Profits were down more than 80%, while production was up almost 1%.
Analysts had picked after-tax profit to be down between $4million to more than $6million lower than the actual $11.4million posted yesterday.
Revenue for its half year to June was down 24%, from $203.9million a year ago to $155.6million while after-tax profit declined 82%, from $65.2million a year ago to $11.4million.
Refining New Zealand (RNZ) chief Executive Sjoerd Post described the result as a solid start with profit ''in line'' with the profit matrix released to the market in February.
''We fully expected the stellar refining margins seen in 2015, where the company operated at cap, or near cap refining margins, to return to more normal levels,'' he said.
Throughput of crude rose by 251,000 barrels, or 0.95%, from 20.9million barrels to 21.1million barrels.
Last year's gross refinery margin had plunged from $US9.09 per barrel to $US6.37, and if including the impact of a shutdown period, was at $US5.25.
Forsyth Barr broker Suzanne Kinnaird said RNZ's result was better than the brokerage's forecast, for two key reasons.
Its pipeline revenue was up $2.5million higher than forecast at $17.6million, and also $2.8million higher than a year ago, and operating costs were $4.2million lower than forecast.
Combined, those two factors explained earnings before interest, tax, depreciation and amortisation coming in $6.4million better than expected, at $63.3million, Mrs Kinnaird said.
''Other items were largely as expected, such as the net profit after tax of $11.6million was $6.3million higher than forecast,'' she said.
The big drop from a year ago was anticipated due to lower refining margins, a production outage lower uplift against the Singapore benchmark margin and a lower Singapore benchmark margin, which all combined to bring processing fee revenue down 33% on last year, she said.
Craigs Investment Partners broker Peter McIntyre said the result was materially impacted by the hydrocracker production shutdown.
''The costs were slightly lower than anticipated, leaving net profit after tax around $4million ahead of our estimate,'' Mr McIntyre said.
''While the outlook is modestly positive, we remain concerned that the dividend cut [5c last year to 3c] won't be taken well by the market,'' he said.
The company said it had continued to progress strategic initiatives, including a proposal to bring bigger crude shipments to Marsden Point, doubling the refinery's use of natural gas, and increasing capacity on the refinery-to-Auckland product pipeline.
Mr Post said RNZ would stick to its core strategic strengths of plant reliability and quality fuel production, managing the cost base, optimising use of the Te Mahi Hou plant and progressing revenue growth initiatives.
''In the first half, global refining margins have been supported by ongoing strong gasoline demand in the US, China and India and lower crude prices.
''[However] at the same time there is near term pressure from product overhang, the result of a build-up of surplus stocks,'' he said.
