Caltex Forecasts 1st Half Profit Drop; Shares Plunge

Caltex Australia Ltd. (CTX.AU) on Monday forecast an up to 39% drop in first half profit as a high oil price and strong Australian dollar hurt margins and refinery outages disrupted fuel production.

Australia's biggest oil refiner forecast a replacement cost of sales operating profit--a closely watched measure that excludes the value of its stockpiles--for the six months to June 30 of A$100 million-A$150 million, down from A$163 million a year earlier.

It forecast a net historic cost profit, which includes the impact of a higher oil price on its stockpiles, of A$255 million-A$275 million, up from A$141 million.

Caltex said its refiner margin was squeezed by a jump in Brent crude prices and premiums driven by unrest in the Middle East and North Africa and Japan's March 11 earthquake and tsunami.

Although the strong Australian dollar had a positive impact on produce payables, Caltex said it is expected to have a negative pre-tax impact on its refiner margin of about A$35 million compared to the first half of 2010.

"While the marketing outlook remains positive, the refiner margin environment remains uncertain due to the impact of the high Australian dollar," Caltex said.

At 0224 GMT, Caltex shares were down 7.2% at A$10.56.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; Ross.Kelly@dowjones.com

Caltex Australia (ASX:CTX)
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