A strong performance in fuels marketing has failed to prevent a 17 per cent decline in core full-year profit for Caltex Australia, to $524 million, slightly ahead of its December guidance.

Caltex had forecast its net operating profit before movements in oil prices – the number most closely scrutinised by the market – would be between $500 million and $520 million for the full year, down from $628 million in 2015, as the contribution from the refining business dropped.

Bottom line profit climbed 17 per cent to $610 million on revenues that were 10 per cent lower at $17.9 billion.

Caltex reiterated disappointment with the likely end of its long-term fuels alliance with Woolworths after the supermarket’s $1.8 billion deal in December to sell the business to BP.

The deal still has to be approved by the national competition regulator, amid speculation that BP will have to sell some petrol stations to get it through. Caltex said until it was approved it would continue to supply Woolworths and focused on its other recent acquisitions.

“Whilst disappointed with the likely end of a successful long-term fuel alliance with Woolworths, Caltex will maintain its financial discipline, deliver on supply chain efficiency improvements and pursue profitable growth,” the company said.

“This includes securing new wholesale and retail volumes, such as the recent Milemaker and Gull acquisitions, and investing in our supply chain, including our retail network and core transport fuels infrastructure.”

Caltex declared a final dividend of 52c a share, in line with its policy of paying out 40-60 per cent of core profit.

The supply and marketing business posted earnings before interest and tax of $709 million, with transport sales volumes broadly flat at 16 billion litres. Caltex said underlying EBIT rose 9 per cent on growth in premium fuels and income from outside the fuels area.

The refining business, now concentrated on the Lytton plant in Brisbane, reported earnings of $205 million, down from $406 million in 2015.

Extracted from AFR.

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