NZ Refining posts first-half loss in face of shrinking margins, strong Kiwi

New Zealand Refining chief executive Sjoerd Post
NZ Refining 12-month price history (NZX.com)

New Zealand Refining Co [NZX: NZR], the Marsden Point oil refinery controlled by its major customers, sank into the red in the first half of the financial year as weak processing margins and a strong kiwi dollar eroded earnings.

The Whangarei-based company posted a loss of $6.96 million, or 2.23 cents per share, in the six months ended June 30, from a profit of $5.23 million, or 1.87 cents, a year earlier, it said in a statement after the close of trading. Revenue sank 27 percent to $92.4 million.

"By far the biggest impacts on the company's processing fee in the first half have been the weakening of refiners' margins, brought about by a marked decline of the benchmark Singapore refiners' margin, and the high exchange rate," chairman David Jackson said. "The directors have every confidence that the company will prove itself capable of weathering the business environment in the latter part of the year."

The company has been improving its gross margins by taking advantage of historically low wholesale natural gas prices, as one of four initiatives it's pursuing to lift the margin by 66 US cents a barrel.

Chief executive Sjoerd Post said the company was on track to cut costs by $13 million, $6 million ahead of expectations.

The board didn't declare an interim dividend, and agreed that where a shareholder was represented by two directors, the fee for the second director would be waived.

The shares rose 3.1 percent to $$1.69, and have sunk 20 percent this year.

(BusinessDesk)


Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7113 0.0000 0.00%
AUD 0.9508 0.0000 0.00%
EUR 0.6400 0.0000 0.00%
GBP 0.5202 0.0000 0.00%
HKD 5.5327 0.0000 0.00%
JPY 72.5690 0.0000 0.00%

Commods

Commodity Price Change Time
Gold Index 1322.4 60.100 2016-06-24T00:
Oil Brent 49.0 0.120 2016-06-24T00:
Oil Nymex 47.6 -2.520 2016-06-24T00:
Silver Index 17.8 0.440 2016-06-24T00:

Indices

Symbol Open High Last %
NZX 50 6821.4 6853.1 6821.4 -2.25%
NASDAQ 4715.8 4798.2 4910.0 -4.12%
DAX 9237.6 9720.1 10257.0 -6.82%
DJI 17946.6 17946.6 18011.1 -3.39%
FTSE 6338.1 6338.6 6338.1 -3.15%
HKSE 20483.5 21034.2 20868.3 -2.92%
NI225 16333.9 16389.2 16238.4 -7.92%
ASX 5280.7 5325.4 5280.7 -3.17%