The company said in a statement to the NZX yesterday its operational performance for the first quarter of the financial year had been affected by unexpected levels of disruption in its supply chain.
It was also hurt by the record high pump prices during the first quarter.
Because of those events, the operating earnings guidance for the full year had been revised down to between $445million and $455million from the previous range of $450million to $486million.
Forsyth Barr broker Damian Foster said the extended refinery outage forced Z to import crude at unfavourable prices, forced Z to export fuel oil at low or negative margins, reduced the benefit the company normally received from using the refinery and reduced the Refining New Zealand dividend assumption.
Those factors combined to reduce guidance by about $20million.
The rising crude oil environment resulted in the lag effect on earnings continuing and Z had estimated the impact to be $10million in the first quarter, he said.
''We had anticipated these two issues impacting on Z earnings but the magnitude of the downgrade is greater than expected.''
It was important to note the two issues were one-off in nature. To emphasise the point, the company had maintained its dividend guidance.
The operating statistics released yesterday for the first quarter were softer than was hoped, Mr Foster said.
Petrol sales volumes were down 6% on the previous corresponding period and retail diesel volumes were flat. Z volumes were up and Caltex volumes fell.
Commercial diesel volumes were up 2.6% due to winning a large contract from BP last year. Z retail diesel volumes would have also been boosted from the contract, he said.
Industry volumes had increased in the quarter by 1.4%, meaning Z's market share had again declined, down 1.3% from March to 43.6%.
Weekly shop sales were also down, the first quarter shop sales had fallen since Z started providing such statistics, he said.
''Overall, this is a weaker quarter than we would have hoped. We will be updating our forecasts following the guidance.''
Z said it did not expect the current drivers of the market to recur and the company was able to moderate the impact of some volume loss during the remainder of the year, as it had in the past.
While the market for the underlying of oil was volatile, the market was forecasting a lower barrel price for the remainder of the year, giving Z confidence in its revised guidance to partially recover the adverse effects of the first-quarter performance.
The Brent crude forward curve was showing prices reducing from the end of the June quarter from $US78 ($NZ115) a barrel to $US72 a barrel by September and $US72 a barrel in March next year.
