Oil refiner Caltex Australia expects its first half profit to rise by as much as 50 per cent as a result of higher refiner margins in Australian dollar terms.
But Caltex also said this morning its outlook for the second half of calendar 2009 was weaker, with refiner margins expected to come under pressure.
Caltex shares rose 55 cents, or 4.3 per cent, to $13.26 in afternoon trade.
The company said that given the weaker outlook for the second half, global financial uncertainty and financial obligations arising from the proposed acquisition of Mobil's retail business, the board would take a "conservative position'' in relation to the 2009 interim dividend.
Caltex said its net profit for the six months ended June 30 would be between $270 million and $295 million, compared with the $196 million in the prior corresponding period.
The after-tax number is based on the replacement cost of sales operating profit (RCOP), that excludes the impact of the fall or rise in oil prices, which Caltex says gives a clearer picture of the company's performance.
On an historical cost profit basis, which includes inventory gains, net profit for the first half is expected to be between $335 million and $365 million, compared with $354 million the year before.
Caltex, which is 50 per cent-owned by US oil giant Chevron Corp, said its average margin for the five months to May this year, when converted from US dollars into Australian currency, was 8.98 cents per litre, compared with 6.08 cents during the prior corresponding period.
A significant decline in Singapore-based Tapis crude oil prices and the lower average Australian dollar translated to the higher margin.
But margins were expected to come under pressure in the second half as the slowing in the global economy results in surplus capacity at refineries.
A higher Australian dollar and higher prices for crude oil would also moderate Caltex's margin.
Caltex said first half earnings had benefited from a strong performance by its refining business as utilisation rates improved, key refinery maintenance was completed on time and within budget, and no major unplanned maintenance was required in the period.
Total sales volume was maintained at the level of the previous year. A fall in petrol sales was offset by increases in the sales volumes of diesel and jet fuel.
Caltex said net debt as of June 30 was expected to be below $600 million, compared with $832 million as of December 31.
Macquarie Private Wealth adviser Helen Spencer said investors were feeling positive towards Caltex.
"They have forecast a rise in their 2009 first half profit,'' she said. "We have got a bit of upbeat talk from them, and the market is receiving that very well.
"It is a bit encouraging that it is a better outlook than previously thought.''
AAP
