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MarketScreener Homepage  >  Equities  >  NEW ZEALAND STOCK EXCHANGE  >  New Zealand Refining Company Ltd    NZR   NZNZRE0001S9

NEW ZEALAND REFINING COMPANY LTD

(NZR)
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New Zealand Refining : Operational Report for Mar/Apr 2019

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05/16/2019 | 09:03pm EST

17 May 2019

Refining NZ Operational Update for March/April 2019

HIGHLIGHTS

Continued strong operational performance with high hydrocracker throughput and good operational availability that led to refinery throughput of 7.31 million barrels.

__________

The Company earned NZD 50.1 million in Processing Fees for March/April.

__________

Refining NZ's Gross Refining Margin (GRM) was USD 6.63 per barrel, a strong uplift over the Singapore Dubai complex margin.

__________

Global refining margins recovered somewhat from the lows experienced during the January/February period although margins were constrained by the rise in crude oil prices.

__________

Volumes of products delivered through the refinery to Auckland pipeline remained strong.

__________

Outstanding process and personal safety performance was achieved:

-No Tier 1 or Tier 2 process safety events in the March/April period; and

-No recordable or lost time injuries since November 2018.

__________

Overall operating and capital costs have been controlled tightly versus budget, despite pressure from higher electricity prices.

COMMENTARY

Refining - Margins and throughput

Sustained good hydrocracker throughput and excellent plant uptime combined with refinery throughput of

7.31million barrels and a Gross Refinery Margin of USD 6.63 per barrel has seen the Company earn NZD 50.1 million in Processing Fees for March/April.

The refinery achieved excellent Operational Availability of 99.9% during the March/April period.

Global refining margins recovered somewhat from the lows experienced during the January/February period although margins were constrained by the rise in crude oil prices caused by geopolitical issues. Gasoline margins improved due to large stock draws in the USA and unplanned outages in Asia while lower Chinese diesel demand and increased diesel export quotas softened diesel margins. Asian fuel oil margins came under pressure due to high inflows from outside the region.

Page 1 of 6

The Singapore Dubai complex margin for the March/April period was USD 0.75 per barrel, impacted by the factors above and also by low naphtha margins. Refining NZ's March/April uplift over the Singapore Dubai complex margin was strong at USD 5.88 per barrel enabled by stable refinery operation, a balanced product slate and locational advantage.

The average exchange rate for the March/April period was USD/NZD 0.68.

Refinery throughput in the March/April period was healthy at 7.31 million barrels. This was impacted slightly by the natural gas supply shortfall resulting from on-going maintenance on the Pohokura offshore gas field facilities. The field operator now plans to complete the required maintenance and restore supply by the end of May.

Refining NZ built its natural gas portfolio on the spot market and, as spot market prices were higher than Refining NZ's term gas contract, this had a negative impact on GRM of USD 0.11 per barrel for March/April. However, this remained preferential to firing more valuable liquid fuels.

Distribution - Refinery to Auckland Pipeline

Pipeline operational availability was high and volumes of products delivered through the pipeline remained strong.

Health, safety and environment

Process and personal safety performance were outstanding with no Tier 1 or Tier 2 process safety events in the March/April period and no recordable or lost time injuries since November 2018.

Costs

Overall operating and capital costs have been tightly controlled versus budget despite ongoing pressure from higher electricity prices.

Page 2 of 6

OPERATIONAL DATA

Health, Safety & Environment

LTI

LTIF

TRC

TRCF

Tier I Process Safety Events

Tier II Process Safety Events

Releases outside of consent

Refining

Brent Crude Oil Price Exchange Rate Operational availability Refining throughput Gross Refining Margin Gross Refining Margin (excluding Fee Floor/Margin Cap)

Processing Fee (after Fee Floor/Margin Cap) Processing fee (after Fee Floor/Margin Cap)

Distribution

RAP throughput

Mar/Apr

Mar/Apr

YTD

FY

2019

2018

2019

2018

#

0

1

0

5

#/200,000hrs

-

-

0.41

0.48

#

0

1

0

8

#/200,000hrs

-

-

0.61

0.76

#

0

0

0

2

#

0

1

0

3

#

0

0

0

5

US$/bbl

68.7

68.9

65.2

71.2

US$/NZ$

0.68

0.73

0.68

0.69

%

99.9

98.7

99.9

90.7

Mbbl

7.31

7.00

14.28

40.44

US$/bbl

6.63

6.82

5.78

6.31

US$M

48.5

47.5

82.5

255

US$M

34.0

33.2

57.8

178.6

NZ$M

50.1

45.8

85.1

258.7

Mbbl

3.5

3.6

7.0

21.0

Notes:

1.The information provided in this announcement excludes revenue from distribution or other activities.

2.The Processing Fee results reported in this announcement are subject to change due to post announcement price updates and independent audit.

3.A five year history of Throughput, Margins and Processing Fees is attached below.

4.Refer to the explanatory notes/glossary for a definition of terms.

Page 3 of 6

HISTORICAL INFORMATION - REFINING

2015

2016

2017

2018

2019

Jan/Feb

Barrels 000's

7,056

6,826

7,160

7,011

6,963

RNZ USD GRM per barrel 1)

9.91

7.96

6.58

7.54

4.88

Singapore Dubai Complex GRM

5.40

4.95

3.42

3.37

-0.32

Uplift vs . Singapore Dubai Complex 3)

4.51

3.01

3.16

4.17

5.20

NZD Processing Fee (million) 2)

59.6

57.0

45.9

50.8

34.9

Mar/Apr

Barrels 000's

7,411

7,471

5,140

6,958

7,312

RNZ USD GRM per barrel 1)

8.77

1.84

9.35

6.82

6.63

Singapore Dubai Complex GRM

4.82

3.18

3.02

3.75

0.75

Uplift vs . Singapore Dubai Complex 3)

3.95

-1.34

6.33

3.07

5.88

NZD Processing Fee (million) 2)

62.3

14.8

48.1

45.8

50.1

May/Jun

Barrels 000's

6,416

6,837

7,755

3,910

RNZ USD GRM per barrel 1)

8.55

6.26

7.63

0.18

Singapore Dubai Complex GRM

4.24

2.13

2.90

2.02

Uplift vs . Singapore Dubai Complex 3)

4.31

4.13

4.73

-1.84

NZD Processing Fee (million) 2); 5)

48.9

43.3

58.4

0.7

Jul/Aug

Barrels 000's

7,519

6,833

7,511

7,615

RNZ USD GRM per barrel 1)

7.66

6.20

8.87

6.86

Singapore Dubai Complex GRM

2.52

1.86

4.70

2.57

Uplift vs . Singapore Dubai Complex 3)

5.14

4.34

4.17

4.29

NZD Processing Fee (million) 2)

63.5

41.3

63.6

54.3

Sept/Oct

Barrels 000's

7,221

7,251

6,816

7,639

RNZ USD GRM per barrel 1)

9.47

7.49

9.31

7.09

Singapore Dubai Complex GRM

5.12

3.18

4.73

2.47

Uplift vs . Singapore Dubai Complex 3)

4.35

4.31

4.58

4.62

NZD Processing Fee (million) 2)

71.8

52.5

62.2

57.8

Nov/Dec

Barrels 000's

7,017

7,447

7,342

7,307

RNZ USD GRM per barrel 1)

10.82

9.20

6.83

6.53

Singapore Dubai Complex GRM

6.37

4.19

3.67

1.80

Uplift vs . Singapore Dubai Complex 3)

4.45

5.01

3.16

4.73

NZD Processing Fee (million) 2)

73.0

67.6

50.7

49.2

Total

Barrels 000's

USD GRM per barrel 1)

NZD Processing Fee (million)

YTD Cap adjustment

NZD Processing Fee (million)

42,639

42,665

41,724

40,440

14,275

9.20

6.47

8.02

6.31

5.78

2)

379.2

276.6

328.9

258.7

85.1

14.4

1)

1)Excludes Fee Floor/Cap adjustment

2)Includes Fee Floor/Cap adjustment

3)RNZ uplift vs . Singapore Dubai Complex GRM is in USD per barrel

Page 4 of 6

EXPLANATORY NOTES/GLOSSARY

LTI (Lost time injuries) and LTIF (Lost time injury frequency)

Lost time injuries refer to fatalities, permanent disabilities or time lost from work.

Lost time injury frequency refers to the number of lost time injuries over a rolling 12-month period, per 200,000 hours worked.

TRC (Total recordable cases) and TRCF (Total recordable case frequency)

Total recordable cases refer to lost time injuries, medical treatment and restricted work cases.

Total recordable case frequency refers to the number of recordable injuries over a rolling 12-month period, per 200,000 hours worked.

Tier 1 Process Safety Event (API 754)

A tier 1 Process Safety Event (PSE) is an unplanned or uncontrolled release of any material, including non-toxic and non-flammable, from a process which results in one or more of the following: A LTI and/or fatality; a fire or explosion resulting in greater than or equal to $25,000 of direct cost to the company; a release of material greater than the threshold quantities given in Table 1 of API 754 in any one-hour period; an officially declared community evacuation or community shelter-in-place.

Tier 2 Process Safety Event (API 754)

A tier 2 Process Safety Event (PSE) is an unplanned or uncontrolled release of any material, including non-toxic and non-flammable, from a process which results in one or more of the following: A recordable injury; a fire or explosion resulting in greater than or equal to $2,500 of direct cost to the company; a release of material greater than the threshold quantities given in Table 2 of API 754 in any one-hour period.

Operational availability

Operational availability is the percent of time available for manufacturing after subtracting maintenance and regulatory/process downtimes.

Refining throughput

Refining throughput is the volume of feedstock intake, comprising crude oil, residues, natural gas and blendstock, measured in barrels. One barrel equates to approximately 159 litres.

Page 5 of 6

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

The New Zealand Refining Company Limited published this content on 17 May 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 17 May 2019 01:02:03 UTC

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EBIT 2019 38,8 M
Net income 2019 17,6 M
Debt 2019 235 M
Yield 2019 4,64%
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P/E ratio 2020 9,06x
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