CALTEX AUSTRALIA LIMITED (CTX)



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General Information
Company Name: Caltex Australia Limited
Stock Code: CTX
Website: www.caltex.com.au
GICS Sub-Industry: Oil & Gas Refining & Marketing
Market Cap ($M): 6,010
Equiv. Shares (M): 270

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 22.710 $ 22.420 $ 22.780 $ 22.220 $ 22.260 500,738 $ 0.450  2.022 %

Current Broker Consensus Recommendation more
Recommendation: Sell
Recommendation Date: 3rd Apr 2014
12 Month Target Price (average): $19.45
Brokers Surveyed: 6

Company Overview

Business Description:
Caltex Australia Limited (CTX) is a transport fuel supplier, convenience retailer and an integrated oil refining and marketing company. It operates two major refineries at Kurnell in Sydney and Lytton in Brisbane. The company also operates with a myriad of subsidiaries; Caltex Australia Custodians, Caltex Australia Petroleum, Caltex Fuel Services, Petroleum Services, Hunter Pipe Line Company, B&S Distributors and Jet Fuels Petroleum Distributors.

Strategy Analysis:
CTX strategy is based on lifting refinery utilisation rates so it can take full advantage of excess demand for refined product in Australia. Refiner margins can be volatile but high refinery utilisation rates and strong marketing activities are important in driving operating cash flow and earnings. This allows for the reduction of debt levels and improving the return on equity and the return to shareholders. The alliance with Woolworths underpins volume growth. The CEO aims to lift CTX into the top quartile in terms of total shareholder return and to eliminate earnings volatility - a very big task. Caltex Australia reported NPAT of $57.6m for the year ended 31 December 2012. This includes significant items of approximately $309.0m (after tax), which primarily relates to provisions in respect of the closure of the Kurnell refinery. This compares favourably to the 2011 after tax loss of $713.22m, which included significant items of $1.12bn (after tax) relating to the refinery impairment. The 2012 result includes product and crude oil inventory losses of $92.0m after tax, compared with an inventory gain of $138.0m after tax in 2011. Revenues from ordinary activities were $23.26bn, up 5% from last year. Basic and Diluted EPS was 21.0 cents compared to (264.3) cents last year. Net operating cash flow was $399.74m compared to $446.4m last year. The final dividend declared was 23.0 cents, taking the full year dividend to 40.0 cents compared with 45.0 cents last year.


Financial Summary
Year to Dec NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F 403.8 147.9 3.7 15.1 88.3 4.0 100.0
2014  F 389.4 142.6 20.5 15.6 104.0 4.7 100.0
2013  A 323.1 118.3 -29.4 16.6 34.0 1.7 100.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Caltex (CTX) $5,856 M -0.2951 0.5958 0.0562 22.7144 14.2342 13.4762 0.0157 0.0337 0.0366

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
CTX 1.59 19.7 2.32 0.66 0.24
Market 1.07 15.9 1.26 1.99 1.71
Sector 1.48 14.3 0.77 0.95 6.56

Directors
Name Position Start Date
Mr Peter Wissel Alternate Director for Mr Fish and Mr Jones-Cervantes 23 August 2005
Mr Julian Segal Chief Executive Officer,Managing Director 01 July 2009
Ms Elizabeth Bloomfield Bryan Non-Executive Chairman 18 July 2002
Mr Greig Gailey Non-Executive Director 11 December 2007
Mr Trevor Bourne Non-Executive Director 02 March 2006
Mr Bruce Morgan Non-Executive Director 29 June 2013
Ms Barbara Burger Non-Executive Director,Alternate Director - Mr Richard Brown and Mr Ryan Krogmeier 28 June 2012
Mr Ryan Krogmeier Non-Executive Director,Alternate Director - Mr Richard Brown and Ms Barbara Burger 30 March 2012
Mr Richard Brown Non-Executive Director,Alternate Director - Ms Barbara Burger and Mr Ryan Krogmeier 28 June 2012

Management
Name Position
Simon Hepworth Chief Financial Officer
Peter Lim Company Secretary
Katie King Company Secretary
Simon Willshire General Manager, Human Resources
Bruce Rosengarten General Manager, Marketing
Gary Smith General Manager, Refining and Supply
Mike McMenamin General Manager, Strategy, Planning and Development
John Remedios Joint Company Secretary

Substantial Shareholders
Holding Name
135,000,000 (50.00%) Chevron Global Energy Inc

Calendar of Events
Date Event
30 March 2015 Report (Annual)
23 February 2015 Report (Interim)
23 February 2015 Report (Prelim)
25 August 2014 Report (Interim)
21 August 2014 Report (Interim)
08 May 2014 AGM
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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