Australia: Caltex Considers Selling Certain Fuel service Station Assets

Australia: Caltex Considers Selling Certain Fuel service Station Assets

Approx. A$2 billion ($1.5 billion) is the value of these assets

Fuel refiner Caltex is mulling selling its select convenience retail assets, since higher costs kept its first-half profit at the low end of its guidance. The assets are valued at about A$2 billion ($1.5 billion).

With Caltex retaining between 25 percent and 50 percent, it is considering a possible real-estate partnership which could include the sale of 12 percent to 25 percent of its existing freehold site portfolio.

Names like Star Mart and Woolworths include the company’s branded convenience stores. As part of a 15-year fuel supply deal, Woolworths is all set to start a wholesale food supply to over 700 existing Caltex convenience sites.

The purchase, refining and supply of fuel products as well as the operation of convenience stores throughout Australia is what Caltex primarily deals in.

For the six months to June 30, net profit on a ‘replacement cost’ basis came in at A$296 million ($217 million) which is an increase from A$294 million in the previous corresponding period, as margins were hurt by higher crude prices and corporate costs.

Between A$295 million and A$315 million was the half-year underlying profit that was forecast by the company in June.

Impacted by ongoing store transitions, the company’s retail earnings also declined 14 percent. So far this year, Brent crude prices have rose about 14 percent. The Lytton refinery in Brisbane, Caltex’s lone refinery also suffered lower refining margins, down 18.6 percent.

For the first half of 2017, an interim dividend of A$0.57 per share would be paid, down from A$0.60 per share. PWKD29082018

Last modified onThursday, 13 September 2018 10:06
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