Sharply lower margins and throughput drove Refining NZ $186.4m into the red over the first half to June 30.
The interim net loss compares with a $3.5m shortfall in the previous corresponding period last year.
The company, which is in the middle of a strategic review, said its income fell by $52.5m or 30.6 per cent, largely due to lower margins and throughput, while EBITDA was down $38.7m , or 71.5 per cent.
Refining NZ said it is developing plans to simplify its refinery operations and to reduce operating costs, making the business robust enough to handle an extended period of low margins.
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The company has engaged with customers to evaluate a possible future staged transition from a being a refinery to an import terminal.
In its result, Refining NZ said about $70m in cost and capital expenditure reductions had partly offset lower revenue.
Early action to strengthen Refining NZ's balance sheet had provided "significant debt headroom".
Chief executive Naomi James said it was a "significant achievement" to have safely navigated the impacts of Covid-19 and volatile refining markets, while resetting Refining NZ's 2020 cost base.
Refinery and pipeline throughput for the six months were 27 per cent lower than the same period in 2019 and about 40 per cent lower from the time that the pandemic was declared.
Throughput at the Marsden Point refinery was 15.4m barrels, down from 21.2m barrels in the previous corresponding period.
Auckland pipeline throughput in the six months was 7.5m barrels, down from 10.3m.
Diesel and petrol demand had recovered to pre-Covid-19, prior to the latest lockdown measures announced by the New Zealand Government on August 12, while jet demand remained weak at around 40 per cent.
"This continues to impact on the way in which we operate the plant and our revenue, given the reduced supply of jet fuel into Auckland Airport," James said.
"We continue to work closely with our customers to help manage fuel supply in this uncertain market," she said in a statement.
"After operating the processing units on a rotating basis for three months to reduce production, we are now re-starting the refinery after a 6-week temporary shutdown, from early July, in order to balance fuel supply across the country."
Global refining margins weakened towards the end of 2019 from the excess refining capacity, particularly in the Asia-Pacific region.
This continued into the first quarter, before the impacts of Covid-19, which exacerbated the situation and further weakened refining margins.
The company said it continued to meet its gearing and interest cover covenants in the current low margin environment.
Refining NZ started its strategic review in April.
It is now developing plans to simplify refinery operations and structurally reduce operating costs, making the business robust to an extended period of low-margins.
"We continue to work closely with our customers to assess the longer-term options and with Government and other stakeholders to ensure there is a planned and coordinated approach to future changes," she said.
A further update on the review process is expected to be made around the end of the third quarter.
James, a former Santos executive, took over as chief executive early this year.
She replaced Mike Fuge, who handed in his notice after 13 months in the job to take the top position at Contact Energy.
Refining NZ shares last traded at 67c, having fallen by 68 per cent over the last 12 months.