A lift in sales of premium fuels (as consumers move away from cheap ethanol blends and basic unleaded petrol types) assisted Caltex Australia (CTX) in offsetting the squeeze on earnings from a falling profit margins from its refinery in Brisbane.
Net profit fell to $318 million in the June half from $375 million a year earlier on revenue of $8.5 billion which fell more than 12% from the $9.7 billion in the first six months of 2015 (Caltex has a calendar financial year).
Despite the weaker bottom line, Caltex directors lifted interim dividend to 50 cents a share from 47 cents a share a year ago.
In an update in late June, Caltex forecast a June half net profit of $310-$330 million, well short of the $375 million earned in the same period last year, due to lower refining margins at its Lytton refinery in Brisbane, not withstanding a rise in volumes of higher priced premium petrol sold.
The June half figure included $64 million of crude and product inventory gains, it said, while the year earlier figure included a $29 million profit from the sale of property.
On a replacement cost basis, which is the company’s preferred accounting treatment, the net profit edged ahead to $254 million from $251 million a year earlier. In June it forecast the net profit on this measure would run at $245-260 million.
The company said first sales rose to 7.7 billion litres with continuing growth in premium fuels offsetting a decline in sales of both unleaded petrol and E10, a product which is 10% ethanol.
"Continued growth in sales of premium grades Vortex 95 and Vortex 98 partially offset the long term decline in demand for unleaded petrol, including E10. Total petrol volumes fell 2.2% to 2.9 billion litres (first half 2015: 3.0 billion litres), broadly in line with industry trends,” the company said yesterday.
"Total diesel volumes of 3.5 billion litres were in line with prior year. Strong growth in premium Vortex diesel product across Caltex’s retail segment continues with sales volumes up 14%. Lower commercial diesel volumes reflect completion of a number of LNG related infrastructure projects, with the transport, industrial and SME sectors remaining subdued.
“Jet volumes increased 7.0% to 1.3 billion litres,” the company said. Caltex shares fell 1.6% to $33.69.
