Caltex Australia writes down value of its refining assets by A$1.5 billion

A A$1.5 billion (US$1.6 billion) write-down by Caltex Australia of its refining assets has increased the risk that its two plants will close and added to the manufacturing industry’s woes because of the strong dollar, rising costs and intense overseas competition, The Australian Financial Review reported. However, Caltex Chief Executive Julian Segal was reported as saying that the charge did not mean the two refineries in Brisbane and Sydney would be closed, but said relying solely on imports to supply customers was one option. Caltex, which supplies more than a third of Australia’s automotive fuels, has been reviewing its loss-making refinery business since August but is still six months away from deciding on its fate. Some 800 Caltex employees and about 650 contractors work at the plants. The impairment reduced the carrying value of the refineries on Caltex’s books by more than 80% to A$340 million (US$362.8 million). It will be reflected in Caltex’s 2011 full-year earnings and send the company’s bottom line into the red by about A$630 million (US$672.4 million). (February 17, 2012)