NZ Refining up 36%

Press, 29 August 1986, Page 10

NZ Refining up 36%

PA Wellington The Marsden Point operator, the New Zealand Refining Company, Ltd, has lifted interim profit 36 per cent to $5,085,000 (last year $3,734,000) for the six months ended June 30. Process fees (turnover) were $87.1M (544.7 M Tax took $5,167,000 ($3,603,000). There were no extraordinaries. Interim dividend will be 10c a share to be paid on October 13. The chairman, Mr Paul Skinner, said the directors decided the issue of bonus shares in lieu of dividends was not appropriate for the company, having regard to its corporate shareholders. They would give consideration to some other recognition after the completion of the expansion project when the final dividend recommendation was made.

Mr Skinner said the profit showed a significant improvement on that earned in the

same period last year, though the 1985 comparative figure had been depressed by an earlier phasing of costs relative to recoveries during that year.

The 1986 result included a full half year’s fees for operating the refinery to the Auckland pipeline which had been commissioned in mid--1985.

Mr Skinner said it was anticipated that the company’s earnings achieved in the first half year would be maintained for the full year.

Commissioning .of the expansion project was proceeding according to schedule. On May 30 the company took over the responsibility for the remaining construction work from the main contractor, Badger-Chiyoda.

Mr Skinner said that at the annual meeting, shareholders had been advised on the position in respect of the Government’s proposals for deregulation of the oil industry.

At that time the directors had commissioned an independent study by the American consultants, Solomon Associates Inc, on the company’s cost competitiveness and commercial viability in a deregulated environment The report was completed recently .and presented to the Government. It confirmed the directors’ earlier views that the refinery would be at a significant cost disadvantage should imports be allowed from other refining centres in the Pacific Basin where surplus capacity currently existed.

In the meantime the Government had announced in the Budget its intention to assume direct responsiblity for the two Eurodollar loans that finance the expansion project

The Government and the company were to meet again shortly in an endeavour to progress the deregulation issue, and agree on the new’ arrangements for the Eurodollar loans.