Caltex Australia has forecast an increase in first-half replacement cost operating profit on the back of a jump in earnings from its Lytton refinery in Brisbane.
The fuel refiner and retailer expects half-year net profit to be squeezed to between $250 and $270 million following a crude oil inventory loss and expenses associated with a franchise employee assistance fund.
However, its more closely watched RCOP, which strips out the impact of crude oil price fluctuations on inventory, is expected to rise to between $290 and $310 million.
The company reported a RCOP of $254 million in the first half of 2016.
Most of the gains will come from its Lytton plant - its only remaining refinery - where earnings are expected to rise to $150 million, compared to $92 million a year earlier.
While its sales volume remained largely flat at three billion litres, the refiner margins averaged $US12.39 a barrel over the first five months of the year, compared to $US10.10 a barrel a year earlier, the company said on Thursday.
Underlying earnings from its supply and marketing business, or retail operations, are expected to rise to between $365 and $380 million, up 4 per cent on the $359 million it recorded a year ago.
Total transport fuels sales of 7.7 billion litres are expected to be marginally higher than for the same period in 2016, Caltex said.
The company said its half-year profit, based on historic cost basis, is likely to dip following a $40 million product and crude oil inventory loss over the six-month period.
It incurred a $64 million inventory gain for the same period last year.
The company also expects a loss of $5 million on account of the $20 million assistance fund it set up earlier this year for franchisee employees who had not been paid their full entitlements.
Caltex's net debt is expected to touch $700 million by June-end, from $454 million at the start of 2017, following its acquisition of Victorian service station network Milemakers earlier in the year.
Its proposed $325 million acquisition of Gull New Zealand still remains subject to regulatory approval.
Caltex shares gained 17 cents, or 0.6 per cent at $31.11.
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