New Zealand Refining more than tripled first-half profit as above-average margins bolstered earnings for the operator of the Marsden Point oil refinery, paving the way for a slightly higher dividend than expected.
Net profit jumped to $35.2 million, or 11.25 cents per share, in the six months ended June 30 from $11.6m, or 3.71 cents, a year earlier, the Whangarei-based company said in a statement. Revenue gained 22 per cent to $190.6m, with a gross refinery margin of US$7.70 a barrel across the period, up from US$5.25/barrel a year earlier and beating the historical average margin of US$4-to-US$6/barrel.
"Margins continue to be supported by buoyant international and domestic demand for oil products," chief executive Sjoerd Post said. "We've taken full advantage of that margin environment through growth projects and excellent cost control, and generated a strong net income as a result."
The board declared a fully imputed interim dividend of 6 cents per share, payable on September 28 to shareholders on the register at the close of September 14.
That was more than the 5 cents per share payment predicted by Forsyth Barr analyst Andrew Harvey-Green, who was picking first-half profit of $33.9m on revenue of $196.3m, although he noted that there was "upside risk" to the dividend payout. He rates the stock an 'outperform', and the shares rose 1.6 per cent to $2.54.
