Sydney, 27 August (Argus) — Australian refiner and marketer Caltex reported a rise in its benchmark profit for the first half of 2012 compared to the same period last year, boosted by an improved performance from its smaller refining business and increased diesel and jet fuel sales.
Caltex, which is 50pc owned by Chevron, reported a profit of A$197mn ($205mn) on a replacement cost of sales operating profit basis, up by 74pc from A$113mn in the first half of last year.
Its refinery margin averaged $9.87/bl in the first half of this year against $7.82/bl in same period last year, following an improvement in its Singapore weighted average margin that was offset slightly by higher crude freight costs. The company has been buying crude from more distant suppliers such as west Africa as it tries to improve refiner margins.
Caltex still expects refining margins to decline over the medium to long term despite the recent rebound, as more capacity is bought on stream in Asia. This is reflected in its decision last month to close its 135,000 b/d Kurnell refinery in the second half of 2014 and convert it to an import terminal. Competition from large-scale Asia-Pacific refiners has already prompted Shell to pledge to close its 75,000 b/d Clyde refinery in Sydney by the end of next month.
Caltex plans to focus on its marketing operations in Australia and remains confident that demand for diesel from the mining sector will continue to drive growth, despite a more bearish outlook from mining companies. It also expects increased passenger numbers to underpin a steady growth in jet fuel demand, and for the shift towards higher-octane, premium gasoline to continue.
Overall Caltex gasoline sales fell by 1.5pc in the first half from a year earlier to around 111,000 b/d. But it recorded a 14pc rise in premium gasoline sales and increases of 3pc in sales of diesel, 6pc in jet fuel and 6pc in lubricants.
The company is expanding its Adelaide import terminal in South Australia to add 85mn litres (535,000 bl) of gasoline, diesel and biodiesel storage, which should be completed next year.
Caltex will outline more details of its strategy following the closure of Kurnell in September.
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