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Hellaby cuts outlook on refinery issues

NZ NewswireNZ Newswire 29/05/2016 Jonathan Underhill

Hellaby Holdings has cut its full-year guidance, saying earnings would fall because of the impact of refinery shutdowns on its resource services division.

The announcement shows a predicted second-half rebound for the resources group, which undertakes oil refinery maintenance, didn't eventuate.

Chief executive Alan Clarke had said crude oil prices at a 12-year low kept refineries open in the first half because of fatter margins, with maintenance scheduled for the second half.

But on Monday the company said a second-half bonanza of refinery maintenance work didn't eventuate because of further delays in refinery shutdowns.

"As a consequence, whilst second half earnings will be an improvement on the first half, full year earnings for this group will be significantly down on the last financial year," the company said.

Consolidated trading earnings before interest, tax, depreciation and amortisation are forecast at $43 million to $47 million in the year to the end of June, down from $59m in 2015.

"Our focus for the remainder of this financial year is to work with our very large resource services customers around the world to confirm scheduled shutdowns in the next three to six months; resource and complete current jobs; and drive additional cost savings synergies," Mr Clarke said.

Current resources chief executive Andy Wells will step aside and a new CEO will be recruited.

The full-year result will also include head office restructuring costs and operational cost saving initiatives, the company said. The 2016 annual dividend would be held at the 2015 level, it said.

Hellaby stock last traded at $2.57 and has declined 14 per cent in the past 12 months.

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