Caltex Australia Limited (ASX: CTX) has smashed its own earnings guidance for the 2014 calendar year, reporting a 48.5% lift in net operating profit and a final dividend of 50 cents per share, which is almost triple the 17 cent dividend declared in the same period last year.
On a historic cost profit basis, Caltex's after tax profit was just $20 million, compared to the $530 million profit posted in 2013. This was heavily impacted by a product and crude inventory loss of $361 million which was caused by the sharp decline in crude oil prices. Revenues also dropped 2% for the group to $24.2 billion, down from $24.7 billion in 2013.
On a replacement cost basis (which excludes significant items such as the value of its crude inventories) however, Caltex reported a net profit of $493 million. This was a significant improvement compared to the $332 million profit recorded in 2013, while it also smashed its own guidance of between $450-470 million, which it provided in December.
The strong full-year result was largely driven by the record performance in its fuel-marketing business. Earnings before interest and tax (EBIT) from the division grew 6% to $812 million, bolstered by higher sales of premium fuel, which came despite the loss of earnings from its Sydney bitumen business, which Caltex sold in December 2013.
Meanwhile, Caltex's refining business also generated an EBIT contribution of $64 million, compared to a $171 million loss in 2013. The sharp decline in Brent crude oil prices helped the company achieve stronger refiner margins in the second half of the year as product prices didn't fall as quickly as the price of oil itself.
It's been an excellent year for shareholders of Caltex Australia, which has nearly doubled in price over the last 12 months. The stock opened strongly following the result, rising 2.3% to hit a high of $37.50.
