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Transport fuels big first-half profit for Caltex

Road transporters help Caltex increase profit margins, booking $298 million in first-half profit

August 31, 2009

Road transporters have helped Caltex increase its profit margins in Australia, the country’s only domestically-owned fuel supplier reports.

Caltex has posted a net profit of $298 million for the six months to June, a 52 percent bump from its 2008 result.

Transport fuel volumes have been maintained despite the economic downturn, the company reports, with jet and diesel fuel “offsetting the fall in petrol volumes”.

Caltex sold about 2.9 billion litres of diesel during the six-month period, slightly up on the 2.8 billion litres pumped out in the first half of 2008.

Despite major planned maintenance at its Kurnell refinery, total transport fuel production was up 8.6 percent to 5.1 billion litres.

The company also raked in more money per litre on diesel, reporting a transport fuels profit margin jump from 10.1 cents per litre in the first half of 2008 to 10.7 cents per litre this year. Still, that margin is the same as it reported for the 2006 period and down from a peak of 11 cents per litre in 2007.

Caltex expects a “challenging” finish to the year, with higher crude oil prices and a higher Australian dollar.

“The favourable key externalities that were seen in the first half are unlikely to be repeated in the second half,” the company reports.

Newly-appointed CEO Julian Segal says Caltex will create a culture that “continually challenges the status quo” while exploring new opportunities in China and India.

“Caltex will continue to focus on the factors and opportunities that are within our control – refinery, cost control, efficiency – and take advantage of appropriate external opportunities that present themselves,” he says.

Caltex announced earlier this year it would spend about $300 million purchasing 302 Mobile service station sites to establish itself in the retail market.

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