Caltex jumps on earnings outlook

Group says lower dollar, oil prices hit earnings, flags marketing business growth.

Caltex Australia (CTX) has forecast an up to 30% fall in annual profit after its refining business continued to suffer from weak regional margins. 

Shares in the company, however, jumped more than 8% after an increase in earnings at its stronger fuel marketing business indicated fuel demand in Australia remained robust, despite a cooling mining sector.

At 1043 AEDT, Caltex shares rose 8.4% to $18.32 against a benchmark S&P/ASX 200 index rise of 0.85%.

On a replacement cost of sales operating profit (RCOP) basis, Caltex said it expected to post a net profit after tax of between $320 million and $340 million in fiscal 2013 – an $118 million to $138 million fall compared to fiscal 2012.

RCOP excludes the effect of changes in world oil prices and reflects the company's underlying performance.

Caltex said it expected its refining business to make an operating loss for the year of $175 million, in large part due to a fall in the value of the Australian dollar and crude price fluctuations. 

The group is among many big oil companies that are scaling back their exposure to refining in Australia as they struggle to compete with giant new terminals in Asia that are flooding the region with cheap fuel.

Caltex said it was on track to convert its Kurnell refinery into a fuel import terminal in the fourth quarter of next year.

Meanwhile, operating profit at Caltex's fuel marketing business rose by four per cent to $765 million.

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