A squeeze on oil refining margins has hit earnings of Caltex, the country's largest oil importer and refiner, despite a lift in volumes of petrol sold.
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But helping to offset the squeeze, more customers are purchasing higher margin premium fuels, it said, with an ongoing decline in sales of unleaded and E10 products. This left overall sales volumes up slightly at 7.7 billion litres.
For the June half, it has indicated the pretax profit will fall to $310-330 million, down from $375 million a year earlier.
At the group's recent annual meeting, it signalled softer March quarter earnings, which has now been confirmed for the full six months to June.
The pretax profit of the supply and marketing arm is expected to rise more than 10 per cent to between $345 and $360 million, it said.
But tighter refining margins have weighed on the performance of its Lytton refinery in Brisbane where the pretax profit is expected to run at $85-95 million, it said.
The unspecified decline at Lytton was due to "lower first half refiner margins, offset by stronger production volumes", it said.
The average refiner margin was $US9.80 per barrel of oil, down from $US16 a barrel a year ago, it said.
The forecast includes a gain on inventories of about $70 million, which is down from the inventory gain of $95 million a year earlier.
On a replacement cost basis, the group's preferred measure, Caltex said the net profit for the half is expected to come in at between $245-260 million. In the same period a year earlier, the net profit mon this basis was $251 million.
