20 January 2021, by the end of the market session, Z Energy shares were at NZ$3.11, up 1.63% versus previous close.

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