Bumper result for NZ Refining

By Phil Boeyen, ShareChat Business News Editor

Thursday 22nd February 2001

Companies like Air NZ may curse higher fuel prices and the low dollar but they're music to the ears of New Zealand Refining (NZSE: NZR), which has reported an 1100% increase in profit to $69.5 million.

The profit for the year to the end of December leaves the previous year's result of $5.7 million trailing in the distance.

NZR chairman, Ian Farrant, admits it has been an abnormal year, with the activities of OPEC creating an unsettled international oil market which showed great fluctuations throughout the year.

"The effect of product shortages in the Asia Pacific region, and in the face of constrained crude supplies and very expensive shipping costs ensured that refining margins stayed generally higher than expected for the whole year," he says.

Mr Farrant says there was also a substantial benefit from the high value of the US dollar relative to the NZ currency which, combined with a focus on cost management, increased the company's bottom-line.

"Compared to the very weak result of $5.68 million in 1999, this result highlights the high volatility from year to year in the international markets."

Refining income more than doubled the previous year to $175 million while cash operating costs dropped by more than $1 million to $87 million.

The company says the decrease in costs was helped by the fact that the year was free of any major maintenance shutdowns.

The directors have approved a final fully imputed dividend of $2 per share compared with 60 cents per share the year before.

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