The New Zealand Refining Company has blamed a shutdown of its Marsden Pt refinery, lower margins due to cheaper crude and the impact of the high dollar for slashing first-half profit by almost a third.
Net profit was $59.9 million in the six months to June 30, down28 per cent on the sum of $83.2 million for the same period the year before, while revenue dropped 24 per cent to $161.2 million.
Chief financial officer Dennis Martin said margins were lower than last year - US$7.89 compared to US$8.86 in 2006 - as a result of crude prices easing from last year's giddy heights.
"World product prices are really out of our control," he said. "They're still very high but last year they were exceptionally high."
Revenue from refining fell 27 per cent to $142.4 million.
"The reduction is largely due to the shutdown of the refinery in March, but the late delivery of crude in June accounted for around 200,000 barrels," chairman Ian Farrant said.
The company shut its Hydrocracker and Crude Distillation Unit No 2 for 24 days in March to replace catalyst and complete scheduled maintenance and inspections.
A $180 million project to modify an existing crude distillation unit scheduled for completion in 2009 is expected to increase crude oil intake.
Martin said that an average exchange rate of US71.88c for 2007 compared with US64.46c in 2006 was responsible for 31 per cent of the drop in refining revenue.
He was reticent about giving a projection about future earnings given the volatility of the oil prices, the currency and the US hurricane season beginning.
Shares in the New Zealand Refining Company - which is 73 per cent owned by BP, Mobil, Caltex and Shell - closed steady at $6.80.
