By Dow Jones Business News,
December 18, 2013, 09:05:00 PM EDT
SYDNEY--Caltex Australia Ltd. (CTX.AU) Thursday 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 over 6% after an increase in earnings at its stronger fuel marketing business
indicated fuel demand in Australia remains robust despite a cooling mining sector.
Caltex, which is 50%-owned by Chevron Corp. ( CVX ), said it expects to post a net operating profit before non-recurring
items through December of between 320 million Australian dollars (US$283 million) and A$340 million. That compares to A$
458 million in 2012.
The company's net operating profit is considered by the company and analysts to be the best measure of its performance
because it strips out the value of the company's fuel stockpiles.
Caltex expects its refining business to make an operating loss for the year of A$175 million, in large part due to a
fall in the value of the Australian dollar and crude price fluctuations.
Sydney-based Caltex is among 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 plans to convert its Kurnell refinery into a fuel import terminal next year. Royal Dutch Shell PLC has already
done the same thing to its Clyde refinery in Sydney and has put its Geelong facility near Melbourne up for sale.
Operating profit at its fuel marketing business rose by 4% to A$765 million.
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