Z Energy is the latest company to cut its dividend payout and start talking to its banks about strengthening its finances.
Photo: RNZ
Chief executive Mike Bennetts said the company, the largest fuel retailer in the country, had been battered by a range of issues over the past 18 months, and was facing even more because of the Covid-19 pandemic.
"We are now facing unprecedented trading conditions as the economy manages through the Covid-19 crisis."
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As with many other companies Z was cutting operating costs, putting capital spending on hold, as well as expenses, and improve cashflow to support a resilient balance sheet.
Z had already incurred $27 million of costs because of the virus, and narrowed its earnings forecast to between $355m to $365m, from the previous range of $350m to $385.
Bennetts said it had been hit by tougher competition leading to lower margins, while the fall in refining margins had resulted in it having to pay to support the Marsden Point oil refinery income stream.
"In view of continued volatility in commodity prices and the exchange rate, Z is in constructive dialogue with its banks to increase its working capital facility," he said.
Z's financial year has just ended, but Bennetts said there had been a slump of up to 80 percent in fuel sales and 40 percent in shop sales during the lockdown.
He said it would be hard to forecast future sales volumes.