By Ross Kelly
SYDNEY--Shares in Caltex Australia Ltd. (CTX.AU) plunged more
than 10% Friday after a rapidly weakening Australian dollar, a
damaged fuel transport pipeline and a small fire at a refinery
forced it to issue a profit warning.
Caltex, which is 50%-owned by Chevron Corp. (CVX), said it
expects net operating profit--a measure which excludes the value of
its stockpiles--of between 160 million Australian dollars (US$148
million) and A$175 million for the six months through June. That's
substantially lower than the previous year's figure of A$197
million.
Caltex announced the downgrade on Thursday night in Sydney,
about two hours after the market had closed for trading. A
spokesman for the company was unable to provide an immediate
explanation for why its disclosure was released so late in the
day.
The release, however, didn't go unnoticed by investors. By 0018
GMT in Sydney, Caltex shares were down 11% at A$18.24 after
tumbling as low as A$17.10 in early trade.
A weaker Australian dollar has a positive impact on the
company's refiner margins over the long term. But a deep, rapid
fall in its value can make it more expensive for the company to buy
the crude oil that it refines into fuel, given that crude oil is
traded in U.S. dollars.
Caltex had already hinted last week that its earnings could come
under pressure, when it said production had been temporarily
hampered in May by a small fire at its Lytton refinery in Brisbane.
The company said Thursday that its marketing business was also hurt
by damage to a major supply pipeline connected to its Kurnell
refinery in Sydney.
Write to Ross Kelly at ross.kelly@wsj.com
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