Review of results and operations
General overview
Caltex Australia Limited recorded an after tax profit of $444 million on a replacement cost of sales operating profit (RCOP) basis for the year to 31 December 2007. This compares with an RCOP result of $430 million for the full year 2006.
Caltex operates in a highly competitive market and the $444 million 2007 RCOP profit equates to an average of 2.2 cents per litre after tax for all petroleum products sold1. (Full year 2006: 2.2 cents per litre.)
In the case of petrol alone, Caltex’s profit after tax was around 1.5 cents a litre (cpl) compared to the Australian government’s tax at the bowser of approximately 50 cents a litre2.
Caltex recorded a solid financial performance despite a worsening external environment. Record refinery production helped offset declining refiner margins and there was a stronger contribution from the marketing business with higher transport fuel sales, particularly diesel, along with increased non-fuel income. Marketing contributed approximately half of Caltex’s earnings in 2007.
The company had its best safety performance to date in 2007 and also managed to keep its unit operating expenses in line with inflation despite strong cost pressures for materials and skilled labour.
By growing sales volumes, increasing production and good operating cost control the company has been able to offset the negative impact of external factors of currency movements and declining refiner margins.
There was a 17% drop in the Caltex refiner margin (CRM)3 in Australian cents per litre terms compared to 2006. The higher Australian dollar in 2007 had the net effect of lowering after tax profit by approximately $40 million relative to the previous year.
The CRM averaged A7.0 cents per litre (US$9.26 a barrel) in 2007 compared with A8.44 cents per litre (US$10.13 a barrel) in 2006. This margin excludes operating costs.
On a historical cost profit basis (including inventory gains), Caltex recorded an after tax profit of $646 million for 2007 (2006: $466 million). The profit includes crude oil inventory gains of $202 million after tax, compared with $36 million inventory gains in 2006.
Debt at 31 December 2007 was $582 million (31 December 2006: $539 million). Debt increased towards the end of the year as the company built inventory in preparation for major refinery maintenance in the first quarter of 2008.
General overview
Caltex Australia Limited recorded an after tax profit of $444 million on a replacement cost of sales operating profit (RCOP) basis for the year to 31 December 2007. This compares with an RCOP result of $430 million for the full year 2006.
Caltex operates in a highly competitive market and the $444 million 2007 RCOP profit equates to an average of 2.2 cents per litre after tax for all petroleum products sold1. (Full year 2006: 2.2 cents per litre.)
In the case of petrol alone, Caltex’s profit after tax was around 1.5 cents a litre (cpl) compared to the Australian government’s tax at the bowser of approximately 50 cents a litre2.
Caltex recorded a solid financial performance despite a worsening external environment. Record refinery production helped offset declining refiner margins and there was a stronger contribution from the marketing business with higher transport fuel sales, particularly diesel, along with increased non-fuel income. Marketing contributed approximately half of Caltex’s earnings in 2007.
The company had its best safety performance to date in 2007 and also managed to keep its unit operating expenses in line with inflation despite strong cost pressures for materials and skilled labour.
By growing sales volumes, increasing production and good operating cost control the company has been able to offset the negative impact of external factors of currency movements and declining refiner margins.
There was a 17% drop in the Caltex refiner margin (CRM)3 in Australian cents per litre terms compared to 2006. The higher Australian dollar in 2007 had the net effect of lowering after tax profit by approximately $40 million relative to the previous year.
The CRM averaged A7.0 cents per litre (US$9.26 a barrel) in 2007 compared with A8.44 cents per litre (US$10.13 a barrel) in 2006. This margin excludes operating costs.
On a historical cost profit basis (including inventory gains), Caltex recorded an after tax profit of $646 million for 2007 (2006: $466 million). The profit includes crude oil inventory gains of $202 million after tax, compared with $36 million inventory gains in 2006.
Debt at 31 December 2007 was $582 million (31 December 2006: $539 million). Debt increased towards the end of the year as the company built inventory in preparation for major refinery maintenance in the first quarter of 2008.
| 1 | This calculation is based on RCOP NPAT ($444 million) divided by the total Caltex sales of petrol, diesel and jet fuel including sales to domestic refiners (19.9 billion litres) and lubricants, specialty products and non-fuel income in the full year 2007. |
| 2 | This calculation is based on a bowser price of around $1.35 a litre (excise 38.14 cpl + gST 12.27 cpl). |
| 3 | The Caltex Refiner Margin (CRM) represents the difference between the cost of importing a standard Caltex basket of products to Eastern Australia and the cost of importing the crude oil required to make that product basket. The CRM calculation represents: average Singapore refiner margin + product quality premium + crude discount/(premium) + product freight - crude freight - yield loss. |