Z Energy says petrol sales were lower but diesel sales grew modestly. Photo: RNZ / Richard Tindiller
The country's biggest fuel retailer, Z Energy, says it is still in recovery mode as profits track below pre-Covid levels, despite higher prices boosting revenue.
Its net profit of $108 million for the nine months ended December was tracking lower than the prior full year ended March 2022, which was $269m.
Z was in the process of changing its reporting period to match its new parent company Ampol, therefore no comparison was available for the prior corresponding period.
The company's preferred profit measure, replacement cost (RC), for the nine-month period was $62m, compared to $34m for the 2022 financial year.
Revenue for the period was $6 billion, already higher than the $5b recorded for the prior full year, due to higher fuel prices.
Z Energy outgoing chief executive Mike Bennetts said the RC profit was two-thirds below pre-Covid-19 levels.
Z Energy outgoing chief executive Mike Bennetts Photo: RNZ / Alexander Robertson
"So we are one of those businesses that are coming through Covid like many others but our recovery is taking a number of years," Bennetts said.
"We've got cost increases happening in our business that are well above inflation so that has been a bit of drag on our profit performance."
Jet fuel sales were up about 40 percent year-on-year, as aviation rebounded following the loosening of Covid-19 restrictions, he said.
Petrol sales were lower but diesel sales grew modestly.
Bennetts said the company faced pressure on its margins amid the volatility caused by the war in Ukraine.
"For example, we would typically see a 1 to 2 or 3 cents a litre change in daily prices on the international markets. In the world post-Ukraine, some of those daily movements have been 8, 9, 10 cents a litre," Bennetts said.
Z Energy was doing its best to moderate the impact on customers, he said.
"If [the price movement] all goes in one direction, we could suddenly find ourselves 20 to 25 cents a litre worse off from a margin perspective than we were three or four days ago, or even better off," Bennetts said.
"What we tried to do last year, and we do it every year, is just to make sure we're not passing on daily fuel price increases. We try to absorb that a bit like a shock absorber."
Although, absorbing the cost was difficult last year due to the scale of the daily price movements, Bennetts said.
Integration with Ampol was progressing well, and Z was moving management of supplies for New Zealand to Ampol's operations in Singapore, he said.