Refining Loss Weighs on Caltex Result

By Dow Jones Business News, 
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By Ross Kelly

SYDNEY--Caltex Australia Ltd. (CTX.AU) reported a small rise in first-half profit as a strong performance from its fuel-marketing division was dragged down by another refining loss.

Australia's biggest listed oil refiner, 50%-owned by Chevron Corp. ( CVX ), said net profit on a replacement-cost basis, which smoothes out swings in the value of its inventories, rose 1% to 173 million Australian dollars (US$161 million). The result was at the top end of the company's guidance for A$155 million-to-A$175 million given in June.

Operating earnings in the marketing unit climbed 8% and were helped by higher sales volumes of diesel fuel to the mining and marine sectors, in addition to more jet-fuel sales. The refining business posted a A$65 million operating loss, as the company nears the closure of its Kurnell facility in Sydney.

Australian refiners are struggling to compete with larger, more efficient facilities in Asia, prompting Caltex to convert Kurnell into a fuel-import terminal. The Kurnell closure procedure is expected to start in October, Caltex said. The company also owns the Lytton refinery in Brisbane, which it has pledged to keep operational.

Net profit on a historic-cost basis, which includes the value of its stockpiles, fell 17% to A$163 million. Caltex declared an interim dividend of 20 Australian cents a share, up from 17 cents in the prior corresponding period.

Write to Ross Kelly at ross.kelly@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


  (END) Dow Jones Newswires
  08-24-141951ET
  Copyright (c) 2014 Dow Jones & Company, Inc.


This article appears in: Energy

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