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Caltex flags big rise in H1 profit, warns on H2

Reuters - Friday, June 26

* Caltex says H1 profit expected to rise at least 38 pct

* Sees weaker second-half, cautions on interim dividend

* Says H1 operating profit to be between A$270-A$295 mln

PERTH, June 26 - Caltex Australia Ltd <CTX.AX>, the country's top oil refiner, flagged at least a 38 percent gain in first-half operating profit, helping its shares to gain, but also forecast weaker second-half earnings as margins come under pressure.

The company said on Friday its replacement-cost-of-sales operating profit, which strips out the impact of oil price fluctuations, would be between A$270 million and A$295 million in the first half of 2009, compared with A$196 million a year ago.

The rise was driven by higher refiner margins in Australian dollar terms, foreign exchange gains and high utilisation rates at its two refineries, which had no major unplanned maintenance.

However, a strong rally in the Aussie dollar since March and a recovery in crude prices was set to put those margins under pressure in its second half.

"Given the weaker outlook for the second half of 2009 ... and also taking in to account the financial obligations rising from the proposed acquisition of Mobil's retail business, the board intends to take a conservative position on the 2009 interim dividend," Caltex said, without giving further details.

Caltex said last month it would buy ExxonMobil Corp's <XOM.N> petrol service stations in Australia for about A$300 million, funding the acquisition internally. [ID:nSYD56222]

Peter Warnes, a fund manager at Huntley Investments which holds Caltex shares, said the refiner would probably issue an interim dividend of between 30-35 cents.

"Their dividend policy is to roughly pay out 50 percent of its operating profit, which would be at least 50 cents a share. But given their conservative outlook, it's probably going to be less but kept within the range of last year," he said.

Caltex, which operates two refineries representing about 30 percent of Australian capacity, issued a dividend of 36 cents in the first half of last year, but scrapped its second-half dividend after posting a 58 percent slump in full-year operating profit.

Caltex added it remains committed to a conservative balance sheet and its net debt at 30 June is expected to be below A$600 million.

Shares in Caltex, which is half-owned by Chevron Corp <CVX.N>, rose 4 percent to A$13.22 by 0101 GMT, outperforming a 1 percent gain in the broader S&P/ASX 200 energy index <.AXEJ>.

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