Caltex profit drops as refining struggles

Angela Macdonald-Smith
February 24, 2014
Caltex Australia has reported a 27.5 per cent fall in benchmark full-year profit to $332 million, in line with its December forecast of $320 million-$340 million.
Bottom line net income, which includes the impact of changing oil prices on the value of crude oil stockpiles, surged more than nine-fold to $530 million from $57 million the previous year, when Caltex took $309 million of charges connected with the conversion of its Kurnell refinery in Sydney to an import terminal.
Caltex’s underlying earnings were lifted by growth in fuels marketing thanks to rising demand for premium fuels. But the refining business dragged down earnings, posting losses of $171 million and supporting the company’s decision to rationalise its refining business.
“Whilst marketing has delivered another record result, refining & supply losses have been driven by the negative impact of key externalities, including the significant deterioration in the Caltex refiner margin during the second half and a continuing fall in the Australian dollar,” chief executive Julian Segal said.
“This has led to the lower full year result.”
Caltex declared a final dividend of 17¢ per share, taking the full year payout to 34¢ per share. The full-year dividend compares with a total payout of 40¢ per share for 2012 and reflects the company’s decision to reduce the payout ratio while it is investing in the conversion of the Kurnell refinery.
The refinery is on track to be converted into an import terminal by the fourth quarter of this year, Caltex said.
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