The country’s largest fuel retailer has made a $58 million loss in the six months to September, reflecting the harsh impact the nationwide lockdown had on the industry.
The result for Z Energy compares to the same time last year, when it made a $28m profit.
Chief executive Mike Bennetts said the impacts of Covid-19 were widely felt.
“This result was driven by the impacts of Covid-19 due to higher cost inventory sold at lower product prices and reduced volumes during lockdown with additional reduction in fuel demand for jet fuel in particular.
“Lower than expected regional refining margins led to a reduction in refinery production and fee floor payments to Refining NZ were required, resulting in a net refining margin loss of $14m.”
Revenue from continuing operations was just under $1.5 billion, down 39 percent on the same time last year.
Chief financial officer Lindis Jones said the company remained on track to reduce its costs by $48m by the end of the financial year and had so far reduced operating expenditure by $22m.
“The cost savings achieved not only help mitigate the financial impacts of Covid-19 this year but result in embedded efficiencies that will generate substantial, ongoing savings in future periods,” Jones said.
The cuts came from reductions in marketing, customer offers, professional fees and third party procurement.
The company also made one-off savings of $14m, including $3.4m from taking up the government’s wage subsidy scheme offer.
Bennetts said prior to applying, Z Energy had already cancelled $8m of employee bonuses and cancelled the 2020 full year dividend.
He said the second half of the year would be materially different to the first half.
“We’ve proven we’re operationally and financially resilient to all but the most extreme impacts of Covid-19. Our focus for the second half is cementing the structural costs savings already identified while we continue to vigourously compete in both retail and commercial markets.”