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