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Caltex cuts jobs despite H1 profit lift

Prashant Mehra  |  29 Aug 2017Text size  Decrease  Increase  |  

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SYDNEY - [AAP] Caltex Australia (ASX: CTX) will cut about 120 jobs as it follows a first-half underlying profit lift by restructuring its operations into two units.

The company will merge its wholesale, refining, and import functions into one unit, while its petrol and convenience business will be housed in a separate retail unit.

The decision, which stems from an ongoing strategic review, will result in cost savings of about $60 million, Caltex said.

The company reported a 17 per cent decline in half-year net profit to $265 million, squeezed by a crude oil inventory loss and expenses associated with a franchise employee assistance fund.

But its more closely watched replacement cost operating profit (RCOP), which strips out the impact of crude oil price fluctuations, rose 21 per cent to $307 million--mainly on the back of a jump in earnings from its Lytton refinery in Brisbane.

Revenue for the six months to June 30 increased 20 per cent to $10.16 billion.

Earnings at the Lytton plant--its only remaining refinery--jumped to $149 million from $92 million a year earlier.

While its sales volume remained largely flat at three billion litres, the refiner margins averaged $US12.59 a barrel over the half year, compared to $US10.10 a barrel a year earlier, the company said.

Underlying earnings from its supply and marketing business, or retail operations, improved 6 per cent to $381 million.

Caltex's supply contract with Woolworths will come to an end this year after the supermarket chain agreed to sell its network of fuel stations to BP.

It has, however, sought to tide over the earnings gap through acquisitions of Victorian service station network Milemakers and Gull New Zealand's network.

The company declared a fully franked interim dividend of 60 cents, up from 50 cents a year ago.

By 1055 AEST, Caltex shares were up 2.9 per cent at $34.44 in a weak Australian market.

CALTEX HALF-YEAR PROFIT IMPROVES

* Net profit down 17pct to $265m

* Underlying profit up 21pct to $307m

* Revenue up 20pct to $10.16bn

* Interim dividend up 10 cents to 60 cents, fully franked

 

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