3 May 2018

Z Energy's profit rises

11:20 am on 3 May 2018

The country's biggest fuel company, Z Energy, has reported a modest lift in its profit as competition and supply disruption partly offset increased sales and higher margins.

no caption

Photo: RNZ

Its net profit in the year ended March rose was $263 million compared to last year's $243m.

Z's underlying profit, regarded as a better indicator of performance, rose 16 percent to $205m.

Petrol sales were slightly down on last year but diesel and aviation fuel sales were up, and its non-fuel revenue was also higher.

However, it said price discounting by rivals had an effect on sales, as did the disruption to supplies from the Marsden Point refinery, which resulted in temporary fuel shortages in the Auckland region.

Chief executive Mike Bennetts said the company was benefiting from its takeover of Caltex two years ago.

"The business is delivering as promised, with initiatives in the short and medium term to provide profitable growth in earnings."

Among new initiatives to boost earnings are a deal to supply fuel to the New World and Pak 'n Save branded petrol stations as well as redeeming fuel vouchers for the two supermarket chains.

The company said it expected operating earnings of between $450m to $480m for the coming year, little changed from the past year.

Z Energy increased its dividend by 2 cents a share to 21.9 cents.

Get the RNZ app

for ad-free news and current affairs