NZ Refining says pipeline leak won't hit revenue as hard
New Zealand Refining, which operates the country's only oil refinery in Marsden Point, said the impact of damage to the pipeline between the refinery and the Auckland depot will be less than anticipated.
The damage - reported early last week - disrupted fuel supply, prompting a joint industry and government response. Whangarei-based New Zealand Refining now expects to miss out on $8 million to $9 million of pipeline and refining income after the disruption versus a prior estimate of $10 million to $15 million. Its first estimate of costs associated with repairs, recovery and remediation will be in the range of $4 million to $5 million, it said in a release to the stock exchange.
"Therefore based on our current best estimates, the impact of the incident on the company's full-year 2017 net profit after tax will be in the range of $9 million to $11 million," said chief executive Sjoerd Post.
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.
NZ Refining said repairs to the refinery to Auckland pipeline were completed and operations restored over the weekend. The first batch of jet fuel starting arriving into Wiri at 10am on Sunday, about two hours ahead of the earliest planned delivery.
The company has insurance cover for business interruption, property and environmental damage amongst others. "However, given the limited extent of the currently expected losses and the excesses that apply to these policies, only a limited amount of the losses is expected to be recovered," it said.
The stock last traded at $2.52 and is down 3.1 percent this year.