Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

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

NEW ZEALAND REFINING COMPANY LTD

(NZR)
  Report  
SummaryNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector news

New Zealand Refining : Throughput & Margin Report - Sept/Oct 2017

share with twitter share with LinkedIn share with facebook
share via e-mail
0
11/19/2017 | 04:41pm EST

20 November 2017

Announcement to NZX Refining NZ Throughput and Margin Report for September/October 2017 Processing Fee Revenue

Refining NZ achieved a Gross Refinery Margin1) (GRM) of USD 9.31 per barrel for the September/October period and captured Processing Fee income of NZD 62.2 million, compared with NZD 63.6 million for the July/August period. Year to date Processing Fee income is NZD 278.3 million which is 33% higher than the NZD 209.0 million earned in the equivalent 2016 period.

Throughput for the September/October period was 6.8 million barrels which was lower than plan due to the leak suffered on the refinery to Auckland pipeline. As communicated previously, Refining NZ expects to process 42 million barrels by year-end. The pipeline has been in stable operation since 27 September and we are on schedule to return it to full capacity in Q1 2018.

The Singapore Dubai complex margin for the September/October period was USD 4.73 per barrel, similar to the July/August period. Refining NZ's uplift over the Singapore Dubai complex margin strengthened to USD 4.58 per barrel from USD 4.17 per barrel in July/August.

The average exchange rate for the September/October period was USD/NZD 0.71. Appendix I shows further information on throughput, margin and refining income. Historical Analysis

A five year history of Throughput, Margins and Processing Fees is attached as Appendix II and can also be

found on the company's website: www.refiningnz.com

1) Refining NZ's Gross Refining Margin is defined as the typical market value of the products produced minus the typical market value of the feedstock used, expressed per barrel of feedstock used. The margin incorporates the cost of the hydrocarbon used for fuel and incurred as process losses.

Appendix I - Year to date: 2017 Throughput, Margin and Refining Income

Note: The GRM for a period may be above or below the Cap of USD 9.00 per barrel due to previous year price updates, which are not subject to the Floor/Cap in the current year

Jan/Feb

Throughput

Barrels (million)

7.16

6.58

Gross Refining Margin

USD (million)

47.1

Gross Refining Margin (excluding Floor/Cap)

USD (million)

47.1

6.58

Interim Cap adjustment

NZD (million)

0.0

Processing Fee (after Floor/Cap)

USD (million)

33.0

4.60

Processing Fee (excluding Floor/Cap)

NZD (million)

45.9

Processing Fee (after Floor/Cap)

NZD (million)

45.9

Total per bbl

Throughput

Barrels (million)

5.14

9.35

Gross Refining Margin

USD (million)

48.1

Gross Refining Margin (excluding Floor/Cap)

USD (million)

48.1

9.35

Interim Cap adjustment

NZD (million)

0.0

Processing Fee (after Floor/Cap)

USD (million)

33.6

6.54

Processing Fee (excluding Floor/Cap)

NZD (million)

48.1

Processing Fee (after Floor/Cap)

NZD (million)

48.1

Mar/Apr

Throughput

Barrels (million)

7.76

7.63

Gross Refining Margin

USD (million)

59.2

Gross Refining Margin (excluding Floor/Cap)

USD (million)

59.2

7.63

Interim Cap adjustment

NZD (million)

0.0

Processing Fee (after Floor/Cap)

USD (million)

41.4

5.34

Processing Fee (excluding Floor/Cap)

NZD (million)

58.4

Processing Fee (after Floor/Cap)

NZD (million)

58.4

May/Jun

Throughput

Barrels (million)

7.51

8.87

Gross Refining Margin

USD (million)

66.6

Gross Refining Margin (excluding Floor/Cap)

USD (million)

66.6

8.87

Interim Cap adjustment

NZD (million)

0.0

Processing Fee (after Floor/Cap)

USD (million)

46.6

6.21

Processing Fee (excluding Floor/Cap)

NZD (million)

63.6

Processing Fee (after Floor/Cap)

NZD (million)

63.6

Jul/Aug

Throughput

Barrels (million)

6.82

9.31

Gross Refining Margin

USD (million)

63.5

Gross Refining Margin (excluding Floor/Cap)

USD (million)

63.5

9.31

Interim Cap adjustment

NZD (million)

0.0

Processing Fee (after Floor/Cap)

USD (million)

44.4

6.52

Processing Fee (excluding Floor/Cap)

NZD (million)

62.2

Processing Fee (after Floor/Cap)

NZD (million)

62.2

Sep/Oct Explanatory Note Throughput

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.

Gross Refining Margin

The Gross Refining Margin is calculated in USD as the difference between the value of products and the cost of feedstock for each refining customer. The value of products use Singapore quoted prices adjusted for New Zealand quality and the cost of importing those products to New Zealand. Feedstocks are valued using the notional market values adjusted for the cost of getting the feedstock to the refinery. The Gross Refining Margin incorporates the cost of hydrocarbon used as fuel and incurred as process losses.

Typically, Refining NZ has an uplift over the Singapore complex margins of around USD 3.00 to 4.00 per barrel. The value of the uplift varies due to fluctuations in freight rates, product quality premia, crude market premia and operational performance. Product quality premia are the cost differentials between products made to New Zealand quality and products made to the quality that applies to quoted prices in Singapore. Crude market premia are the cost differences between the crude types actually processed at Refining NZ and Dubai (used as basis for the Singapore complex margins).

Margin Cap/Fee Floor Adjustment

The processing agreements with our customers contain both Floor and Margin Cap clauses, both effective over a full calendar year.

The Fee Floor is the minimum Processing Fee due, for a calendar year, up to a current maximum of NZD 131 million. If the year-to-date Processing Fee is below the pro-rata Fee Floor, then an interim pro-rata Fee Floor payment is made by the Customers. Should the Processing Fee exceed the Fee Floor in future months any pro-rata Fee Floor payments that have been made are repaid to the Customers.

The Margin Cap limits the Gross Refining Margin for each customer to a maximum of USD 9.00 per barrel over the calendar year. Should the Gross Refining Margin fall below the Cap in future months any pro-rata Cap reductions that have been made are repaid by the Customers.

The Cap and the Floor are subject to year-to-date adjustments.

Any balance remaining at the end of the year cannot be carried over to the next year.

Gross Refining Margin after Cap/Floor

The Gross Refining Margin adjusted for any impacts of the Cap or Floor.

Processing Fee

The Processing Fee is 70% of the Gross Refining Margin after any adjustment for the Cap or Floor. The Processing Fee is paid by our customers in NZD.

Notes:

  1. The information provided in this announcement relates to refining operations only. Revenue from pipeline or other activities is not included.

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

Appendix II - Historical Analysis Intake/Production, Gross Refining Margin and Processing Fee

2013

2014

2015

2016

2017

Jan/Feb

Barrels 000's

6,786

6,740

7,056

6,826

7,160

RNZ USD GRM per barrel 1)

4.18

3.86

9.91

7.96

6.58

Singapore Dubai Complex GRM

3.45

0.70

5.40

4.95

3.42

Uplift vs. Singapore Dubai Complex 3)

0.73

3.16

4.51

3.01

3.16

NZD Processing Fee (million) 2) 4)

23.7

22.0

59.6

57.0

45.9

Mar/Apr

Barrels 000's

7,151

6,146

7,411

7,471

5,140

RNZ USD GRM per barrel 1)

5.03

-2.84

8.77

1.84

9.35

Singapore Dubai Complex GRM

2.73

1.36

4.82

3.18

3.02

Uplift vs. Singapore Dubai Complex 3)

2.30

-4.20

3.95

-1.34

6.33

NZD Processing Fee (million) 2)

30.0

20.7

62.3

14.8

48.1

May/Jun

Barrels 000's

7,048

6,976

6,416

6,837

7,755

RNZ USD GRM per barrel 1)

6.84

3.48

8.55

6.26

7.63

Singapore Dubai Complex GRM

2.92

0.10

4.24

2.13

2.90

Uplift vs. Singapore Dubai Complex 3)

3.92

3.38

4.31

4.13

4.73

NZD Processing Fee (million) 2)

41.8

21.1

48.9

43.3

58.4

Jul/Aug

Barrels 000's

7,194

6,298

7,519

6,833

7,511

RNZ USD GRM per barrel 1)

6.05

6.75

7.66

6.20

8.87

Singapore Dubai Complex GRM

2.42

-0.55

2.52

1.86

4.70

Uplift vs. Singapore Dubai Complex 3)

3.63

7.30

5.14

4.34

4.17

NZD Processing Fee (million) 2)

38.5

21.3

63.5

41.3

63.6

Sept/Oct

Barrels 000's

6,730

6,388

7,221

7,251

6,816

RNZ USD GRM per barrel 1)

2.95

7.54

9.47

7.49

9.31

Singapore Dubai Complex GRM

-1.58

2.54

5.12

3.18

4.73

Uplift vs. Singapore Dubai Complex 3)

4.53

5.00

4.35

4.31

4.58

NZD Processing Fee (million) 2)

16.8

21.0

71.8

52.5

62.2

Nov/Dec

Barrels 000's

5,693

7,127

7,017

7,447

RNZ USD GRM per barrel 1)

1.82

9.98

10.82

9.20

Singapore Dubai Complex GRM

-0.22

4.48

6.37

4.19

Uplift vs. Singapore Dubai Complex 3)

2.04

5.50

4.45

5.01

NZD Processing Fee (million) 2)

8.8

62.4

73.0

67.6

Total

Barrels 000's

40,602

39,676

42,639

42,665

34,382

USD GRM per barrel 1)

4.58

4.96

9.20

6.47

8.27

NZD Processing Fee (million) 2)

159.7

168.4

379.2

276.6

278.3

YTD Cap adjustment

NZD Processing Fee (million) 1)

14.4

  1. Excludes Fee Floor/Cap adjustment

  2. Includes Fee Floor/Cap adjustment

  3. RNZ uplift vs. Singapore Dubai Complex GRM i s in USD per barrel

  4. Jan/Feb 2017 excludes a prior period adjustment of ($1.5m)

The New Zealand Refining Company Limited published this content on 20 November 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 19 November 2017 21:40:02 UTC.

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on NEW ZEALAND REFINING COMPA
11/27NEW ZEALAND REFINING : Transpower Outage Update
PU
11/21NEW ZEALAND REFINING : Throughput and Margin Report - Sept/Oct 2019
PU
11/06NEW ZEALAND REFINING : SPH Notice - Wellington Management Group LLP
PU
11/04NEW ZEALAND REFINING : Refining awards scholarships to Bream Bay students
PU
10/29NEW ZEALAND REFINING : Refinery gets go ahead for Solar Farm
PU
09/17NEW ZEALAND REFINING : Operational Report for July-August 2019
PU
09/16NEW ZEALAND REFINING : Government Pipeline Inquiry update
PU
09/16NEW ZEALAND REFINING : Resignation of Chief Executive Officer
PU
09/05NEW ZEALAND REFINING : Climate Change Proceedings
PU
08/20NEW ZEALAND REFINING : Distribution Notice
PU
More news
Financials (NZD)
Sales 2019 371 M
EBIT 2019 38,8 M
Net income 2019 17,6 M
Debt 2019 235 M
Yield 2019 4,60%
P/E ratio 2019 34,5x
P/E ratio 2020 9,15x
EV / Sales2019 2,25x
EV / Sales2020 2,00x
Capitalization 599 M
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 3
Average target price 2,26  NZD
Last Close Price 1,94  NZD
Spread / Highest target 34,5%
Spread / Average Target 16,5%
Spread / Lowest Target 3,09%
EPS Revisions
Managers
NameTitle
Michael Fuge Chief Executive Officer
Simon Christopher Allen Chairman
Denise M. Jensen Chief Financial Officer & Secretary
Robin Baxter Engineering Manager
Vanessa Cynthia May Stoddart Independent Director