Z Energy has reported a lower profit with higher fuel prices prompting people to avoid the pump and the lengthy shutdown of the Marsden Point refinery reducing oil margins.

The country’s biggest fuel company’s net profit for the year ended March was $186 million compared to last year’s $263 million.

Underlying profit was down 13 percent to $178 million and underlying earnings came in as expected, 3 percent lower than last year.

Z Energy chief executive Mike Bennetts said the company had seen some of the most difficult trading conditions in its history in the first half of the year, but things improved.

“The sudden and dramatic fall in underlying commodity prices in the third quarter meant we regained some market position as more normal trading conditions returned during the second half of the year.”

The company’s bottom line was affected by the prolonged maintenance shutdown of Refining New Zealand’s plant, which it has a share in, and the record high pump prices reducing customer demand.

Bennetts said higher prices put people off visiting the pump.

“High retail pump prices meant that some customers sought alternatives to private transport, traded down from premium fuels, or simply reduced their fuel consumption. In the second half of the year some of this customer demand returned to the industry, but not all.”

Z Energy confirmed a final dividend of just over 30 cents per share, and at the same time announced how it would simplify its policy from now on, seeking to pay dividends of 70 to 85 percent of operating cashflow.

The company gave underlying earnings guidance for the current year of between $450 and $490 million.

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