New Zealand Refining (NZR) chief executive, Sjoerd Post described the result as ‘‘outstanding''.
The company posted a substantial year-on-year uplift in its gross refining margin, alongside records for crude intake and processing fee revenue.
‘‘This result proves that our strategy is working, and now that [refining facility] Te Mahi Hou is running it requires only a subtle shift, from one-off projects the size of Te Mahi Hou to smaller capital growth projects with attractive payback periods,'' he said yesterday.
Shares in NZF were up almost 4% to $3.74, after the announcement.
Forsyth Barr broker Suzanne Kinnaird said the result was ‘‘basically in line'' with expectations.
After-tax profit was $2.2million lower than its $152.9million forecast. The main differences were other revenue, down $1.6million on expectations and net interest, $1.8million higher.
‘‘The big question heading into the result was how big was NZR going to go on the dividend?'' she said. Debt repayment was better than expected.
Year end was expected at $209million, but it came in at $193million, enabling NZR to pay a better dividend than forecast.
However, Mrs Kinnaird cautioned care needed to be taken, as NZR had just produced a result which it could beat only if the currency fell, so full-year 2015 should be viewed as ‘‘peak earnings''.
Craigs Investment Partners broker Chris Timms said debt reduction and strong cash flows had been ‘‘key'' for NZR, underpinning the dividend.
While the positives were already priced into in the stock, Mr Timms expected the company strategy to continue during 2016.
Mr Post said there was strong operating cash-flow from increased volumes and refining margins at cap, or near cap levels for much of the year, allowing NZR to reduce net borrowings from $314million a year ago to $193million and to pay an ‘‘enhanced dividend'' of 20c.
NZF had also benefited from an improved NZ-US dollar exchange rate, averaging US70c for the year, against US82c last year, he said.
The Te Mahi Hou (TMH) project, commissioned at the end of November, on budget and three weeks early, was running smoothly, Mr Post said.
Mr Post noted several highlights, including cash generation from operations at $265million was up on the previous year's $67million, while processing fee revenue ‘‘increased significantly'' from $168.4million last year to $379.2million, about $27million up on the previous record set in 2006.
There was a record annual crude intake of 42.6million barrels, 500,000 barrels better than the previous record, posted in 2012. Mr Post said the gross refining margin for 2015 averaged $US9.20 per barrel, prior to cap, against US4.96 per barrel a year ago.
