By Angela Macdonald-Smith
Nov. 3 (Bloomberg) -- Caltex Australia Ltd., the nation's biggest oil refiner, said foreign currency losses arising from an ``unprecedented'' drop in the Australian dollar will reduce 2008 profit by about A$200 million ($134 million).
Net operating profit for the year ending Dec. 31, excluding the effect of changes in oil prices on the value of stockpiles, may be between A$115 million and A$145 million, down from A$444 million last year, Sydney-based Caltex said today in a statement to the Australian stock exchange. Net income may be between A$135 million and A$185 million, down from A$646 million.
The Australian currency has dropped 29 percent in the past six months against the dollar. The decline from an average of 82 cents in September to an average of 68 cents in October accounted for about a half of Caltex's estimated foreign- exchange loss. Production of transport fuels is set to fall this year, driven by low, or negative, gross margins in the third quarter on processing crude into gasoline, the company said.
Debt rose to more than A$900 million at the end of October ``due to poor cash flow from refining as a result of low refining margins in the third quarter,'' Caltex Australia, 50 percent-owned by Chevron Corp., said in the statement.
Caltex Australia gained as much as 21 cents, or 2.2 percent, to A$9.60 in Sydney trading on the exchange and was at A$9.52 at 10:38 a.m. local time.
The ``short-term pain'' in 2008 operating profit will be offset by the positive effect of a weaker Australian dollar on future refining earnings, Caltex said.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
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