Caltex Performance: Investors show confidence

Caltex Performance: Investors show confidence

Caltex Performance

Investors Show Confidence

Caltex Australia Limited is an Australian-based transportation fuel supplier and convenience retailer company, which is also the only fuel and convenience brand that is listed on the ASX. The company is engaged in the procurement, refining, distribution and marketing of petroleum products business, and operates convenience stores in Australia.

Based on the company FY2019 quarterly results, the fuel and infrastructure (excluding Lytton), had an EBIT of $104 million, which is a slight decrease from $106 million in the first quarter of 2018.

For the quarter ended March 31, 2019, Lytton’s EBIT was $5 million, which are ten times less than the $51 million in the previous period ($5.1 billion). The RCOP NPAT reached $94 million, a 42.7% decrease from the $164 million in the first quarter of 2018, and the HCOP NPAT fell from $172 million to $57 million during this period.

According to the management team, the results are in line with the updates provided in March. The main reason for the lower earnings is the decline in Lytton’s revenue, the revision of the Woolworths fuel contract and the rise in crude oil prices, which have led to a decline in retail fuel revenue.

The Lytton refinery was shut down during this period, but Caltex has indicated that it is currently operating at full capacity, and they have confirmed that Lytton’s 2019 production will be about 5.8 billion litres.

After this first quarter report been announced, the company share price dropped more than 1% during the early trade of May 9; however, it experienced an increase from $25.73 on May 9 to $26.94 on May 17. It appears that Caltex investors are still confident with the company development.

Oil price decrease on May

After the oil and gas price reached a five-month high due to the Libyan conflict and OPEC-led supply reduction, the price has eventually cooled down in May which decreased from $63.91 per barrel to $62.82 per barrel.

If the import prices of coal and natural gas decrease, which would drive down the company import cost of energy, will help reduce the fuel and transportation costs of enterprises and increase corporate profits. For the national oil strategic reserve, the fall in oil prices provides a favourable opportunity to increase the strategic reserve of crude oil and can improve the safety level of Australian’s oil reserve. Therefore, this decrease would have positive effects and increase investors expectation to the energy market.

EV charging station trail

In the past decade, remarkable measures have been taken by the refining industry to reduce the sulfur content of transportation fuels. Clean fuels are playing an important role in the global low-sulfur world shift.

According to the chief executive, Julian Segal, Caltex know clearly about the customer needs will change and will want to provide any services that they demanded in a convenient location. Caltex is always dedicated to the investigation of other low-carbon fuels, including natural gas, hydrogen and bio fuels. After a difficult March quarter, Caltex is negotiating with potential partners for an experiment of the electric vehicle charging station with an aim of not lag behind in the cleaner fuel transition and become the forerunner. This company strategy would indeed increase the company reputation, regarding the corporate social responsibility of environmental protection and caring environment.

Click here for a one month free trial to our Lotus Blue Portal.

KOSEC does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information provided. KOSEC is intended to provide general information only. Please be aware that investing involves the risk of capital loss. This message is confidential and may be privileged. It is intended only for the use of the addressee named above. If you are not the intended recipient, any unauthorised dissemination, distribution or copying is illegal. We do not guarantee the security or completeness of information hereby transmitted and are not liable in either respect or in respect of any delay. Nothing in this message is intended as an offer or solicitation for the purchase or sale of any financial instrument. Any market prices or data, unless specifically verified and identified as such, are not warranted as to completeness or accuracy. Kodari Securities Pty Ltd (KOSEC) is a Corporate Authorised Representative (No. 399 556) of Longhou Capital Markets (AFSL No. 292464) which is regulated by the Australian Securities and Investment Commission (ASIC). KOSEC wishes to disclose that KOSEC and its staff may hold stock they recommend in their own portfolios and that any decision to purchase recommended stock should be done so after the purchaser has made their own inquires as to the suitability to their own requirements. Click here to view our FSG.
Rate this post

div#stuning-header .dfd-stuning-header-bg-container {background-image: url(;background-size: cover;background-position: center bottom;background-attachment: initial;background-repeat: no-repeat;}#stuning-header {min-height: 335px;}