The Marsden Point refinery. File pic Photo: 123rf.com
Channel Infrastructure, the former Marsden Point refinery operator, has reported its first profit in over three years after a successful conversion to a fuel import only terminal.
Key numbers for the year ended December compared with a year ago:
- Net profit $11.9m vs $552.6m loss
- Revenue $158m vs $234.1m
- Operating earnings $57.5m
- Interim/final dividend 5 cents a share vs no dividend
- Special dividend 2 cents per share
The company, previously called Refining NZ, shut down fuel processing last year, taking a half a billion dollar loss as it wrote off the refinery.
Chief executive Naomi James said the company has successfully changed its business, safely and to budget, while supporting its workforce through significant changes, and further work was on schedule .
She said the company handled 56 import shipments in nine months with more than 2.2 billion litres of fuel landed.
"Through 2022, aviation demand had recovered to 70 percent of pre-Covid levels prior to the most recent weather impacts," she said.
"Diesel demand has remained strong and petrol demand recovered through the year as Covid restrictions were lifted."
Well placed to meet fuel security measures
The government brought in a package of fuel security measures last November to improve fuel supply chain resilience and security.
"With its tank capacity and pipeline direct to Auckland, Marsden Point is well placed to support the incoming minimum Domestic Stockholding Obligation (DSO) and 70m litre domestic diesel fuel reserve announced by government to ensure New Zealand's fuel security," James said.
The mix of imports was expected to change over time to meet changing consumer demands, with the shift to electric vehicles, biofuels and continuing growth in aviation, she said.
"With the latest update showing stronger demand for jet fuel and diesel, this outlook confirms a clear path for long term utilisation of Channel's jetties, tanks, and pipeline direct to Auckland to supply increasingly renewable jet fuel and diesel to Auckland and Northland, long in the future."
James said improving supply chain resilience was a national priority, and rising demand for jet fuel would need the industry and government to work together to ensure fuel security.
"In addition to 180m litres of shared terminal capacity, over half of the almost 100m litres of contracted private storage has now been commissioned, with the remainder anticipated to be available around mid-2023.
"Additional terminal storage was contracted in the second half of the year, which is expected to deliver c$25m of additional revenue over five years."
FY23 guidance
The company confirmed the FY23 guidance it provided in November, with revenue expected to be in the range of $125m to $128m and operating earnings expected to be between $82m and $86m.
Channel Infrastructure expected to pay its shareholders a dividend of between 9 cents and 11 cents per share.