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Healthier margins boost NZ Refining profits

Thursday 17th February 2011

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The New Zealand Refining Company (NZRC) reported an improved after tax full year profit of $57.7 million for the year ending December 2010.

Chairman of the Northland-based company David Jackson said the result exceeded company expectations and was a significant improvement on the previous year's result of $23.6 million.

Consolidated revenue increased 16% to $291,2 million compared to last year's $250.5 million.

"This improved result comes on the back of healthier refiners' margins and a USD/NZD exchange rate that traded during the year in a range that was better than expected," he said.

The 2009 global financial crisis had dented demand for fuel products as additional refining capacity came online.

As a result, refiners' margins plummeted to around US$1 (NZ$1.3) per barrel by the end of 2010, he said.

However, margins rebounded in 2010 and remained in a healthy range throughout the year continuing into 2011.

"We have a well structured, safe and reliable refinery with talented people producing high-quality products.

"Future growth depends on our continuing to be the supplier of choice for our customers, through being the most reliable, cost effective supply source of fossil fuels with the lowest environmental footprint," he said.

He also said the company was considering investing $400-$500 million in a "significant growth project", which would increase its share of the domestic market for transport fuel products.

Directors had agreed to provide $23 million for a feasibility study, to be submitted to the board by February 2012.

The company will pay a fully imputed final dividend of 10c per share.



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