NZ Refining shutdown predicted to pare $40m from profit

AUCKLAND: New Zealand Refining shares fell after the Marsden Point refinery operator said a longer planned outage than anticipated will cost more and hit the bottom line harder than previously forecast.

The Whangareibased company said the shutdown would cost $25 million to $30 million more than the $85 million it previously forecast, implying a cost of $110 million to $125 million, and will cut $40 million from profit in calendar 2018 as opposed to the $30 million previously flagged.

In the year to December 2017, net profit was $78.5 million, from $47.2 million a year earlier, thanks to a historically high average refining margin.

NZ Refining originally said that the scheduled shutdown would run from late April to early June, but the restart was delayed because of maintenance issues and minor leaks.

The shutdown makes it possible to inspect equipment located across the refinery, along with maintenance work, cleaning and other projects that cannot be carried out while it is in operation.

Late last week, the company said restarting the hydrocracker unit would be delayed as a result of two minor leaks. Yesterday it said it expected the hydrocracker to produce onspecification fuels from today.

NZ Refining shares fell 2.7% to $2.49, having declined 3.4% so far this year. —