Caltex Australia Profit Hurt by Refining Loss

SYDNEY--Caltex Australia Ltd. (CTX.AU) on Monday booked a fall in annual profit after its refining business was hit by slimmer regional margins and a lower Australian dollar.

The country's biggest refiner and fuel marketer said net profit on a replacement cost basis, which excludes the value of its inventories, slipped 28% to 332 million Australian dollars (US$298 million). The figure is close to the midpoint of company guidance delivered in December of A$320 million-A$340 million.

Australian refiners are suffering from lower margins as much larger facilities in places like India and China flood the region with cheap fuel. Caltex is converting its Kurnell refinery in Sydney into a fuel import terminal by the end of 2014. It's other refinery, Lytton in Brisbane, will stay open.

Operating losses at the company's refining business of A$171 million were driven by lower regional margins and a fall in the value of the Australian dollar, which can increase Caltex's input costs.

Operating earnings in the company's marketing business rose 4% to A$764 million, as demand for fuel from Australian motorists and businesses remained reasonably buoyant as the economy continued to grow.

Write to Ross Kelly at [e-mail]

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