Caltex Australia Expects Profits Slide for 2011
Caltex Australia is expecting profits to slide in 2011 because of production disruptions and wild changes in the global supply and price of crude oil.
In spite significant production cost cutting measures, the company was still unable to mitigate the profit drop, which according to issued statement Friday, on a Replacement Cost Operating Profit (RCOP) basis, Caltex forecasts an after tax profit for the 2011 full year of $245 million to $265 million, excluding significant items.
Caltex said the replacement cost of sales or RCOP presents a clearer picture of the company's underlying business performance as it excludes the impact of the fall or rise in oil prices and
In 2010, the company's RCOP was at $318 million for the 2010 full year (excluding significant items). The difference between 2010 and 2011 is largely attributable to challenging externalities and operational disruptions during 2011. These externalities include a higher Australian dollar and a wider light-heavy crude oil price spread.
Marketing performance
Marketing continues to focus on its core strategy of driving sales of premium fuels, diesel, jet and lubricants , with record volumes achieved to date for each of these products. Based on this volume growth and continued strength in convenience store earnings, Marketing expects to achieve a record result for 2011.
Review of Refinery operations
The deteriorating external conditions mentioned above continue to present challenges and pressure Refining earnings. Despite these headwinds, the Refining team has focused on driving efficiencies and maintaining safe and reliable operations. The detailed work to review the role of Caltex's refineries in supplying customers is ongoing. A broad range of options is being explored and the complex nature of this work means that a decision is still a number of months away.
Debt position
Net debt at 31 December 2011 is forecast to be approximately $600 million, compared with $544 million at 31 December 2010.
Caltex is committed to maintaining a BBB+/Stable credit rating.