N.Z. Refining seeks rebate

Press, 10 May 1979, Page 18

N.Z. Refining seeks rebate

Commercial

New Zealand Refining Co, iLtd, is seeking recognition from the Government of the savings in overseas exchange that it makes by manufacturing products that would otherwise be imported. In his report for the year to December 31 the chairman (Mr D. H. Tudhope) says that, compared to the valuable concessions available to exporters earning foreign currency, there are no comparable benefits available to savers of foreign currency.

“Although no firm decision to allow additional processing fees, as an efficiency incentive, has been agreed the directors are hopeful that some basis can be obtained, during 1979. which will provide for a fair reward,” says Mr Tudhope. Included with the report is a statement showing that in the latest year, the company made foreign exchange savings of S6OM, and in 1977 the saving was S66M.

In the current year, intake levels will be reduced, because of energy conservation measures, and uncertainties in the world crude oil supply. Feedstock from the Maui field will be processed for the first time. In the latest year feedstock from the Kapuni field totalled 566,000 tonnes, or 19.2 per cent of the refinery’s total intake. Costs are expected to rise significantly. The new electricitv charges will add $lBO,OOO to the power bill, and extraordinary maintenance on tankage (after 15 years service) will cost about $500,000.

The recent replacement of the hydrotreater catalyst cost $260,000.

Capita] expenditure planned for this year includes about $2.5M to replace the platforming catalyst, which has been in service since 1973. An estimated S6M, will be needed for new steam-rais-ing boilers, to replace existing outdated plant. This will be the largest project imple-

mented since the refinery came on stream in 1964.

In the latest year, crude and feedstock intake was down 9.9 per cent at 2,954,000 tonnes. Outpout of motor gasoline fell 4.8 per cent to $1,216,000, automoand diesel fuels fell 4.9 per cent to 624.000 tonnes, light and heavy fuel oils fell 20.5 per cent to 846,000, and bitumen was down 6.6 per cent at 102,000 tonnes.

Mr Tudhope says that the fall in intake of 325,000 tonnes, was due primarily to the five weeks’ shutdown for the biennial overhaul (postponed from 1977) and to the fall in market demand for fuel oils.

Processing fees were intially fixed at 77c a barrel, but later increased to 81.46 c a barrel, when it was apparent that throughput was likely to fall below the estimated level. (The fees are controlled by the Government). A final dividend of 4c a share (4 per cent) will be paid on May 28, requiring $960,000 and making 71c for

the full year. In the previous year the dividend was 14c; however, authorised capital w a s increased from $12,000,000 to $24,000,000 on May 29 last year, by a one-for-one bonus issue.

As already reported, in the year ended December 31, net profit was $1,732,000 compared with $1,990,000 the previous year. This was after depreciation of $2,180,000 ($2,151,000 in 1 9 7 7) and taxation $2,462,000 ($2,624,000). With shareholders’ funds totalling $69,004,000 ($69,072,000 in 1977), the earning rate was 2.5 per cent compared with 2.9 per cent in the previous year. (Note: — From January 1, 1977, fixed assets were revalued, increasing shareholders’ funds by $42,179,000). At balance date the net tangible asset backing of the 100 c shares was 297 c compared with 586 c in 1977.

There were 3976 shareholders and 209 employees. The annual meeting, on May 28, will be held on Christchurch.