The Caltex Australia Limited (ASX: CTX) share price has climbed 2% to $30.27 this morning after the fuel retailer reported a solid full-year result.
Here's what you need to know:
- Revenue from ordinary activities fell 10% to $17.9 billion.
- Full-year replacement cost of sales operating profit (RCOP) after tax of $524 million, down 17% due to lower refiner margins.
- RCOP earnings per share (excluding significant items) of $1.99.
- Final dividend of 52 cents per fully franked, bringing the full-year dividend to 102 cents per share.
- Net debt of $454 million (14% gearing; lease adjusted 28%).
RCOP is the company's preferred measure of profitability. The RCOP result removes the impact of fluctuations in the U.S. dollar-denominated price of crude and foreign exchange on its cost of sales.
Although this result is a drop from last year's result due to significantly lower refiner margins at its Lytton refinery, it did beat management's full-year RCOP guidance of between $500 million and $520 million.
Whilst sales volumes of its transport fuels were flat on last year at 16 billion litres, sales of higher-margin premium fuels rose 3%. This helped to offset the long-term decline in petrol sales, which fell 2% during the year.
Is it a buy?
Although the Lytton refinery weighed heavily on its results this year, management appears confident that it can improve its performance by capturing operational and margin improvements. Furthermore the company has placed a high priority on the optimisation of its entire value chain.
I feel confident that this will lead to a return to growth in the new financial year, which could make it an opportune time to snap up its shares.
Based on its RCOP earnings per share figure Caltex shares are trading at just over 15x earnings. I think that this makes them great value.
Right now I think that Caltex is one of the better buys in the energy sector and would choose it ahead of sector peers AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG).
