- To assist in understanding the Group’s operating performance, the directors have provided additional disclosure of the Group’s results for the year on a replacement cost of sales basis(i), which excludes net inventory gains and losses.
- On a replacement cost of sales basis, the Group’s net profit after income tax for the year was $444 million, compared to a profit of $430 million in 2006.
- 2007 net profit before interest, income tax and significant items on a replacement cost of sales basis was $675 million, an increase of $20 million over 2006.
$ million |
Five years |
2007 |
2006 |
2005 |
2004 |
2003 |
 | ||||||
Historical cost net profit before interest, income tax and significant items |
3,523 |
965 |
707 |
811 |
687 |
353 |
(Deduct)/add inventory (gains)/losses(ii) |
(734) |
(290) |
(52) |
(228) |
(151) |
(13) |
 |
||||||
Replacement cost net profit before interest, income tax and significant items |
2,789 |
675 |
655 |
583 |
536 |
340 |
Net borrowing costs |
(209) |
(39) |
(46) |
(23) |
(40) |
(61) |
Historical cost tax expense |
(962) |
(280) |
(195) |
(214) |
(190) |
(83) |
Add/(deduct) tax effect of inventory (losses)/gains |
220 |
88 |
16 |
68 |
44 |
4 |
|
|
||||||
Replacement cost profit after income tax (iii) |
1,838 |
444 |
430 |
414 |
350 |
200 |
 |
||||||
| (i) | Caltex Australia’s results are significantly impacted by external factors such as crude oil price movements that are outside the company’s control. With historical cost basis accounting, rising crude prices will generally result in increased profits for Caltex, while falling crude prices will generally result in decreased profits. The replacement cost of sales basis excludes gains or losses from inventories and is calculated by restating cost of sales using the replacement cost of goods sold rather than historical cost. |
| (ii) | Historical cost results include gross inventory gains or losses from the movement in crude oil prices. In 2007, the historical cost result includes $290 million inventory gain (2006: $52 million inventory gain). Net inventory gain/(loss) is adjusted to reflect impact of revenue lags. |
| (iii) | Replacement cost profit after income tax is calculated before taking
into account any significant items over the five years. The total
effect of these significant items in each year was: 2003: $13 million loss before tax ($11 million loss after tax) 2004: $113 million gain before and after tax 2005: $21 million gain before and after tax 2006: Nil 2007: Nil |