Caltex says profit to rise by 50%

Oil refiner Caltex Australia Ltd expects its first half profit to rise by as much as
50 per cent as a result of wider refiner margins in Australian dollar terms.
Caltex also said on Friday its outlook for the second half of calendar 2009 was
weaker, with refiner margins expected to come under pressure.
The company said on Friday that given the weaker outlook for the second half, global
financial uncertainty and financial obligations arising from the proposed
acquisition of Mobil's retail business, the board would take a "conservative
position" in relation to the 2009 interim dividend.
Caltex said its net profit for the six months ended June 30 would be between $270
million and $295 million, compared with the $196 million in the prior corresponding
period.
The after-tax number is based on the replacement cost of sales operating profit
(RCOP), that excludes the impact of the fall or rise in oil prices, which Caltex
says gives a clearer picture of the company's performance.
On an historical cost profit basis, which includes inventory gains, net profit for
the first half is expected to be between $335 million and $365 million, compared
with $354 million the year before.
Caltex, which is 50 per cent-owned by US oil giant Chevron Corp, said its average
margin for the five months to May this year, when converted from US dollars into
Australian currency, was 8.98 cents per litre, compared with 6.08 cents during the
prior corresponding period.
A significant decline in Singapore-based Tapis crude oil prices and the lower
average Australian dollar translated to the higher margin.
Margins were expected to come under pressure in the second half as the slowing
global economy resulted in surplus capacity at refineries.
A stronger Australian dollar and higher prices for crude oil would also moderate
Caltex's margin.
Caltex said first half earnings had benefited from a strong performance by its
refining business as utilisation rates improved, key refinery maintenance was
completed on time and within budget, and no major unplanned maintenance was required
in the period.
Total sales volume was maintained at the level of the previous year. A fall in
petrol sales was offset by increases in the sales volumes of diesel and jet fuel.
Caltex said net debt as of June 30 was expected to be below $600 million, compared
with $832 million as of December 31.
Caltex shares were 48 cents, or 3.78 per cent, higher at $13.19 on Friday.
Macquarie Private Wealth adviser Helen Spencer said investors were feeling positive
towards Caltex.
"They have forecast a rise in their 2009 first half profit," she said.
"We have got a bit of upbeat talk from them, and the market is receiving that very
well.
"It is a bit encouraging that it is a better outlook than previously thought."