PERRY WILLIAMS
MAY 9, 2019
The Australian
Caltex’s benchmark earnings fell 43 per cent in the first quarter after its petrol and diesel margins took a hit and refining earnings slid at its Lytton facility.
Net operating profit declined to $94 million in the three months to March 31 from $164m for the same period the year prior, in line with a March update from the company.
The rapid jump in oil prices and competition in fuels retailing across the market hurt retail fuel margins, although Caltex (CTX) said it has regained market share over the last six months and says that share remains stable year on year.
Earnings from its Lytton refinery fell sharply to just $5m in the quarter from $51m a year ago, slashing its fuels and infrastructure earnings to $109m from $156m.
The company’s convenience retail unit also saw its earnings dive to $40m from $90m.
“Our result shows the impact of both lower refiner margins and a challenging retail environment this quarter,” Caltex chief executive Julian Segal said.
Caltex shares fell 1 per cent to $25.42 in early trading.
Mr Segal earlier told shareholders at its annual general meeting today that 2018 had been a challenging year.
“We executed on the strategy we had set and made the right decisions at the right time, but these actions alone were not enough to negate the impact of the disruption caused by our transformation or the tougher trading conditions.”
The earnings cut follows a profit warning from rival oil refiner Viva Energy last month after a jump in the price of oil squeezed its petrol and diesel margins.
Viva’s retail earnings will be hit in a range of $30m to $35m due to challenging trading conditions for the period from January 1 to April 30.
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