Results in: Why the Caltex Australia Limited share price jumped higher today

The Caltex Australia Limited (ASX:CTX) share price has jumped today after the release of its full-year results. Should you buy its shares?

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Caltex Australia Limited (ASX: CTX) share price has climbed 2% to $30.27 this morning after the fuel retailer reported a solid full-year result.

Here's what you need to know:

  • Revenue from ordinary activities fell 10% to $17.9 billion.
  • Full-year replacement cost of sales operating profit (RCOP) after tax of $524 million, down 17% due to lower refiner margins.
  • RCOP earnings per share (excluding significant items) of $1.99.
  • Final dividend of 52 cents per fully franked, bringing the full-year dividend to 102 cents per share.
  • Net debt of $454 million (14% gearing; lease adjusted 28%).

RCOP is the company's preferred measure of profitability. The RCOP result removes the impact of fluctuations in the U.S. dollar-denominated price of crude and foreign exchange on its cost of sales.

Although this result is a drop from last year's result due to significantly lower refiner margins at its Lytton refinery, it did beat management's full-year RCOP guidance of between $500 million and $520 million.

Whilst sales volumes of its transport fuels were flat on last year at 16 billion litres, sales of higher-margin premium fuels rose 3%. This helped to offset the long-term decline in petrol sales, which fell 2% during the year.

Is it a buy?

Although the Lytton refinery weighed heavily on its results this year, management appears confident that it can improve its performance by capturing operational and margin improvements. Furthermore the company has placed a high priority on the optimisation of its entire value chain.

I feel confident that this will lead to a return to growth in the new financial year, which could make it an opportune time to snap up its shares.

Based on its RCOP earnings per share figure Caltex shares are trading at just over 15x earnings. I think that this makes them great value.

Right now I think that Caltex is one of the better buys in the energy sector and would choose it ahead of sector peers AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG).

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »