N.Z. Refining seeks more incentive pay

Press, 1 May 1984, Page 18

N.Z. Refining seeks more incentive pay

The continued payment by the Government of an efficiency; incentive pay- 1 ment to New Zealand Refin-, ing Company, Ltd, is a “significant factor” in the company’s profitability dur-, ing this year, says the chairman, Mr R. J. Milward, in the annual report. This payment represented just under 50 per cent of the company’s tax-paid income in 1983.

The incentive recognises the benefits of better technical control of the refinery’s activities in increasing product yields and internal fuel economy. The scheme has also given substantial national benefit by conserving foreign exchange, he says.

The company is negotiating with the Ministry of Energy to have the expiry date of the efficiency incentive extended past its expiry date of March 31, this year. Total processing fee income rose 30.5 per cent to $75,788,000. This included refunds for increased trading costs and income recovered from the insurance claim after the fire at the refinery

in September. Production is expected to increase about 9 per cent this year, allowing for the five-week biennial shutdown, which began in April. A significant increase in capital expenditure is proposed, including the replacement of mooring dolphins after 20 years of service at a cost of SI4M, some SSM of which will be spent this year.

As reported, the group net profit fell 6.1 per cent to $12,155,000 in the year to December 31, compared with the previous corresponding period. The profit was after providing $1,698,000 more for tax at $11,414,000, and $878,000 more for depreciation at $3,162,000.

A recommended final dividend of 7c a share gives a steady annual rate of 14c a share (14 per cent). The dividend requirement is $3,360,000 and it is covered 3.6 times by the profit. Shareholders’ funds increased $8,795,000 to $93,579,000, including steady ordinary capital of S24M. Working capital showed a deficit of $13,426,000 in the latest year, compared with a surplus of $7,680,000 previously.