Caltex Australia posted a softer than expected 1 per cent increase in benchmark profit for the first half but the result was overshadowed by a decision to sell up to $500 million of convenience retailing sites into a partnership with a real estate investor.
The fuels supplier, which had a review of its business structure under way, said it had decided against a spin-off of the real estate part of its business, despite some peers deciding to go down that path.
Instead, it revealed it is exploring a “strategic real estate partnership” with an experience third party. The rejig would initially involve the sale and leaseback of between 15 and 25 per cent of Caltex’s freehold site portfolio, currently valued at about $2 billion.
Caltex would look to retain a stake of 25-50 per cent in the partnership, which could be extended to more sites down the track.
In the fuels and infrastructure business, where an asset review was also under way, Caltex said it had decided to retain full ownership “despite strong investor appetite”.
The first half benchmark profit was affected by the cost of transferring franchise sites to company-owned petrol stations, while refining margins tailed away in June. Caltex announced in February it would end its franchise system and take control of all sites.
Net profit excluding the impact of changing oil prices on the value of stockpiles rose to $296 million in the June half, only just within the fuel supplier’s guidance of between $295 million and $315 million, and up from $294 million in the first half last year.
Bottom line net income, which is less closely watched by the market, surged 45 per cent to $383 million, buoyed by an $87 million gain on the value of inventories of oil and refined fuels. The figure fell just short of the guidance given by Caltex in June.
Revenues jumped 33 per cent to $10.19 billion.
Extracted from AFR