NZ Refining shutdown to trim $40 mln from annual profit as costs pile up
By Rebecca Howard
June 25 (BusinessDesk) - 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 Whangarei-based 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 $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 an historically high average refining margin.
NZ Refining originally said the scheduled shutdown would run from late April to early June, but the restart was delayed due to 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 in operation.
Late last week the company said restarting the hydrocracker unit would be delayed as a result of two minor leaks. On Monday it said it expects the hydrocracker to produce on-specification fuels from today.
NZ Refining shares fell 2.7 percent to $2.49, having declined 3.4 percent so far this year.