Operational Report for March/April 2021

HIGHLIGHTS
• Excellent personal health and safety performance continued with no recordable injuries.
• The four week maintenance turnaround, which included the first statutory inspection of the CCR Platformer unit, was completed safely, to schedule and below budget.
• RAP volumes were similar to January/February, with a slight recovery in jet volumes since the Australia/New Zealand travel bubble was opened in mid-April.
• Processing Fee revenue was NZ $23.5 million, including Fee Floor payments of $18.2 million reflecting the impact of low margins and the turnaround.
• Simplified refinery continued cash neutral operations at the Fee Floor. April’s net debt closed at $234.6 million.

COMMENTARY
Refining NZ’s excellent personal health and safety performance continued with no recordable injuries. The Company reported a Tier 1 incident related to an LPG leak on a line. No one was hurt during the incident and the leak was safely isolated and repaired.

The four-week maintenance turnaround for the CCR Platformer, crude distillation unit and associated plant was safely completed in March, to schedule and below budget. The turnaround scope included the first statutory inspection of the CCR platforming unit since it was commissioned in 2015. Good weather for the duration of the shutdown coupled with very little emergent work from equipment inspections resulted in the turnaround being delivered below budget.

RAP throughputs at 2.4 Mbbls, were higher than the same period last year and c.70% compared to the same period in 2019, due to the lower jet fuel demand at Auckland International Airport. We have seen a slight recovery in jet volumes since the Australia/New Zealand travel bubble was opened in mid-April, but volumes still remain low at c.40% of pre-COVID levels. Combined petrol and diesel RAP throughput for March/April was similar to the comparable period in 2019.

The March/April GRM was US$1.50/bbl, generating processing fee revenue of NZ$5.3 million, prior to Fee Floor top ups of NZ$18.2 million. Singapore Dubai complex margins for the March/April period averaged US$-1.99/bbl impacted negatively by demand destruction due to COVID resurgence, first in Europe and then in India and other Asia-Pacific countries. Asian refinery maintenance in the period did not lend the expected support to margins. Refining NZ’s GRM uplift over the Singapore margin was US$3.50/bbl.

In addition, the Company earned NZ$5 million in terminal fees from the import of refined products to Marsden Point during the turnaround.

April’s net debt closed lower than expected at NZ$234.6 million reflecting the savings on turnaround capex. The Company remains on track to deliver cash neutral operations across the full year.

Import terminal negotiations are continuing with customers.


Authorised by:
Chris Bougen
General Counsel and Company Secretary

For further information:
Laura Malcolm
Communication Advisor
[email protected]
+64 (0)21 0236 3297

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