Caltex announces profit outlook – continues to drive sales of premium fuels

Caltex Australia has today released its Full Year Profit Outlook for 2016. The company is forecasting that on a Historic cost profit after tax (HCOP) basis, it expects an after tax profit in the range of $560 million to $580 million for the 2016 full year.

Retail product sales mix

Although the company forecasts a reduction in total sales volumes of approximately 16 billion litres, this is less than 1 per cent on the prior year; with higher consumer and jet volumes offsetting lower commercial sales volumes.

The results reflect a strong and resilient retail business, with continued growth in premium fuels. Higher sales of premium grades of petrol and retail diesel continue to offset the long term decline in demand for unleaded petrol, including E10. Caltex continues to drive premium fuels sales (including Vortex diesel).

The increased penetration of premium Vortex products has been underpinned by targeted investment in growth; including new retail service stations and increased marketing spend.

Wage underpayment by franchisees

Caltex notes it is working proactively to eradicate media reported instances of wage underpayment from its franchise network, including working with the Fair Work Ombudsman and terminating franchise agreements where franchisees are found to have engaged in wage underpayment or other illegal or improper conduct.

Financial Projection

Today’s Full Year Profit Outlook for 2016 forecasts that on a HCOP basis, the company expects an after tax profit in the range of $560 million to $580 million for the 2016 full year. This compares with the 2015 full year profit of $522 million, which included a significant item profit of $29 million after tax.

The 2016 outlook includes a forecast product and crude oil inventory gain of approximately $60 million after tax, which reflects the increase in Brent crude oil prices and the higher Australian dollar. This compares with an inventory loss of $135 million after tax in 2015.

On a Replacement Cost Operating Profit (RCOP) basis, Caltex forecasts an after tax profit for the 2016 full year of $500 million to $520 million, excluding significant items. This outlook compares with an RCOP after tax profit of $628 million for the 2015 full year, excluding significant items.

The overall result reflects a strong underlying Supply & Marketing result within highly competitive wholesale, commercial and retail markets, offset by adverse foreign exchange and pricing lags of approximately $35 million.


Caltex reports its results for statutory purposes on a historical cost basis. Information on a replacement cost of sales operating profit (RCOP) basis removes the impact of fluctuations in the US$ price of crude and foreign exchange on cost of sales. Such impacts constitute a major external influence on company profits. RCOP restates profit to remove these impacts.

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