Full Year Announcement

2016

The New Zealand Refining Company Limited

Results for announcement to the market

Reporting Period 12 months to 31 December 2016

Previous Reporting Period 12 months to 31 December 2015

The Directors of the New Zealand Refining Company Limited today announced the Company's financial results for the year to 31 December 2016, details of which are attached. This report, including theresults for the previous corresponding year, is consistent wi th the audited financial statements of the New Zealand Refining Company Limited for the year ended 31 December 2016.

Consolidated Results
  1. Results $NZ 000

    Revenue from ordinary activities Current year $354,156

    Down 21%

    Previous corresponding year $446,771

    Profit from ordinary activities after tax attributableto security holder. Current year $47,177

    Down 69%

    Previous corresponding year $150,771

    Net profit attributableto security holders. Current year $47,177

    Down 69%

    Previous corresponding year $150,771

  2. Final Dividend

    Amount per security: NZ 6 cents per share.

    Imputed amount per security: NZ 2.3 cents per share (fully imputed) Record date: 16 March 2017

    Dividend Payment Date: 30 March 2017

  3. Net Tangible Assets per Security

    As at 31 December 2016 $2.43 As at 31 December 2015 $2.53

    COMMENTARY

    Refining NZ has reported a Net Profit after Tax (NPAT) of $47 million for the year ended 31 December 2016.

    Chief Executive, Sjoerd Post said the 'standouts' in what he described as a strong result, were world-class reliability; record crude intake; strong free cash-flow; and a Gross Refining Margin (GRM) at the top of its historic USD 4-6 range.

    "In 2016 our Gross Refinery Margin (GRM) averaged USD 6.47. The margin weakness we had seen at the start of the year, gave way to stronger margins in the second half, helped by continued strong demand for gasoline on the back of new vehiclegrowth in New Zealand and Asia and a 19% year-on-year increasein Jet fuel

    demand driven by record visitor numbers to Auckland International Airport."

    "Our new petrol-making unit contributed a GRM of USD 0.90 per barrel, and our $5 million investment in small-to-medium, short payback projects in 2016 grew our GRM by USD 0.10 per barrel."

    Said Post: "Underpinning this result is an outstanding operational performance, beginning with a successful,

    injury free maintenance shutdown in April, which meant we were ableto capitaliseon healthy margins for the remainder of the year. Full credit for staying focused on working safely goes to our team of 500 hard-working employees and contractors."

    PERFORMANCE HIGHLIGHTS

    • Operating revenue of $354m (2015:$446m), and strong cost control delivered an NPAT of $47m (2015: $151m), outperforming the matrix released to the market in February 2016 and in linewith matrix released in August 2016.

    • GRM averaged USD 6.47 per barrel (2015: USD 9.20 per barrel prior to cap adjustment).

    • The Company retained its uplift over the Singapore Complex Margin, averaging USD 3.22 per barrel (2015: USD 4.45).

    • Record annual crude intake of 42.7m barrels, bettered the previous record (2015: 42.6m barrels).

    • Unplanned downtime at 0.85% (2015: 0.33%) was world-class and allowed the refinery to capitalise on the healthy margin environment.

    • Cash generation from operations resulted in a free cash-flow of $47m.

DIVIDEND

The Company's Directors have resolved to pay a fully imputed final dividend of 6 cents per shareto be paid on 30 March 2017, with a record date of 16 March 2017. With an interim dividend of 3 cents paid in September, the total dividend payment for the year is 9 cents.

OUTLOOK

Said Post: "This strong result shows that operational reliability, quality fuels production and pursuing revenue growth are critical to continuing to delight our customers and to maximise returns from a healthy

margin environment. Whilewe are above the upper limit of our target debt, we believe payment of a 6 cps dividend balances our desireto prudently manage the Company and providean adequate return

to shareholders."

ENDS

Further information: Greg McNeill

Communications and External Affairs Manager

T: 094325115; M: 021 873623; E: greg.mcnei l l @refi ni ngnz.com

The New Zealand Refining Company Limited published this content on 28 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 27 February 2017 20:17:09 UTC.

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