Caltex releases first quarter trading update

Caltex Australia has announced its 2019 first quarter result, in conjunction with its annual general meeting.

Caltex says the results are “in line” with the March update, although “down” on those of the previous corresponding period. The company says three things have affected its 1Q 2019 earnings:

• Lower earnings from Lytton
• The revised Woolworths fuel contract (now Euro Garages)
• Higher crude-oil prices resulting in lower retail fuel earnings.

Caltex CEO and Managing Director Julian Segal said: “Our result shows the impact of both lower refiner margins and a challenging retail environment this quarter. It was pleasing to see conditions improve in April.

“Our businesses’ strengths, including a strong balance sheet and our extensive network, as well as our steady focus on the execution of our strategy, provide the foundation for delivery of our strategy in 2019.”

Other key results

• The impact of the planned shutdown of the FCCU reduced the CRM by about $0.86/bbl in April.
• Caltex successfully shut down the Lytton refinery FCCU and the unit has returned to full operations. Lytton is now operating at full capacity.
• The key drivers of the variance in Convenience Retail’s unaudited EBIT were twofold. First, a $38 million lower retail fuel margin. Second, an $8 million unfavourable variance in profit on sale of assets. Caltex says rising crude prices and greater competition across the market had an impact on retail fuel margins.
• Retail shop earnings were broadly in line with the prior year, on a seasonally adjusted basis. Caltex says retail fuel market conditions in April have been “encouraging” but that “the market remains competitive”.
• Caltex has now opened 59 Foodary sites. It says it’s working towards launching the initial Caltex Woolworths Metro pilot sites in 2H 2019.
• The transition of franchise sites to company operation remains on schedule. More than 70 per cent of the retail network is now company operated. Agreements are in place for Caltex to operate 99 per cent of sites by 2020.