Finance Finance News Caltex set to axe 350 jobs

Caltex set to axe 350 jobs

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Fuel supplier Caltex will cut 350 jobs over the next 12 months as part of a restructure of the business.

The announcement came as the company lifted first half net profit by one per cent to $173 million.

Caltex said the job losses related to a cost and efficiency review it had launched as part of its transition away from fuel refining, including the closure of its Sydney oil refinery.

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Caltex said that following the Sydney Kurnell refinery conversion to an import terminal – separately costing 300-plus jobs – it was undertaking a company-wide cost and efficiency review to give it the financial strength to maintain its market leadership position.

“As a result of the review, headcount will reduce by approximately 350 people across operational and support functions,” Caltex said.

“The reduction is in addition to the previously announced reductions relating to the closure of the Kurnell refinery.

“The reduction will take place over time with the majority expected to occur within the next 12 months.”

Caltex chief executive Julian Segal said it was committed to supporting its people and was discussing redeployment opportunities and redundancy entitlements with them.

The review would result in restructuring costs of $130 million to $155 million before tax (including redundancy costs, other cash and non-cash costs), being recognised in the second half of 2014.

The restructuring was expected to deliver benefits of about $100 million a year before tax by 2016.

Caltex’s $173 million profit figure was on a replacement cost basis, excluding the effect of changes in world oil prices and reflects the company’s underlying performance.

On a historic cost basis including those factors, profit was down 17 per cent to $163 million.

The refining business made an earnings before interest and tax (EBIT) loss of $65 million.

That was impacted by lower refining margins and looming closure of Kurnell, slightly offset by a good performance at its Brisbane refinery.

The marketing an distribution business, including wholesale transport fuels and its petrol stations, increased EBIT to $393 million from $365 million.

“Our balance sheet remains strong and, despite operating within a competitive and ever changing environment, the outlook for our business continues to be positive,” Mr Segal said.

The dividend has been increased from 17 cents a share fully franked to 20 cents.

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