Overview. Context Results Strategic update Look forward

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3 Disclaimer This presentation contains forward looking statements concerning the financial condition, results and operations of The New Zealand Refining Company Limited (hereafter referred to as Refining NZ ). Forward looking statements are subject to the risks and uncertainties associated with the refining environment, including price and foreign currency fluctuations, production results, demand for Refining NZ s services and other conditions. Forward looking statements are based on management s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward looking statements include among other things, statements concerning the potential exposure of Refining NZ to market risk and statements expressing management s expectations, beliefs, estimates, forecasts, projections and assumptions. Forward looking statements are identified by the use of terms and phrases such as anticipate, believe, could, estimate, expect, goals, intend, may, objectives, outlook, plan, probably, project, risks, seek, should, target, will and similar terms and phrases. Readers should not place undue reliance on forward looking statements. In light of these risks, results could differ materially from those stated, implied or inferred from the forward looking statements contained in this announcement. Each forward looking statement speaks only as of the date of this announcement, 20 August

4 Overview Context Results Strategic update Look forward 4

5 Two different halves DELIVERING WORLD CLASS Health and safety PERFORMANCE H1 14 H1 15 TCRF, rolling 12-month (# per million hours) LTIF, rolling 12-month (# per million hours) Tier 1 process safety incidents (#) 1 1 Releases outside consent (#) 2 0 Throughput (million barrels) Operational cash flow* (NZ$m) (19.1) Gross Refinery Margin (US$/barrel) % 95.4% Net profit/(loss) after tax Group (NZ$m) (7.0) 65.3 Crude price (US$/barrel) Exchange rate (US$) DELIVER A WORLD CLASS Environmental PERFORMANCE BUILD ON Quality and reliability ELEMENTS OF OUR CUSTOMER PROMISE IMPROVE OUR Competitiveness Operational availability * Operational cash flow pre cap adjustment (H1 2015), fee floor (H1 2014), BAU CAPEX and financing cost. See Appendix 2: non-gaap reconciliation. 5

6 Strong first half 2015 gasoline demand growth Driven by US price demand elasticity and a growing China and India middle class 2015 year on year gasoline growth US + 2.5% 300 kbd China % 260 kbd India + 9.8% 60 kbd 6

7 Weaker 2nd half with positive medium-term According to oil industry experts Next Half Year mb/d new capacity outweighs demand Margins boosted by closures, delays, strong demand China car sales slip 3.4% but India up Oil co s turn down downstream investment No new refineries Additions to 2020 down by 2.8mb/d China/India 2015 could lead to prolonged higher margins New ME capacity to be relieved by Aus, Japan, Taiwan closures Asian refining margins weaken, and runs reduced 7

8 Margin at the cap US$/barrel Refining NZ Margin Refining NZ margin H Typical uplift vs Singapore Complex Period-specific elements: - RNZ crude vs. Dubai - Margin initiatives - Plant availability - High throughput - Residue de-stocking 4.82 Singapore complex margin 2014 H2 Total uplift achieved for period (0.60) (0.50) Singapore Complex Range 1-2 Period-specific: - Low crude price (fuel cost) - Product lag - Gasoline strength Singapore Complex for period

9 Highly competitive GRM (US$/bbl) H H Competitive 2013 Not competitive H Footnote: 30 is the customers approximate crude and product working capital days using Refining NZ WACC is the weighted average capital cost of the individual customer 1.10 is the approximate per barrel coastal freight cost between Whangarei and the import centres of Tauranga, Seaview and Lyttleton GRM excludes floor, ceiling or shutdown effect 9

10 Overview Context Results Strategic update Look forward 10

11 Leveraging core strategic strengths High operational availability, on-spec fuels * Excluding pass through costs of natural gas and sulphur 11

12 Costs under control Some forex and inflationary pressure Year on year See Appendix 1 for non-gaap reconciliation First half Latest estimate 12

13 Borrowings down $73 million 13

14 Return to dividend Major Capex > 40-60% NPAT Interim dividend of Top quartile NZX 50 Net yield 5.3% Gearing 5 cents per share full imputation credits 27% vs % 14

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16 Growth going forward Business enhancing initiatives continue in 2015/ HCU ammoniation US$0.08/bbl 2015 Process unit initiatives CO2 facility (BOC) US$0.04/bbl not in GRM /17 TMH Post TMH initiatives US$ /bbl (being developed) US$0.15+/bbl 2018 Bigger crude cargoes US$ /bbl 2016 H2 More natural gas US$ /bbl 16

17 TMH to plan 17

18 Progressing crude cargo proposal Progress to date ~40 consultations with Tangata Whenua, key stakeholders, public Studies underway: Channel design Ship simulation Hydrodynamics Geomorphology Ecology Marine mammals Recreation One of a number of channel design options currently being investigated 18

19 Good progress on improving organisational performance Maintenir DIY Honeywell Progress All employee share scheme Strategic Alliancing - Pro-consulting International Patrick Rottiers Simulator for operator training Lean Refining NZ BDO Revera 19

20 Overview Context Results Strategic update Look forward 20

21 Revised profit matrix NPAT and borrowings USD Exch. Rate Actual H1 Forecast H2 Margin Actual H1 USD Forecast H2 USD Throughput (Mbbl) Full Year USD NPAT, $m Borrowings, $m (5c interim div) TMH ($m) Shutdowns - Units - Timing - Duration (weeks) growth PFU/CDU1 HCU TBS* Complete ~3 H1 ~2 *Hydrocracker unit top bed skim Capex ex TMH ($m) The profit matrix is subject to successful completion of the current re-negotiation of the collective agreement with the EPMU and First Union Industrial action could lead to a downward revision of these figures including a delayed start-up of TMH 42 Production, Mbbl 63 Non Processing Fee Revenue, $m 72 Depreciation, $m 21

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23 Appendix I Reconciliation of Non-GAAP information Costs used to measure the delivering of our cost promise represent total cash operating costs incurred by the Parent Company. This is reconciled to the financial statements as follows: Full Yr 2012 $m Full Yr 2014 $m H $m H $m Cash costs market promise (Parent only) Allowance for structural cost increases* - - (5) Other operating losses Consolidation entries Depreciation and disposal costs Total Expenses - per Group financial statements - * As described in August 2013 analyst briefing 23

24 Appendix 2 Reconciliation of Non-GAAP information Cash generated from operation relates to the Parent Company, prior to adjustments for the cap/floor. This is reconciled to the financial statements as follows: H $m H $m (19.1) Cap/floor payments 31.5 (4.4) Parent Company cash generated from operations Consolidation entries (0.7) 0.2 Group - cash generated from operations (8.6) Cash generated from operations Interest/GST/income tax Net cash inflow from operating activities 24