NZ Refining cautiously optimistic about 2017
New Zealand Refining told shareholders there is continued support for increased refining margins and the company is cautiously upbeat about 2017.
Chief executive Sjoerd Post told the annual meeting in Auckland today the company is "cautiously optimistic about refinery margins in Asia Pacific and NZ demand," according to speech notes posted to the NZX.
Post said New Zealand and Auckland "are booming" and pointed to record new car sales and said refinery Auckland pipeline volumes were up 8.5 percent and jet volumes at Auckland International Airport rose 19 percent last year in the nation's tourism boom.
Direct flights to Dubai or Doha take some 200,000 litres of jet fuel or 3.7 minutes of pipeline capacity between Marsden Point and Auckland, said Post. "We anticipated at least part of this growth and are proactively upgrading the capacity of the pipeline to continue meeting expected demand growth. We hope to have increased pipeline capacity by around 10 percent by the end of this year," he said.
Outside New Zealand, he said the Whangarei-based company doesn't see much new incremental capacity coming on stream. "In fact, the expectation is that Asiapac will go short on products this year," he said. He noted, however, this is not "such a bullish signal" as it may sound because products are easily brought into the region from export refining centres such as India and the Middle East. "However, it is positive nevertheless," he said.
The company's net profit fell to $47.2 million in calendar 2016, from a record $150.8 million a year earlier. Revenue dropped 21 percent to $354.2 million, while processing fees, NZ Refining's main source of revenue, dropped 27 percent to $276.6 million.
The shares rose 1.3 percent to $2.36.