New Zealand's biggest petrol chains increased their profits in 2016 despite revenue dropping, as rising oil prices made their inventories more valuable.
The New Zealand division of British Petroleum, one of the world's largest oil and gas companies, lifted annual profit 15 per cent in 2016 to $147 million, though revenue dropped 3 per cent to $2.7 billion, financial statements lodged with the Companies Office show. Cost of sales fell 7 per cent to $2b, meaning gross profit rose 10 per cent from a year earlier to $704m.
BP New Zealand is the third of the major petrol chains to post its annual results, and its accounts show net profit rose to $481m from $301m across the service station operators while revenue dropped to $8.77b from $9.58b a year earlier. That's the second year of petrol companies boosting profits amidst falling sales.
ExxonMobil NZ also reported for the year ended December 31, while Z Energy's annual reporting was to March 31, 2017. ExxonMobil, which turned from a loss to a $91m profit last year, attributed its gains to increased oil prices and higher inventory levels in the year, which bolstered its results by a $107.3m increase in inventory value. BP New Zealand's accounts show its inventories were worth $366.6m at the end of 2016, from $269.6m at the end of 2015.
When Z Energy reported in May, its annual profit had more than tripled to $243m from $64m, though that included 10 months of contributions from its acquisition of Chevron New Zealand's brands. At the time, the company's chief executive Mike Bennett said its fuel margin had fallen 17 per cent to 17.6 cents per litre from the year earlier, and it expected margins to soften over the 2017 financial year with more competition in the market.
