Operational Update for November - December 2021

Mon, Jan 24 2022 09:33 am

• Excellent personal and process safety performance continued with no recordable injuries or Tier 1 or 2 process safety events.
• RAP volumes were c.12% lower than the same period last year due to Auckland’s lockdowns and border restrictions for most of the period.
• Processing Fee revenue was NZ$23.6 million including Fee Floor adjustments, NZ$27.2 million prior to adjustments.
• December’s net debt closed at NZ$184 million, following the equity raise in December of c.$48.5m. The Company continues to operate cash neutral operations at the Fee Floor.
• Finalised long-term agreements with customers for the provision of import terminal services and satisfied lender conditions precedent for conversion funding and lender consents.
• Refinery run-down plans and upgrades to terminal facilities are underway in preparation for the conversion of the Marsden Point site from refinery to import terminal operations from April 2022.

Refining NZ’s excellent personal and process safety performance continued with no recordable injuries or Tier 1 or 2 process safety events.

RAP throughput of 2.3 Mbbls was c.12% lower than the same period last year. This was primarily due to a reduction in petrol demand caused by the Auckland border only opening in mid-December 2021 compared to the COVID Level 1 restrictions that applied in November/December 2020. By year end, petrol volumes had recovered close to pre-COVID levels and diesel volumes were above pre-COVID levels. The international border closure continues to impact jet fuel demand significantly, with demand for the period at c.30% of pre-COVID levels.

The November/December GRM was US$4.99/bbl, generating processing fee revenue (before Fee Floor adjustments) of NZ$27.2 million, or NZ$23.6 million after Fee Floor adjustments to repay Fee Floor payments from earlier in the year. Singapore Dubai complex margins for the November/December period averaged US$0.56/bbl, impacted by the uncertainty around the Omicron COVID-19 variant. Refining NZ’s GRM uplift over the Singapore margin was US$4.42/bbl, impacted by the export of jet fuel, petrol and fuel oil during the period to help manage stocks, following reduced New Zealand product demand.

The Company has delivered cash neutral operations across the full year, including Strategic Review restructuring and implementation costs, with December net debt closing at NZ$184 million (compared to $230 million as at 31 October 2021) following the equity raise of approximately $48.5m. The equity raising was successfully completed as a $39 million underwritten placement and a $9.5 million Share Purchase Plan, and will enable the Company to pursue complementary growth through private storage services.

In November, the Company finalised long-term agreements with its three existing customers (bp, Mobil, Z Energy) for the provision of import terminal services and the Board made the Final Investment Decision to proceed with the conversion and a name change to Channel Infrastructure NZ Limited (NZX:CHI) to align with the commencement of import terminal operations from April 2022. The Company has also satisfied the conditions precedent to lender consents and conversion funding. Refinery run-down plans and upgrades to terminal facilities are underway in preparation for the conversion of the Marsden Point site from refinery to import terminal operations.

As previously announced, this will be the final bi-monthly Operational Update. The Company will provide quarterly updates on the conversion project through 2022, with the first quarterly report in April 2022.


Authorised by:
Chris Bougen
General Counsel and Company Secretary

Media Contact:
Laura Malcolm
Communications Advisor
+64 (0)21 0236 3297

Announcement PDF

Markets News

Markets FREE
Eroad shares on the road to recovery
Ella Somers | Thu, 07 Jul 2022

Jarden wealth management director Greg Main said Eroad was continuing its “recent recovery” and rising strongly after being heavily sold down.

Markets FREE
AFT Pharmaceuticals launches new range of online medicines in China
Ella Somers | Thu, 07 Jul 2022

The Chinese market for over-the-counter medicines is the world’s second-largest behind the US and was growing rapidly, the AFT Pharmaceuticals managing director said.

Markets FREE
Pushpay wins over Seattle archdiocese as new customer
Ella Somers | Thu, 07 Jul 2022

The church management software firm hasn't been distracted by the takeover talk. 

Markets FREE
NZ dollar hits two-year low
Staff reporters | Wed, 06 Jul 2022

The New Zealand dollar fell to 61.59 US cents at 5pm this evening – the lowest it has been since May 2020.

Climate change
Carbonz resumes trading with creators standing by their credibility
Ian Llewellyn | Wed, 06 Jul 2022

The creators of a voluntary carbon credit and platform to trade them stand by their product.

NZX bond trading hits record in June
Dan Brunskill | Wed, 06 Jul 2022

Investors sought refuge from volatile equity markets by buying bonds and ETFs in June.

Primary Sector
Synlait hikes milk price forecast as kiwi hits two-year low
Rebecca Howard | Wed, 06 Jul 2022

Synlait's new forecast brings it in line with Fonterra.

Supie faces fight for online grocery market share
Dan Brunskill | Wed, 06 Jul 2022

Unlike many start-ups, Supie has big competitors already expanding their services to defend against disruption. 

Vista facing short-term capacity bottlenecks on cloud rollout
Jenny Ruth | Wed, 06 Jul 2022

Longer-term, the cloud strategy is expected to lift per-site revenue by more than 2.5 times and fatten margins by about 40%.

Markets FREE
RBA hikes rates by 50 basis points
Ella Somers | Tue, 05 Jul 2022

The RBA’s hike was widely expected to be either in the 25bp or 50bp camp so the decision to go with a 50bp jump didn’t come as a huge surprise.

Markets FREE
NZ shares start second half of the year more positively
Ella Somers | Mon, 04 Jul 2022

“The kiwi dollar is always going to be like a cork on the waves of global sentiment,” independent treasury adviser Peter Cavanaugh said.

SkyCity facing another probe at Aussie casino
Brent Melville | Mon, 04 Jul 2022

The fallout from Australian money laundering investigations into casino operators Crown and Star Entertainment has put SkyCity's Adelaide property in the regulatory cross-hairs.

Walnuts, sledgehammers and sloppy paperwork
Jenny Ruth | Mon, 04 Jul 2022

Foreign fund managers are often careless about filing substantial shareholder notices but the available remedies have never been used. 

Finance FREE
Money Answers: what's the best share investing strategy in a recession?
Frances Cook | Sat, 02 Jul 2022

Spreading your money through good quality companies, then leaving it alone for a few years is the boring but most likely way to build wealth for most of us. 

Markets market close
NZ stock market finishes first half of 2022 down 18%
Dan Brunskill | Fri, 01 Jul 2022

One analyst said market participants will be glad to see the back of the turbulent second quarter.

Jasper opens secondary market, sets sights on Aussie
Brent Melville | Fri, 01 Jul 2022

Young property guns Jasper are taking their 'sharesies' style property investment model into a more marketable terrain.

NZ stocks lose $55 billion of value in six months
Dan Brunskill | Fri, 01 Jul 2022

Interest rates have skyrocketed in 2022 and sent share prices plunging. 

Markets FREE
Eroad shares fall to all-time low
Ella Somers | Thu, 30 Jun 2022

Fleet management company Eroad dropped 3.4% to $1.42 today – its lowest share price since 2016.

Climate change
Carbonz to resume trading after credibility questioned
Ian Llewellyn | Thu, 30 Jun 2022

After a troubled start, a new carbon trading platform says it will resume operations next week.

News in Brief
NZ King Salmon shuts down sale rumours
Staff reporters | Thu, 30 Jun 2022

The salmon farmer scotched rumours in Australian media it's up for sale.

BusinessDesk owner NZME hits 100,000 digital subscriptions
Oliver Lewis | Thu, 30 Jun 2022

The owner of BusinessDesk has hit a new high, with even more customers choosing to subscribe.

High power prices in NZ – what's the 'new normal'?
Ian Llewellyn | Thu, 30 Jun 2022

Indonesian coal prices are now one of the main drivers of wholesale electricity prices in NZ.

Markets market close
NZ shares fall as market rally evaporates
Dan Brunskill | Wed, 29 Jun 2022

A survey showed US consumer confidence was at its lowest since 2013.

Kiwi chair Mark Ford says property values may fall 5-10%
Jenny Ruth | Wed, 29 Jun 2022

Many of the factors weighing on Kiwi Property's share price are beyond its control, chair Mark Ford told shareholders.