Transport-fuels company Caltex Australia has forecast a fall in its first-half earnings after being squeezed by the cost of setting up an assistance fund for franchise workers and absorbing a product and crude-oil inventory loss.

Profit for the six months through June, which the fuel supplier and gasoline retailer measures on a historic cost basis, is expected to slip to between $250 million and $270m, Caltex said.

That compares with a year-earlier profit of A$318 million.

Replacement cost-of-sales operating profit — which strips out the impact of fluctuations in oil and product prices — is expected to rise to between $290 million and $310 million, before one-time items, against $254 million last year, it said.

Earnings before interest and tax at the company’s supply and marketing operations are expected to rise by about 4 per cent, to $360m-$375m, the company said. And its Lytton refinery is forecast to contribute EBIT of about $150 million, reflecting a higher first-half refiner margins.

Caltex (CTX) manufactures and supplies a range of fuels, oils and greases, with more than 1800 petrol stations across Australia.

It said it maintains a strong balance sheet, with net debt forecast to be about $700 million at the end of the half-year period, including the $95 million acquisition of 46 service stations in Victoria.

Extracted from The Australian.