Caltex Refiner Margin Improves In March 2019; Company Proceeds To Suspend Its FCUU Unit Temporarily

CTX

Caltex Australia Limited (ASX: CTX) announced an update in its Refiner Margin on 12th April 2019. The company provided the Caltex Refiner Margin (CRM) concerning its sales from the production for March 2019.

As per the company, CRM for March 2019 stood at US$8.67 per barrel, which marked an increase as compared to the CRM of US$7.34 per barrel in February 2019. The Year-to-date (1Q 2019) CRM margin stood at US$ 7.53 per barrel, which marked a decline as compared to the YTD Refiner Margin of US$9.69 per barrel in the first quarter of the year 2018.

Caltex previously reported the CRM at US$7.34 per barrel , which was higher than the January 2019 CMR of US$6.61 per barrel.

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Caltex Refiner Margin Sales from Production marked a decline for March 2019 to 473ML, as compared to the sale of 549ML in February 2019. It is worth noticing that the company reported the high margin despite the decline in sales from production.

The CRM production also declined on an annual basis and was at 1,487ML on YTD basis for the first quarter of the year 2019 as compared to 1,578 ML on YTD basis in the first quarter of the year 2018.

Caltex confirmed previously in February 2019 that the company will shut the FCUU unit at its Lytton refinery to rectify the performance issues caused by the external electricity interruption in January 2019, and in March 2019 the company commenced the announced shutdown of the FCUU unit.

As per the company, the shutdown of FCUU unit impacted the production for 25 days in March and April respectively, which in turn, influenced the Refinery Yield and total production volumes negatively.

The shutdown of the FCUU unit reduced the CRM, which was estimated by the company to be around US$2 per barrel, impacted the CRM for March 2019 and the company reported it at US$8.67 per barrel.

Caltex also estimated and reported that the refining margin of US$10.67 per barrel could have been achieved for March 2019 in the absence of the FCUU unit shutdown. However, the FCUU unit is now back online but Caltex mentioned that production and yield would mark a negative impact of the shutdown during the first half of the month, and the company will confirm and report the same in May 2019.

As per the company, the March 2019 CRM is better even on an annual basis provided the adjustment of the shutdown in the FCUU unit. March 2018 CRM was at US$10.41 as compared to the CRM of March 2019 at US$10.67 (after adjusting with the shutdown).

 In a nutshell, the average CRM on TYD basis at US$7.53 per barrel in the first quarter of 2019, down as compared to the average CRM of US$9.69 per barrel on YTD basis in the first quarter of the year 2018. The CRM sales from production totalled at 1,487ML for the first quarter of the year 2019, which was also down as compared to the CRM sales of 1,578ML in the first quarter of the year 2018.

The company reaffirms its aim to produce 5.8BL in the year 2019.

The stock of the company is trading at A$27.630 (as on 12th April 2019, 3:43 AM), up by 1.62% as compared to its previous close.


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