New Zealand Refining boosts profits by 200pc

New Zealand Refining showed yesterday that high oil prices had done it no harm as it reported a 200 per cent jump in its 2004 net profit to $97.5 million, and a 233 per cent leap in dividend.

It lifted its fully imputed dividend from 60c a share a year ago to $2. Total dividends rose to $3 from $1.20.

Chairman Ian Farrant said the "exceptionally high" dividend reflected "usually high refining margins" experienced during the year, and these were not expected to be maintained.

NZ Refining is 23.6 per cent owned by BP New Zealand, 19.2 per cent by Mobil Oil NZ, 17.1 per cent by Shell New Zealand and 14.2 per cent by Auckland company Emerald Capital.

Oil companies around the world have been criticised for reporting 2004 profits bigger than some countries' gross domestic product.

Royal Dutch Shell posted a US$17.6 ($25 billion) 2004 net profit, beating BP's US$16 billion. Those profits were easily outdone by Exxon Mobil, which reported a US$25 billion return for 2004.

NZ Refining shares rose 20c over the day to close at $36, having more than doubled from $16.10 a year ago.

Trading revenue rose 48.8 per cent to $280.4 million and the pre-tax profit jumped from $59.6 million to $151.2 million.

Earnings a share rose to 4.06c from 1.54c.

The stronger result was despite the refinery having to be shut down for the first time in more than 20 years for maintenance. Farrant said the additional cost of the shutdown was offset by lower electricity costs.

As well, NZR had spent $79.4 million on its Future Fuels Project, to remove sulphur from diesel and benzene from petrol.

Borrowings of $45 million pushed spending on that project up to $124.4 million during the year.

"This major project is now 88 per cent complete, on schedule and within the approved budget of $180 million," Farrant said.

Revenue from the refinery to Auckland pipeline was steady on $26.4 million. A project to increase capacity was virtually complete.

- NZPA