Refining NZ, operator of New Zealand's only oil refinery, says it made an annual loss of $NZ5 million ($A4.68 million) as it battles a strong local currency and volatile margins caused by the global over-supply of refining capacity.
Gross refining margins for the 2013 year averaged $US4.58 per barrel of oil, compared with $US5.77 the previous year, and the company is predicting "tough" trading conditions in the current financial year also.
No final dividend was declared, making the two NZ cents per share interim dividend the total for the year. The shares have fallen 26.3 per cent in the last year, closing on Thursday at $NZ1.88.
The company had outperformed against its own target of $NZ4m in savings, achieving cost reductions of $NZ6m and was confident of achieving another $NZ7m in savings in the current financial year.
However, there was a global trend for refineries that had invested in upgrades and new facilities facing reduced demand "just as those new production facilities are coming online," said chairman David Jackson in a statement to the NZX.
The Marsden Point refinery, near Whangarei, is in the midst of its own major upgrade.
The North American shale gas revolution was also having an impact, with cheap natural gas "giving US refiners a cost advantage that has revitalised their refining and petrochemicals industry," he said.
The strong New Zealand dollar, which averaged 82 US cents, had also hurt income.
The difficult business conditions would continue in 2014, he said.
Total income for the year of $NZ223.2m was down markedly on the previous year's $NZ278.5m, while total expenses were similar, at $NZ228.8m ($NZ232.2m in 2012).
The latest year's $NZ5m loss compares with an after-tax profit of $NZ31.1m the previous year.
