Caltex Australia reported on Tuesday a 13 per cent drop in first half profit due to the sharp decline of the Australian dollar, while fuel sales also suffered because of production outages at a Brisbane refinery and damage to a Sydney pipeline.
Corporate logo of Caltex Australia
The oil refiner registered a net profit of $171 million, which is still within Caltex's guidance range of $160 million to $175 million.
Along with the half-year report, Caltex Chief Executive Julian Segal hinted of an increase in the company's cashflow that could lead to higher dividends when it closes its $680-million Kurnell refinery in Sydney and converts the facility into an import terminal.
"As we reduce our exposure to refining following the closure of our Kurnell refinery, we anticipate there will be lower volatility in our future earnings and cashflow," Mr Segal said, quoted by The Australian.
He added that after the closure of the Kurnell refinery, Caltex would be able to allocate more capital for its marketing and distribution business.
Caltex declared a first-half dividend of 17 cents per share, fully franked. For the whole year, total dividends are expected to reach 43 cents, up from 40 cents in the last financial year. But with the improved cash flow, Credit Suisse analysts forecast that by 2015-16, the dividend would double to 90 cents.
Also responsible for the drop in profit is the loss of petrol sales as supermarket giant Coles increased its price discounting using shopper dockets. Besides Coles, Caltex also supplies rival Woolworths with its petroleum products, giving the oil refiner and marketer prime exposure to the supermarket war in Australia.
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