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Caltex’s Shares Plunged On ASX After Releasing Its Unaudited Profit Guidance for CY18

  • December 18, 2018 02:55 PM AEDT
  • Team Kalkine
Caltex’s Shares Plunged On ASX After Releasing Its Unaudited Profit Guidance for CY18

Leading transport fuel supplier Caltex Australia Limited (ASX: CTX) has released its unaudited profit guidance for the year ended 31 December 2018. Following this release, the share price of Caltex decreased by 6.506 percent as on 18 December 2018.

According to Caltex’s Managing Director and CEO Mr. Julian Segal, in 2018, the company established solid foundations for sustainable growth in the company's Fuels & Infrastructure and Convenience Retail businesses. He informed that the Fuels & Infrastructure earnings (excluding the Lytton refinery) increased by 21% in 2018 as compared to 2017.

However, Lytton earnings decreased by 51 percent in 2018 due to lower regional refining margins and the impact of an unplanned outage in the 3rd quarter of 2018. The international sales volume of the company increased by 34 percent and Australian domestic sales volumes increased by 2 percent in 2018 as compared to 2017. The company also successfully extended the contract to supply around 3.3BL of fuel per year to Woolworths’ sites for a further 15 years.  During 2018, the company acquired a 20 percent interest in Seaoil in the Philippines and benefitted from a full year’s earnings contributions from Gull New Zealand.

As per the unaudited profit guidance of the company, on a Replacement Cost Operating Profit (RCOP) basis, the NPAT (Net Profit After Tax) for 2018 is expected to be around $533 million to $553 million as compared to $638 million in 2017.

On Historic Cost Operating Profit (HCOP) basis, the company is expecting the NPAT to be within a range of $530 million to $550 million for 2018 which is less than the 2017 HCOP NPAT of $619 million. The Fuels & Infrastructure division of the company is expected to deliver an EBIT result in the range of $560 million to $580 million for 2018 which will include unfavourable foreign exchange impacts of $15 million. The expected EBIT of $560 Mn- $580 Mn is below than the $666 million EBIT of 2017 which included unfavourable foreign exchange impacts of $26 million.

The company is expecting the total Australian fuels sales volumes to be around 16.9 BL in 2018 (including 12.1 BL wholesale sales), approximately 2% higher than the 16.6 BL of fuels sales in 2017 (including 11.5 BL wholesale sales). Further, the company is expecting the Wholesale sales volume growth in 2018 to be higher than market growth, with Fuels & Infrastructure continuing to leverage its integrated supply chain to protect and grow its wholesale volumes. It is expected that the International volumes will be around 3.4 BL in 2018 which is 34% higher than 2017. The Net debt position of the company is forecast to be approximately $1,000 million at 31 December 2018, compared with $1,041 million at 30 June 2018 and $814 million at 31 December 2017.

In 2019, the company will be required to adopt a new accounting treatment (AASB16) for lease liabilities which is anticipated to have a present value of around $1 billion. This adoption of new accounting treatment will result in an unfavourable non-cash impact of $25 million to 2019 NPAT.

CTX’s shares traded at $25.290 with the market capitalization of circa $7.05 billion as on 18 December 2018 (AEST 2:04 PM).


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