Dollar hits Caltex first half earnings

Caltex Australia Ltd has flagged a decline in first-half profit because of the Australian dollar's sharp drop and a recent pipeline outage at a refinery.

In a statement to the Australian Securities Exchange after the market close last night, Caltex forecast a net profit of between $160 million and $175 million in the six months to June 30, down from $197 million in the same period last year.

The profit forecast is on a replacement cost basis, which excludes the effect of changes in the world oil price and reflects the company's underlying performance.

Pre-tax earnings have dropped by about $5 million because of the dollar's fall from nearly 104 US cents to 93 US cents in the space of six weeks, and a lag in passing that change on to customers, Caltex said.

"The marketing and distribution result for the first half of 2013 has been adversely impacted by the sudden and significant fall in the Australian dollar during May and June as well as the impact of the loss of premium petrol sales into the Sydney market following the recent pipeline outage from the Kurnell refinery," Caltex said.

"The sudden and significant fall in the Australian dollar will result in a net loss on US dollar payables of approximately $45m in the first half," Caltex said.

"The actual loss was mitigated by the company's policy of hedging 50 per cent of the outstanding payables."

A lower Australian dollar is expected to be more favourable to Caltex's refinery business in the long-term, however, improving the difference in price between crude oil and the products produced by the refining process.

Another $6 million earnings hit was taken because of an outage of a pipeline from its Kurnell refinery in Sydney during June, the company said.

Sales of regular petrol have fallen in the first half of calendar 2013, Caltex added.

Premium petrol sales are expected to be up by four per cent compared to the same period last year, despite the impact of a pipeline outage at the Kurnell refinery in Sydney.

High value transport fuel sales are expected to be broadly in line with the same period in 2012.