The New Zealand Refining Company says the stronger New Zealand dollar and shrinking margins have cut the company's half-year profit.
The country's only oil refiner made $29 million in the six months to June, compared to $52.5 million in the same period a year ago.
Revenue fell 26% to $135 million, though New Zealand Refining's Ken Rivers says margins have been relatively healthy at between $US5 and $US7 a barrel, compared to less than $US1 at the end of last year.
Mr Rivers says processing fee income fell, despite an increase in production capacity.
He says demand for diesel indicates the recovery is continuing, though margins may come under pressure as refinery capacity has started to pick up.
Mr Rivers says if the processing fee and exchange rate remains at current levels, the company will pay a full year dividend, which it cut last year.