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Caltex reports strong operating performance

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Caltex Australia has announced a higher profit after tax (excluding significant items) on a replacement cost of sales operating profit (RCOP) basis of $414 million for the year to 31 December 2005, compared with $350 million for the full year 2004.

This equates to 2.2 cents of profit per litre of petroleum products sold.

Caltex managing director Dave Reeves said the higher profit in 2005 was the result of a strong operating performance by the company's refining and marketing business combined with global market drivers.

"The continued strong demand for fuels in the Asia Pacific region resulted in higher refiner margins with the Caltex Refiner Margin averaging $US8.40 a barrel in 2005 compared with $US6.60 a barrel in 2004," Mr Reeves said.

"We were able to capture the benefit of these refiner margins because of improved throughput rates and near-record production at Caltex refineries. Despite the tight regional supply environment and record imports we maintained a secure and reliable supply of fuels to our customers.

"Caltex's marketing business made a strong contribution to earnings with new records in transport fuels sales, higher margins and volumes across all marketing channels and increased shop sales in our convenience store network.

"Petrol prices rose during the year mainly as a result of a large increase in crude oil prices. Part of the increase was due to higher margins earned by Caltex refineries which reflected tighter global supply and demand for petroleum products.

"The average price of all petroleum products sold by Caltex (including GST) increased 14.6 cents per litre. Of this increase, 13.5 cents per litre was crude oil prices and other costs, 0.9 cents per litre was higher tax (including GST) and 0.2 cents per litre was increased Caltex profit (2005: 2.2 cpl, 2004: 2.0 cpl, RCOP basis).

"Caltex has no crude oil or gas exploration or production interests."

Caltex Chairman Dick Warburton said the Board had declared a final dividend of $84 million or 31 cents per share fully franked, adding to the interim dividend of 15 cents per share to give a total dividend of 46 cents per share fully franked (2004 total dividends: 39 cents).

"This is in line with the company's stated dividend policy of declaring ordinary dividends of 20% to 30% of the RCOP result (after tax excluding significant items) in 2005 while the company met the high capital commitments of the Clean Fuels Project," Mr Warburton said.

"From 2006, the company intends to increase the dividend pay-out ratio to a range of 40% to 60% of the RCOP result after tax excluding significant items.

"However, the declaration and the amount of any dividends are at the sole discretion of the Board and are dependent on the company's earnings, cash flow requirements, financial conditions at that time and available franking credits.

"We are pleased that the confidence of Caltex shareholders has been rewarded by higher dividends and a 78% increase in share price during 2005, opening at $10.86 and closing at $19.38. This put Caltex in the top tier of performers in the Australian share market for the third year in a row. The result provided a total shareholder return of 82%.

"There is great momentum in the business and we feel very confident that in the years ahead our strategies will achieve a further competitive edge in an external environment that, while always volatile, appears favourable."

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