'Remarkable' first half turnaround for NZ Refining
Weak dollar, low oil prices help New Zealand Refning.
Hot Topic
Summer features
The country's only oil refinery, New Zealand Refining [NZX: NZR], has delivered what management describe as a "remarkable improvement" in its first half results, underpinned by a weaker currency and dramatically lower oil prices.
The Marsden Point refinery posted an after-tax profit of $65.2 million in the six months ended June 30, compared to a loss of $6.9 million from the same period last year.
The company will return a 5c per share dividend to shareholders, its first distribution in two years.
The refining margin per barrel of oil processed rebounded from an average of $1.66 in the previous half to $9.09 in the latest half-year, with plant availability of 95.4% up on the previous half's 88.4%.
The New Zealand dollar averaged 74USc during the period, compared with 84USc on average the previous year, while the average price of a barrel of oil dropped dramatically, from $US105 in the first half of the previous year to $US57 a barrel.
"During the first six months the team capitalised brilliantly on the consistently high margins and improved New Zealand dollar/US dollar exchange rate by processing (at times), record volumes at close to, or above, margin cap levels," NZ Refining chief executive Sjoerd Post says.
The refinery's upgrade project, Te Mahi Hou, was also now 95% complete and entering the pre-commissioning phase and the company is advancing proposals to bring bigger crude oil shipments into Marsden Point and double the use of natural gas at the plant.
"Strong operating cashflows continued to strengthen and in the first half allowed us to reduce borrowings by $73 million from a peak of $342 million," said Post.
The refinery operated the full year with no lost time injuries.
The shares last traded at $3.10, and have jumped 40% this year.
(BusinessDesk)
Pattrick Smellie
Thu, 20 Aug 2015
Thu, 20 Aug 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
'Remarkable' first half turnaround for NZ Refining
50711