CHI returned to profit but FCF hit -$73.3m and leverage rose to 4.5x EBITDA

Revenue fell 61.9% to NZ$88.2m as refining throughput rolled off, but profit before tax swung from a NZ$765.1m loss to a NZ$23.1m profit (+103.0%) and NPAT moved from a NZ$552.6m loss to NZ$12.0m (+102.2%). The prior loss was dominated by refinery-exit impairments, so the swing reads as the absence of one-offs rather than underlying earnings power.

Cash and balance-sheet direction moved the other way. Operating cash flow turned negative at -NZ$14.1m versus +NZ$34.7m, capex rose to NZ$59.1m (67.0% of revenue), and pre-lease FCF was -NZ$73.3m against Annolyse's historical baseline mean of +NZ$48.3m. Gross borrowings climbed 30.0% to NZ$259.6m, taking net debt / EBITDA to 4.5x — an unprecedented high in the supplied historical range of 2.5x–3.6x — while the board declared a fully imputed 7c dividend (5c final plus 2c special).

• PBT margin of 26.2% sits above the historical range, and the gap between PBT growth (+103.0%) and NPAT growth (+102.2%) is just 0.8pp, with the current effective tax rate of 28.3% close to the NZ statutory rate. The result is therefore not tax-distorted, but it leans on continuing-operations profit of NZ$16.6m offset by a NZ$4.6m discontinued-operations loss, and reflects only nine months of terminal operation.
• The dividend is funded by debt, not cash generation. Pre-lease FCF of -NZ$73.3m means the payout ratio versus FCF is -35.7%, classified as unprecedented in the historical baseline. With cash on hand of NZ$2.4m (down from NZ$16.1m) and net debt up NZ$73.6m year on year, the special dividend for "nine months of terminal operations" was effectively a leverage-financed signalling distribution.
• Cash conversion deteriorated sharply. OCF/EBITDA fell to -24.6% from +47.6%, and is unprecedented in the supplied four-period history (mean 59.4%, range 42.1%–79.6%). This matters because EBITDA of NZ$57.5m converted into negative operating cash, so the headline earnings recovery has not yet been validated by the cash statement.

HY22 NPAT of NZ$17.2m versus full-year NZ$12.0m implies an H2 NPAT of -NZ$5.2m, so the second half was loss-making despite a heavier weighting of terminal-only operating months. Revenue and EBITDA split was more even (H1 ≈ 34% of full year), suggesting the H2 NPAT shortfall reflects below-EBITDA items — conversion costs, finance costs, or the discontinued-operations charge — rather than terminal economics deteriorating.

The release supports a stronger forward demand outlook for fuel imports and confirms a "return to dividends", but the data does not yet support a view on durable run-rate FCF. A clean year of terminal-only operation is required before earnings power and capex intensity stabilise.

EBITDA of NZ$57.5m converted to operating cash of -NZ$14.1m, and pre-lease FCF was -NZ$73.3m against a historical mean of NZ$48.3m. The working-capital movement of -NZ$2.2m is within Annolyse's historical range (mean -NZ$1.6m), so the cash gap is being driven by elevated capex (NZ$59.1m, up 76.8%) rather than by a working-capital build.

Debtor days at 78.7 and inventory days at 20.9 screen as elevated against the supplied baseline, but trade debtors actually fell 7.8% in absolute terms; the days metrics are distorted by the 61.9% revenue decline. Total assets at NZ$946.9m sit below the historical range, consistent with the refinery write-down. ROE of 2.3% versus -111.6% prior is mechanically improved but starts from a much smaller capital base.

This briefing cannot assess the steady-state earnings power, capex intensity, or coverage profile of the import-terminal business model from a single nine-month transitional period.