NZRC, which owns and operates the country’s sole refinery south of Whangarei, told the New Zealand Exchange yesterday that it had benefited from international market conditions, where consistently high margins had been available for refineries that had “clean fuel capabilities” and high availability, both of which applied to the Northland refinery.

The company said half-yearly net revenue to June 30, 2006 jumped 29.6% to $212.82 million ($164.26 million for the previous corresponding half year), while after-tax profit from ordinary activities rose 11.3% to $83.16 million from $74.72 million.

Chairman Ian Farrant said the $180 million Future Fuels project, commissioned in August last year, allowed NZRC to not only produce low-sulphur diesel and low-benzene petrol, but also to change its crude diet to a higher percentage of lower-cost, high-sulphur sour crudes, further enhancing the company’s margin.

The actual processing margin achieved for the six months to June was $US8.95 per barrel (up from $7.76/bbl in the 2005 first half), near the $NZ9 cap NZRC has with its main customers – Shell, BP, Mobil and Caltex.

Earlier this month, NZRC reported processing fees of $68 million in May-June but said that would have been $7.2 million higher had the cap not been in place.

Throughput for the latest half-year was marginally higher at 19.4 million barrels (MMbbl) from 19.1MMbbl in the year-ago period.

The company cautioned that while refining margins were expected to remain good, they were not anticipated to stay at recent levels, as refiners could now meet demand in the Asia-Pacific region for lower level sulphur fuels.

Farrant also said the Point Forward study – a $25 million investigation into the feasibility of a three-year, $500 million expansion of the refinery’s capacity by about 20% – was progressing and would be considered by the directors in the first quarter of 2007.

NZRC also announced a fully imputed interim dividend of 10c per share, payable on September 28.