Despite declining revenue and increasing costs, Z made huge gains in purchasing crude oil overseas, and in foreign exchange rates.
In early-August, Z's co-owners Infratil and the New Zealand Superannuation Fund sold 60% of the service stations, each reaping $420 million from the $840 million sale. Infratil and the NZ Superannuation Fund bought the company, then known as Shell, in 2010 for $696.5 million. Each retain a 20% shareholding.
Craigs Investment Partners broker Peter McIntyre said the result was ''reasonable'' and the company was ''on-track'' to meet forecasts, but noted its discounting had been at the expense of not gaining market share.
''While revenue's down, its raw input costs in purchasing crude oil and other products were down by $154 million, which is what helped the bottom line [profit],'' Mr McIntyre said.
Z said purchases of crude and other product were down from $1.28 billion a year ago to $1.39 billion.
Z chief executive Mike Bennetts said growth was from a combination of increased fuel margins, store margins growing from recent upgrades and ''slightly higher'' refining margins compared with the same period a year ago.
For the six months to September, Z booked a decline in revenue from $1.49 billion to $1.39 billion. Operating expenses grew from $54.1 million to $106.6 million.
Mr McIntyre said while gross fuel margins for the half year had grown from $236 million to $245 million, the latter margin was less than analysts expected because of fuel discounting.
Mr Bennetts said, ''Over the last three years, we have seen much needed improvement in fuel margins, which are enabling the industry to begin to invest after years of continual cost-cutting while still delivering competitive prices and value to customers.''
A half-year dividend of 7.7c per share would be paid, with Mr Bennetts saying Z would meet its prospectus forecast to pay out 80% of its after-tax profit in dividends.
