Caltex shares lower on soft first half
Stock
Caltex (CTX) $21.98 as at 20/06/2019
Event
Shares in listed petrol station name Caltex have tumbled today, falling nearly 20% following the company releasing disappointing forecasts for the first 6 months of the year, just 10 days out from the half year end.
EBIT is expected to fall in all segments of the business compared to the first half of 2018 with NPAT falling by more than 50% on the previous comparable period.
Refining margins and outages will see their Lytton facility less than 10% of the EBIT than pcp to contribute less than $10m to the half. Convenience retail has suffered with the struggling consumer spending environment and is projected to post $75m-$85m EBIT, around half on last year’s effort.
While there are a number of issues with the performance of Caltex here, the focus will now be on the retail focussed strategy which has not helped the result. Competition is rife in the space and there is little to suggest that retail spending will pick up anytime soon. The market will be forced to put through downgrades here, with the consensus full year NPAT at $485m likely unachievable – there would have to be a 25:75 skew to the second half to go near achieving this.
Management pointed to competitive landscape of retail, and higher crude prices compressing margins as the main factors, however I’m sure if pressed a plethora of reasons for the soft result will come forward.
Caltex (CTX) Chart
Market Matters Take/Outlook
