27 February 2012 Hal f year review 13 March 2012 EFFEct of carbon price announcement 27 March May 2012

Transcription

1 2011 Half year review

2 key points First half replacement cost of sales operating profit (RCOP 1 ) Net Profit After Tax (NPAT) of $113 million First half historical cost profit (HCOP) NPAT of $270 million Strong Marketing performance continues Lower than planned refinery availability US dollar Caltex Refiner Margin 2 reduced by events in Libya and Japan Record Australian dollar reduces Caltex Refiner Margin Balance sheet remains strong, BBB+/Stable credit rating affirmed Interim dividend of 17 cents per share (fully franked) Results summary Half Year Ended 30 June Profit after interest and tax ($m) Historical cost basis (including significant items) Historical cost basis (excluding significant items) Replacement cost basis (including significant items) Replacement cost basis (excluding significant items) Profit before interest and tax ($m) Historical cost basis (including significant items) Historical cost basis (excluding significant items) Inventory gains/(losses) before tax ($m) 224 (11) Replacement cost basis (including significant items) Replacement cost basis (excluding significant items) Basic earnings per share (cents) Replacement cost basis (excluding significant items) Historical cost basis (including significant items) Return on equity attributable to members of the parent entity after tax, annualised (%) Replacement cost basis (excluding significant items) 7 11 Historical cost basis (including significant items) 17 9 Net tangible asset backing per share ($) Net debt ($m) Gearing (net debt to net debt plus equity) (%) Caltex Australia Limited ACN

3 Report from our chairman and managing director & CEO In the first half of 2011 Caltex achieved an increase in overall fuels volumes, with a good mix of growth in commercial diesel, jet, retail and premium fuels. There was also an increase in the average transport fuels sales margin. Supply and Distribution projects and Refining improvement initiatives made significant progress. Despite the strong Marketing performance, the half year result was partly offset by a range of challenges including the ongoing high value of the Australian dollar and an increase in the light-heavy crude oil price spread, which reduced our Refiner Margin. Lower than planned production volumes meant that prompt purchase of high-cost, unplanned imports was required so that we could continue to reliably meet our customers fuel needs. Historical cost profit Caltex s historical cost after tax profit was $270 million for the first half of 2011 (including the effect of inventory gains). Measured this way, our profit result includes movements in the price of crude oil during the period. This is compared with $141 million for the first half of 2010 (which included $14 million significant items). The increase in historical cost profit was mainly due to product and crude oil inventory gains of approximately $157 million after tax that occurred because of the significant rise in the crude price during the first six months of the year. This compares with product and crude oil inventory losses of approximately $8 million after tax for the first half of 2010, when the crude price was more stable. The cash benefit of the inventory gain in 2011 was partly offset by higher working capital requirements due to the higher cost of crude oil. Replacement cost operating profit Caltex adjusts for the volatile movement in crude oil prices by re-stating our historic cost profit result using the most recent cost of crude oil. This is known as replacement cost of sales operating profit (RCOP) and provides a more stable set of results over time and is more closely aligned to the operating cash flow that the business generates. On this basis, Caltex s after tax profit for the first half of 2011 was $113 million. This compares with $163 million for the first half of 2010 (excluding significant items). The difference between the first six months of 2010 and 2011 primarily resulted from operational disruptions at the Lytton and Kurnell refineries that reduced our planned production, as well as unusual external factors such as the high Australian dollar, natural disasters in Queensland and New South Wales, the tsunami in Japan and war in Libya.

4 Elizabeth Bryan, Chairman and Julian Segal, Managing Director & CEO Strong Marketing performance continues Marketing continued to deliver strong results in the first half of Total fuels volumes were up 4.3% compared with the first half of This result was underpinned by continued growth in commercial diesel, jet, retail and premium fuels. Finished lubricants growth was excellent with volumes up over 14% when compared with the first half of Lower than planned refinery availability Transport fuels production was up 8.5% (on the first half of 2010), although this was lower than expected due to unplanned refinery outages, the extension of planned maintenance at the Kurnell refinery, and natural disasters that affected production. High-cost, unplanned import cargoes were required to replace lost local production and ensure supply to our customers. This increased the overall cost of supply and the lost opportunity cost from the lower refinery availability was estimated to be approximately $50 million. US dollar Caltex Refiner Margin reduced by events in Libya and Japan The average US dollar Caltex Refiner Margin fell from US$9.67 in the first half of 2010 to US$7.82 for the first half of 2011 as the war in Libya and the tsunami in Japan widened the light-heavy crude oil price spread and increased the Dated Brent 3 benchmark prices. Record Australian dollar reduces Caltex Refiner Margin The Australian dollar was, on average, 16% higher in the first half of 2011 when compared with the first half of 2010, rising to record highs since the float of the dollar in This reduced Caltex Refiner Margin earnings by approximately $36 million, before tax, when compared with the first half of This was

5 Report from our chairman and managing director & CEO continued partly offset by realised exchange gains on crude and product payables of $14 million before tax and after the effect of hedging. Effect of carbon price announcement Under the federal government s proposal for introducing a price on carbon, Caltex will only be responsible for its own emissions and transitional assistance has been announced to help keep Australian refineries on a level playing field with overseas competitors. A preliminary estimate of the cost in the first year of the scheme is $5 million to $10 million. Balance sheet remains strong, BBB+/stable credit rating affirmed Prudent fiscal management has maintained our strong balance sheet. However, net debt at 30 June 2011 has increased to $675 million, from $544 million at 31 December This was due to working capital requirements, which have increased in line with the higher average cost of crude. Outlook for the second half of 2011 The outlook for Marketing remains positive. However, despite improvements in the regional supply demand balance, the refiner margin environment continues to be uncertain due to the continuing strong Australian dollar and the scale of the light-heavy spread. Project Catalyst, which is aimed at delivering cost and capital efficiency gains, will continue to deliver results. As part of the Refining improvement initiative, Caltex has decided to outsource some in-house maintenance activities at the Kurnell and Lytton refineries. A provision of approximately $7 million for associated retrenchment costs will be recognised in the second half of Interim dividend The Board is pleased to announce it has declared an interim dividend of 17 cents per share for the first half of This compares with an interim dividend of 30 cents per share for the first half of Caltex remains committed to a conservative balance sheet and will continue to focus on good cash management. Elizabeth Bryan Julian Segal Chairman Managing Director & CEO This 2011 Half Year Review has been prepared as at 22 August 2011.

6 indicative financial calendar* 27 February 2012 Full year results and final dividend announcement 13 March 2012 Record date for any final dividend entitlement 27 March 2012 Final dividend payable if declared 10 May 2012 Annual General Meeting *These dates are subject to change. Corporate directory Caltex Australia Limited ACN Registered office: Level 24 2 Market Street Sydney NSW 2000 Australia Mail: GPO Box 3916 Sydney NSW 2001 Australia Telephone: Facsimile: Website: w w w.caltex. c o m. au Share registry: Computershare Investor Services Pty Limited GPO Box 2975 Melbourne Vic 3001 Australia Tollfree: (enquiries within Australia) Telephone: (enquiries outside Australia) Facsimile: Website: w w w. computershare. c o m 1. The replacement cost of sales operating profit (RCOP) excludes the impact of the fall or rise in oil prices (a key external factor) and presents a clearer picture of the company s underlying business performance. It is calculated by restating the cost of sales using the replacement cost of goods sold rather than the historical cost, including the effect of contract based revenue lags. 2. The Caltex Refiner Margin (CRM) represents the difference between the cost of importing a standard Caltex basket of products to Eastern Australia and the cost of importing the crude oil required to make that product basket. The CRM calculation represents: average Singapore refiner margin + product quality premium + crude discount/(premium) + product freight crude freight yield loss. 3. The relevant light sweet crude marker for Caltex changed from APPI Tapis to Dated Brent effective 1 January 2011.