Ann: HALFYR: NZR: Results for the six months ended 30 June 2015

• Release Date: 20/08/15 08:51
• Summary: HALFYR: NZR: Results for the six months ended 30 June 2015
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20/08/2015 08:51
HALFYR
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REL: 0851 HRS The New Zealand Refining Company Limited

HALFYR: NZR: Results for the six months ended 30 June 2015

The New Zealand Refining Company Limited

Results for announcement to the market

The Directors of The New Zealand Refining Company Limited today announced the
Company's financial results for the year to 30 June 2015, details of which
are attached.

This report, including the results for the previous corresponding half year,
is consistent with the unaudited interim financial statements of The New
Zealand Refining Company Limited for the six months ended 30 June 2015.

COMMENTARY

Refining NZ's long-term strategic focus on reliability has allowed the
Company to capitalise on strong refining margins and the declining NZ dollar,
to report a Net Profit after tax (NPAT) of $65.2 million for the period ended
30 June 2015.
CEO, Sjoerd Post described the result as a remarkable improvement on the $6.9
million loss reported at the same time last year and vindication of the
Company's clear strategic formula.
"During the first six months the team capitalised brilliantly on the
consistently high margins and improved NZD/ USD exchange rate by processing
(at times), record volumes at close to, or above margin cap levels.
"In refining you cannot beat having an experienced team to lift your
performance. This was roundly demonstrated in the first half of the year by
the processing fee revenue produced, which at $170.9  million for 1H 2015 was
$2.5 million better than for the whole of 2014.
"Strong operating cash-flows continued to strengthen and in the first half
allowed us to reduce borrowings by $73 million from a peak of $342 million to
a total of $269 million. The combination of debt reduction and the continued
progress on the construction of Te Mahi Hou (TMH) means that the Company will
pay a dividend to shareholders for the first time in two years, "he said.

PERFORMANCE HIGHLIGHTS

- The refinery marked 12 months without a lost time injury, a notable
achievement highlighting the commitment of staff and contractors to good
workplace safety practices.
- The Gross Refining Margin (GRM) for 1H 2015 was $9.09 - prior to cap or
floor adjustment, (1H 2014: $1.66).  The margin generated in 1H 2015 was
above the cap, resulting in $7.8m being available if margins for the relevant
customers should fall below the cap over the remainder of the year.
- The Company maintained its uplift over the Singapore Complex Margin.
Normally around USD 3.00-4.00, the uplift in 1H 2015 averaged USD 4.27 per
barrel.
- The planned shutdown for maintenance on the large crude distillation unit
(CDU1) and catalyst regeneration was completed successfully in May.
- The throughput of 20.9 million barrels for 1H 2015 was one million barrels
ahead of the 1H 2014 throughput, including a record intake of 127,000 barrels
per day in February.
- TMH continues to makes excellent progress with the project around 95 per
cent complete and entering the pre-commissioning phase. As at 30 June 2015,
construction spending on TMH totalled $338 million.
- The Company continues to progress strategic initiatives, including the
proposal to bring bigger crude shipments to Marsden Point, plans to double
the refinery's use of natural gas and embedding strategic alliances with key
"best-in-class" business partners such as Honeywell for its process control
solutions.

DIVIDEND

Given the marked improvement in Company performance, reduced borrowings and
the progress of TMH, the Company's Directors have resolved to pay a fully
imputed interim dividend of 5 cents per share to be paid on 24 September
2015, with a record date of 10 September 2015.

OUTLOOK

Said Post:  "Full credit to the team and to our strategy of concentrating on
core strengths, managing costs and the continual improvement of our business
processes, both of which have given Refining NZ a very good start to 2015. We
expect that sticking to that strategy will continue to pay off for the
remainder of the year."

ENDS

For further information:
Greg McNeill
Communications and External Affairs Manager
T: 094325115; M: 021 873623; E: [email protected]
End CA:00268729 For:NZR    Type:HALFYR     Time:2015-08-20 08:51:14