Z Energy has warned unprecedented competition and tighter margins have hurt its earnings and it has been forced to downgrade its forecasts for the current financial year.
Photo: RNZ
The company revised down its underlying profit guidance by as much as 20 percent to between $390 million and $430 million in the year ended March, from a previous range of $450m to $490m.
It said refining margins had been weak over the first four months of the year but had they had improved in August.
However, it did not expect the elevated level to continue and was forecasting lower levels through to the end of the calendar year.
Z Energy estimated the reduced refining margin would impact earnings by $10m.
It said trading conditions in the first five months of the year had also been affected by lower retail volumes for Z and Caltex retail brands, and estimated its full-year profits would be down by $50m as a result.
"The intensity has shown up as unprecedented levels of discounting, increased frequency and level of discount days, in addition to increased promotional activity from competitors on price boards and through their respective loyalty programmes," the company said in a statement.
It said Caltex's volumes had been particularly hit following changes to its customer loyalty programme.
The company also dropped its dividend guidance to between 48- and 50 cents a share, from a previous range of 48- to 54 cents.