(EnergyAsia, February 28 2012, Tuesday) — Australia’s largest downstream company reported what could be its largest loss of A$714 million after writing down the value of its two ageing refineries that can no longer compete against larger and newer export plants in Asia and the Middle East. (US$1=A$0.94).

Caltex Australia Ltd said the outlook for the battered refining sector remains poor in 2012, with the prospects that its two refineries in Sydney and Brisbane could be shutdown later in the year as “the status quo is not sustainable,” said managing director and CEO Julian Segal.

The company, half owned by Chevron, reported a net loss of A$714 million for the year ended December 31, reversing a A$317 million profit in 2010 while revenue rose 18% to A$22.11 billion. The A$1.5 billion write-down of the refineries, the strong Australian dollar and plant outages contributed to the sharp reversal of fortune.

The company is awaiting the outcome of a study into the refineries’ viability due out after August.

Mr Segal said: “The overarching objective of this review is to optimise value for our shareholders. We continue to thoroughly evaluate all options to improve the business, ranging from investing to improve their performance, or closing if we are able to import product at a competitive price. Continuation of the status quo is not sustainable.

“The detailed review is assessing issues such as the supply alternatives for our marketing and distribution business, the risk associated with each strategic option and the impact of possible decisions on a broad range of stakeholders.”
Despite the poor performance, the Caltex board has declared a dividend of A$0.28 per share for the second half of the year for a total dividend of 45 cents per share for 2011. The company paid a total dividend of A$0.60 cents for 2010.