Caltex Australia : Refiner Margin Update (April 2020)

14 May 2020

CALTEX REFINER MARGIN UPDATE (April 2020)

Caltex Australia (ASX: CTX) advises its Caltex Refiner Margin (CRM1) in respect of CRM sales from production for April 2020.

	April 2020	March 2020	April 2019
CRM	US$4.83/bbl	US$4.62/bbl	US$10.96/bbl
CRM sales from production	454 ML	515ML	440ML

The April 2020 CRM was US$4.83/bbl, slightly above the March 2020 CRM of US$4.62/bbl but below the prior year comparative (April 2019: US$10.96/bbl). CRM sales from production in April 2020 were 454ML, which was below March 2020 but in line with the prior year comparative. Reduced production was a result of decisions made by management to reduce economic impact due to the poor margin environment.

The April 2020 Caltex Singapore Weighted Average Margin (SWAM) was US$6.77/bbl, which was lower than the March 2020 SWAM of US$8.82/bbl. The lower SWAM was representative of the softer global demand for hydrocarbons, largely due to COVID-19 impacts. The April SWAM was the lowest level observed in over 10 years, indicative of the unprecedented market conditions. As previously advised, landed crude oil premiums (crude oil premiums and crude freight) also remained elevated as a result of purchases made under the high premium conditions of IMO2020 prior to the onset COVID-19, combined with rising freight markets. This was partly offset by rising product freight supporting the product values in the April CRM result.

For the four months from 1 January 2020 to 30 April 2020, the average CRM was US$4.86/bbl (YTD 2019: US$8.32/bbl) with CRM sales from production totalling 2,024 ML (YTD 2019: 1,927 ML).

YTD April	2020	2019
CRM	US$4.86/bbl	US$8.32/bbl
CRM sales from production	2,024ML	1,927 ML

Lytton Refinery has now commenced the extended outage for Turnaround and Inspection (T&I) and all feedstock input to the refinery has ceased. As such, Caltex will suspend providing periodic CRM updates until refinery operations recommence.

Authorised for release by: the Disclosure Officers of Caltex Australia Limited.

Notes

1. CRM represents the difference between the cost of importing a standard Caltex basket of products to eastern Australia and the cost of importing the crude oil required to make that product basket.

The CRM is calculated in the following manner:

Weighted Singapore product prices (for a standard Caltex basket of products)

Less:	Reference crude price (the Caltex reference crude marker is Dated Brent)
Equals:	Singapore Weighted Average Margin (Dated Brent basis)
Plus:	Product quality premium
	Crude discount
	Product freight
Less:	Crude premium
	Crude freight
	Yield Loss
Equals:	Caltex Refiner Margin

The Caltex Refiner Margin is converted to an Australian dollar basis using the prevailing average monthly exchange rate.

CRM is just one contributor to the EBIT earnings (excluding significant items) of the Lytton refinery, which is part of the Fuels and Infrastructure.