Caltex posts record annual profit

LILLY VITOROVICH
FEBRUARY 23, 2016
AAP
Strong demand for premium fuel products at Caltex Australia’s 800-plus service stations and a sharp drop in expenses has helped the fuel retailer produce a record annual profit.
Motorists have been buying more premium fuel products, including Vortex diesel, following big slides in pump prices that have been driven by lower oil prices.
Those higher sales helped offset the long term decline in demand for unleaded petrol, including E10, chief financial officer Simon Hepworth said.
“The increase penetration of premium Vortex products has been driven by our continued investment in growth, particularly in our retail service station network, which includes not only new sites to Caltex and new sites in the industry but the refurbishment of existing service stations and our increased marketing spend,” he said.
Premium fuel products have higher margins than traditional unleaded fuel.
Still, total sales volumes fell five per cent in 2015, hurt by lower diesel demand as a number of LNG projects near completion and the expiration of some major supply contracts.
“We have vigorously defended our contract volumes in 2015, and we are happy to say that we have secured new supply volumes in 2016, which more than offset the reduction in volumes in 2015,” Mr Hepworth said.
Stripping out significant items, underlying profit after tax – Caltex’s preferred measure of profitability – rose 27 per cent to a record $628 million in 2015, in line with the company’s guidance.
Caltex’s profit was driven by its extensive sourcing and supply operations as the group moves away from the concentration of refining. A 19 per cent fall in expenses to $19.04 billion also helped.
Statutory net profit jumped sharply to $521.5 million in 2015 from $19.9 million a year earlier. The 2014 result was hit by oil price changes on the values of its inventories.
Annual revenue dropped 17 per cent to $20.03 billion, primarily because of sharp falls in oil prices and product prices that are denominated in US dollars. The revenue decline was partly offset by the fall in the Australian dollar.
The weighted average Brent crude oil price was $US51 a barrel in 2015, compared to $US101 a barrel in 2014.
Caltex’s strong underlying profit performance resulted in a 40 per cent jump in the group’s final dividend to 70 cents a share.
That takes the total dividend to $1.17 for 2015, up 67 per cent from 70 cents in 2014.
The two dividend payments in 2015, together with the proposed $270 million share buyback, will result in total capital returns of around $586 million over 12 months to April, Mr Hepworth said.
The buyback is expected to be completed during the second quarter of 2016.
CALTEX DELIVERS STRONG PROFIT RISE
*Net profit $521.5m vs $19.9m a year ago
*Revenue fell 17pct to $20.03b