11 May 2017

Z reports stronger profit after acquisition

12:26 pm on 11 May 2017

The country's biggest fuel company, Z Energy, has reported a solid lift in its profit because of the Caltex acquisition and higher crude oil and refined fuel prices.

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Photo: RNZ

Its net profit in the year to March rose $179 million to $243m, when compared with the same period last year.

Z's underlying profit climbed 18 percent to $176m.

The full-year result is higher after 10 months contribution from the Caltex business, which Z bought in June last year, as well as a rise in crude oil and refined fuel prices in the second-half.

Chief executive Mike Bennetts said the acquisition gave it the muscle to compete in a competitive environment.

"We think fuel margins are top of cycle and expect some softening over the coming year as a result of the multitude of new participants in the industry fighting for a share of the market.

"The Caltex acquisition gives us the scale and a portfolio of options to deliver distinctive value without an undue reliance on fuel margin," he said.

Z will pay a higher final dividend of 19.9 cents per share.