Caltex lowers outlook for 2018, shares fall

Petrol retailer Caltex saw a 5.47 per cent drop in share value earlier this week, from 27 cents per share to 25.57 cents per share, after revealing a dour outlook for the remainder of the year.

The business expects a 14 per cent drop in EBIT for its fuel & infrastructure category to $560 million to $580 million, compared to the $666 million seen in 2017.

This drop is due to the impact of lower regional refining margins overtaking the benefit gained from the business’s performance, and was heavily impacted by an “unplanned outage” in October, leading to a 51 per cent decrease in EBIT for the plant compared to 2017, from $328 million to between $155 million and $165 million.

Despite these figures, Caltex chief executive Julian Segal remained relatively upbeat about the remainder of the business.

“2018 was a year in which we established solid foundations for sustainable growth in both our fuels & infrastructure and convenience retail businesses,” Segal said.

According to Segal, Caltex’s convenience team is beginning to deliver from the company’s partnership with supermarket Woolworths, which includes the creation of ‘Metro’ format petrol and convenience sites, as well as the launch of the Woolworths Rewards program across the Caltex network.

Caltex’s convenience arm is expected to deliver an EBIT in 2018 of between $295 million and $305 million, a figure at the top end of the $275 million to $295 million guidance provided in October, though still below the $334 million seen the year prior.

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