The Caltex Australia Limited (ASX: CTX) share price surges on profit upgrade

Shares in Caltex Australia Limited (ASX: CTX) were up 3% to $30.22 on Tuesday after the fuel supplier released its profit guidance for the first half of 2018.

On a historic cost basis, after-tax profit is expected to be between $385 million and $405, approximately 50% above the previous corresponding period. This includes a product and crude oil inventory gain of about $90 million.

On a more conservative replacement cost basis – which values oil at the current price rather than at the price the company purchased its reserves – NPAT would be between $295 million and $315 million, a small increase over the $294 million reported in the first half of 2017.

EBIT from retail operations will be down 17% to a range of between $150 million and $160 million. Retail fuel margins were negatively impacted by rising crude oil prices, as retail prices take some time to adjust to higher input costs.

Retail contributions were also affected by the transition of 230 stores from franchise to company operations.

The highlight of the release is the good performance from the wholesale segment, with EBIT up 9% to a range of between $315 million and $335 million.

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Motley Fool contributor Tommaso Autorino has no position in any of the 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 Scott Phillips.

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