New Zealand Refining, operator of the country's only oil refinery, declared a 66 per cent increase in net profit for the year to December 31, despite repair costs and lost sales totalling $14.3 million from the failure of the pipeline between the plant at Marsden Point and Auckland in September.
Net profit for the year was $78.5m, from $47.2m a year earlier.
Driving the result were historically high average refining margins of US$8.02 per barrel of oil processed, lower than the recent high point of US$9.02 in 2015 but well up on the 2016 average margin of US$6.47, with total revenues 16 per cent higher than the previous year, at $411.6m. Free cashflow more than doubled to $103m, compared with $47m the previous year.
"For much of the year refining margins remained in a range of US$7-to-US$11 per barrel, with only January and December dropping to below US$6 per barrel," chief executive Sjoerd Post, who announced his resignation yesterday after five years with the company, during which time he has overseen a $365m upgrade to modernise the facility and last year's pipeline rupture, which severely disrupted international airline connections to New Zealand's largest city for some 10 days.
Post is leaving the company prior to an inquiry into the rupture, although has said he will remain in place until the end of July, while a replacement is found.
