Caltex Australia Profits Affected by Foreign Exchange Rates

 Australia's only listed oil refiner and marketer says it is cautiously optimistic that earnings will lift in 2009.  Revenue increased 24% to $23.647 billion on to higher crude oil prices in the first half of the year and increased sales.  Its performance was affected by the falls in the Australian dollar and the crude oil price in the second half, and lower refinery production.

While Caltex said in a statement that the economic slowdown may affect both marketing growth and regional US dollar refiner margins in 2009, Mr King said he was "cautiously optimistic'' that earnings will lift in 2009.  He said it was "highly unlikely'' the dramatic fall in the Australian dollar in 2008 would occur again this year, although its weakness would bolster Caltex's refiner margin in Australian dollar terms. "I think the Australian dollar will be much more stable in 2009,'' Mr King said.

Mr King said the performance of the marketing business would slow this year after a "phenomenal'' performance in 2008 but would be an increasingly important division in coming years. Caltex plans to expand the marketing business to keep its title of leading fuel and convenience operator in Australia, through its Caltex Woolworths branded service stations. Non-fuel income was up 3.6% in 2008.

"The sales at convenience stores are an increasingly large part of our revenue,'' Mr King said. "The gross revenue from non fuel income in 2008 was up to $159 million. "It was a very significant part and will continue to grow.'' About one third of Australia's transport fuels continued to be imported, he said. "At Caltex, for example, in 2008, we sold 14.4 billion litres of transport fuel and we produced 9.8 billion litres, so marketing way outpaced our refining.''

Mr King said last year's production was disappointing, falling 1.1 billion litres from 10.9 billion litres in 2007, due to planned and unplanned refinery shutdowns. He said Caltex aimed to produce more than ten billion litres in 2009.

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