Jobs to be axed in Caltex restructure
Summary: Refiner and fuel seller Caltex Australia won’t rule out selling major company assets as it goes ahead with a company restructure it is calling project “Quantum Leap” and says in the longer-term it could demerge the company’s retail business.....
The first stage of the restructure is a separation of the retail business from refining and wholesale businesses, in a move the company says will save $60 million and cost 120 jobs.
The next stage is ongoing.
“We are not taking anything off the table,” managing director Julian Segal told analysts.
Asked whether any assets would be ruled out for sale, he said there was “nothing sacrosanct”.
He later told reporters that the retail business remained interdependent with the rest of the business, but longer-term there may be a case to demerge them.
The restructure was announced with a first half net profit of $265 million, down 16 per cent on a year earlier because of non-cash crude and product inventory losses.
Replacement cost of sales operating profit (RCOP), which strips out the impact of oil price movements on inventories, was up 21 per cent to $307m, at the top end of recent guidance of $290m to $310m.
The company (CTX) said the restructure would separate out its convenience store and petrol station business from its wholesale, refining and importing businesses.
“The company has made the decision to change its operating model by establishing two interdependent, but different businesses which require separate cultures, processes and systems, both with significant growth options,” Caltex said.
“The company has merged supply, business-to-business, refining and infrastructure into one business unit (fuels & infrastructure) to better optimise our value chain. Retail will focus on the company’s petrol and convenience (P & C) business. “
About $20m of restructuring costs will be recognised in the second half, with the job losses to take place over the next six months from “operational and support roles”, Sydney-based Caltex said.
Caltex shares hit a 10-month high after the announcement. At 10.57am (AEST), Caltex was up 98c, or 2.9 per cent, at $34.43.
A fully-franked interim dividend of 60c per share was declared, up from 50c a year earlier.