Caltex Australia Takes another Hit in A week

The Australia based petroleum product refiner and distributor Caltex Australia (CTX) has taken another hit within a week as it is expecting to see a near flat earning for the current year and is planning to shut down a refinery in Sydney as a part of its cost efficiency drive. Caltex stated that the after-tax profit on a replacement cost of sales operating profit is going to be within the range of $180 million and $205 million in comparison with $186 million of the previous year. The only listed Australian refiner said that its result will incorporate pre-tax items that worth $170 million due to redundancy payments and asset writedowns, which includes $93 million to close its lubricating oil refinery located at Kurnell, Sydney.

According to Caltex, refiner margin of the company remained at $US2.60 per barrel for the second half which happened due to a falling demand for fuel, an expected increase in the worldwide surplus refiner capacity, increase in the price of crude oil and a stronger Australian dollar. Caltex shares dropped significantly and faced a second round of downgrades after ACCC blocked its plan of purchasing 302 filling stations of Mobil. Caltex shares fell 4.7 percent at $8.59 by mid-noon. It is to be mentioned that the RCOP guidance, which is a widely followed measure is well under the recently reduced forecast of $343 million from Credit Suisse and the $357 million forecast by Macquarie.

The refiner and distributor of petroleum products claimed that its performance was satisfactory for this year with marketing volumes in line with 2008 and the company is hopeful for the next three years as it is expecting positive outcomes from the cost efficiency drive. The dateline of closing down the refinery is yet to be fixed which according to Caltex is facing reduced feedstock sources and producing outmoded lubricant products.