Forum Archive Index - February 2003

[hugh webber <hugh.webber@clear.net.nz>]

I did own some for a while, up into last year, attracted by the 
high dividend yield but the more I found out about all the factors
involved the more twitchy I became and baled out.

Their gross income is mostly made up of a refining fee which is
set in US $'s on the basis of East Asia refineries.It is difficult to
get interim info on these net refining fees which are inclined to
move strongly every which way. The US dollar factor is obviously not too
good with the fall and fall of the US$. 

Another factor is that they have minor and major shutdowns for 
maintenance which are not well signalled in advance - they don't
seem to have had one for a while so they could be due. I tried 
reading the Whangarei newspaper but it has bugger all info about
the refinery that's useful. On the other hand I think they manipulate
the level of throughput and their stocks in advance to minimise shutdown
effects. Typically they don't tell shareholders this and suddenly shut down
for 2 months or so.

They have instituted 2 monthly NZSE releases on the level of throughput
and sometimes other info which has clarified the situation a little.
Although they are supposed to be hit by Kyoto it could yet be a long
time with just lip service to Kyoto by government and phasing in over
a period/financial assistance.

In many ways they are like the classical story of futures in West African 
cocoa beans, after months of rumours of droughts, floods, disease,
strikes, rebellion and cocoa glut and reducing the investor to a psychotic
wreck the harvest and prices came in about average.

The NZR chairman made a practice of uttering dire warnings of how bad
the situation was and all the dreadful things that could happen and then
a nice profit and a $2 or $1 a share dividend.
There has also been an article pointing out that NZR dividends have now
become the main route for the big four petrol companies to make and get
their profits out of NZ.
In my recall the shares have moved between about $8 and $44.Also very
low turnover of shares usually. They're due for announcing a result in February.
They do have a sophisticated cracker which is good for manipulating products
and adapting to Kyoto.

A moderate statement would be not for the faint hearted and you need steady
nerves. :-)
The most reassuring thing is that it now seems to accidentally be in Shell/BP/
Caltex and Mobil's interest to look after the minor shareholders.

cheers,
Red Baron



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