NZ Refining turns a first-half loss on slimmer refinery margin, high kiwi

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

BUSINESSDESK: New Zealand Refining, operator of the country's only oil refinery, turned a first-half loss as its refinery margin shrank and a high kiwi dollar ate into its processing fee revenue.

The net loss was $1.5 million in the six months ended June 30 from a profit of $31 million a year earlier, the company says. Revenue tumbled 28% to $113 million, while operating expenses rose 1.7% to $113.9 million.

The shares rose 2.3% to $2.66 and have fallen 8.9% this year. The company will pay a first-half dividend of 2 cents, against forecasts that it may omit this year's interim payment.

NZ Refining's average gross refinery margin was $US4.36 a barrel in the first half, down from $US6.56 in the same period last year. The kiwi dollar averaged 80 US cents in the last period from 78 cents in the first half a year earlier.

"The impact on the profitability of our competitor refineries is apparent with closures continuing in Europe, the US and Australia, where Shell brought forward the closure of its Clyde refinery and Caltex Australia revealed plans to close Kurnell near Sydney," the company says.

"Further reduction of the overcapacity in the global refining sector will go some way to easing the pressure on refiners' margins."

It says margins have strengthened "slightly" since the end of June though it can't be sure that will be sustained for the remainder of the year. It did not give a forecast for full-year earnings.

"Continuing poor growth in global economies, in particular, slowing growth in China and India, has contributed to a falling off in demand for oil products." 

A highlight of the first half was winning shareholder approval for its $365 million continuous catalyst regeneration platformer project.

Energy companies are the biggest shareholders. Mobil Oil NZ owns 19%, Z Energy 17% and BP New Zealand 15%.

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

1 Comment & Question

Commenter icon key: Subscriber Verified

The shareholding figures for the energy companies are incorrect. BP owns 23.66%, Mobil 19.2%, Z 17.14% and Chevron 12.69%.

  • 0
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot


Sym Price Change
USD 0.7567 0.0000 0.00%
AUD 0.9753 0.0000 0.00%
EUR 0.6945 0.0000 0.00%
GBP 0.5084 0.0000 0.00%
HKD 5.8650 0.0000 0.00%
JPY 90.0730 0.0000 0.00%


Commodity Price Change Time
Gold Index 1198.2 -6.000 2015-03-27T00:
Oil Brent 56.4 2.710 2015-03-27T00:
Oil Nymex 48.9 -2.560 2015-03-27T00:
Silver Index 17.1 -0.071 2015-03-27T00:


Symbol Open High Last %
NZX 50 5833.2 5854.2 5833.2 0.36%
NASDAQ 4863.7 4899.3 4863.4 0.57%
DAX 11920.2 11954.1 11843.7 0.21%
DJI 17673.6 17729.1 17678.2 0.19%
FTSE 6895.3 6910.6 6895.3 -0.58%
HKSE 24541.4 24549.9 24497.1 -0.04%
NI225 19374.7 19590.0 19471.1 -0.95%