9 May 2014

Z Energy expects operating profit rise

6:50 am on 9 May 2014

Z Energy expects its annual operating profit this year will rise by up to about 10 percent, reflecting benefits from its agreement with Refining New Zealand and new service stations.

The petrol station operator is expecting the operating result will be between $220 million and $240 million for the year ending March 2015.

That compares with the $219 million it reported for the 12 months to March this year, which, at 11.7 percent up, exceeded its forecasts.

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Photo: RNZ

Z Energy's reported net profit for the year fell 30.7 percent to $95 million, reflecting profits from selling and leasing back properties that were booked the previous year.

Chief executive Mike Bennetts said the company deliberately chose to forego volumes to maintain profit margins.

The company's market share is down 2 percentage points from April 2010, when Shell sold the business.

Mr Bennetts said his company had had a good year, although low refining margins and the prolonged shutdown at Refining New Zealand, of which Z owns just over 15 percent, blotted its copybook somewhat.

He said under the company's new strategy he expected to add between $40 million and $50 million in annual operating profit by 2018.