The New Zealand Refining Company (NZRC) has announced a 45% after tax profit drop to $29 million for the six months to 20 June 2010.

This compares to $52 million made during the same period last year.

NZRU chairman David Jackson described the result as better than expected - with his statement backed up by the Marsden Point-based company’s decision today to pay an interim dividend of 2c a share.

The company paused dividends last year after disappointing results.

New Zealand Refining Company margins picked up in the two-months to February up from a five-year low last year, but the company is not expecting a smooth ride ahead.

Margins improved from $US1.18 a barrel (gross refining margin or GRM) in November/December to $US6.85 to February.

But the company said although margins started to recover in December 2009, it was premature to think further improvement signalled a sustained recovery.

The company expects volatile few months.

New Zealand Refining Company expects a slashed full year net profit compared to 2008, in the range of $10 million to $20 million.

In February, the company reported an 11% rise in net profit for 2008 to $124.9 million, after processing almost 40 million barrels of crude oil for the year.