By Sarah Thompson, 09 July 2015

The absence of Caltex Australia’s usual profit guidance in the lead-up to its half-year end has got the market scratching its collective head as to what may be around the corner.

While on the surface there’s little cause for concern, other than the apparent delay in the release of any guidance statement, sources have told Street Talk that a downgrade is being worked on.

For the last five years, Caltex has given half-year profit guidance in the last two weeks of June, so this year’s absence, or delay, is notable in itself.

And at a time when Caltex has twice as many shareholders as it did only four months ago, a downgrade would certainly take the market by surprise.

As chief executive Julian Segal reported to shareholders at the annual meeting in May, benchmark profit for the first quarter surged to $162 million, up 96 per cent from a year earlier, aided by a strong performance at the sole remaining refinery at Lytton near Brisbane, and strong refiner margins.

On a historical cost basis, taking into account changes in the value of inventories, unaudited March quarter profit was pegged at $174 million, up from $121 million.

Asian refining margins have since remained robust, and while the Lytton plant has been closed in recent weeks for planned maintenance work, the impact of that shutdown is already factored into analysts’ numbers.

Meanwhile, although transport fuel margins are reported to have been rather weak in recent months, Caltex’s business has tended to be less affected than the broader industry.

Volumes of transport fuels sold have, however, been soft and Caltex reported March quarter volumes down 4.9 per cent year-on-year to 3.9 billion litres.

The upcoming half-year profit will be the first since Chevron’s $4.73 billion exit from Caltex’s share register in March and comes as Segal has been hinting the company has a keen appetite for acquisitions.

“Caltex is well aware of its continuous disclosure obligations and has not previously issued a full-year guidance for 2015. If there is something to announce we will do so via the appropriate channel in accordance with listing rules,” a Caltex spokesman said.

Elsewhere in utilities, the information memorandum is out for Vector’s Auckland gas assets, with bids expected at the end of the month. ASX-listed DUET Group and APA Group are expected to look closely at the sale documents, along with Kiwi utility Powerco and Hong Kong’s Cheung Kong Infrastructure.

CKI has a history of buying assets off Vector. The group paid $NZ785 million for Vector’s Wellington electricity network in 2008.

Extract in full from the Australian Financial Review.