Caltex Australia has pleased the market by forecasting a return to full-year profit in 2012 but a slowdown in its marketing business has raised concerns.
The fuel marketer and refiner forecast an operating profit including one-off items in calendar 2012 of $145 million to $165 million, on a replacement cost basis, beating consensus estimates.
Replacement cost excludes the effect of changes in the world oil price, which have had a detrimental effect this year due to a weakening.
Traders liked the result although Caltex initially fell, it was 22 cents, or 1.16 per cent, higher at $19.15 at 1455 AEDT.
This year's expected better result has been driven by better refining margins, the difference between the price of crude oil and its refined fuel products.
The company also forecast a record result in its marketing segment, including record volumes and record earnings before interest and tax (EBIT) of $730 million to $740 million.
Caltex sells one third of Australia's transport fuel and is the country's largest convenience retailer.
However following EBIT growth in fuel marketing of 28 per cent in 2010 and 21 per cent in 2011, this year's expected rise of about five per cent growth is more modest.
The marketing business will be the most important segment with refining to be halved when the Kurnell refinery in Sydney closes in late 2014.
There was uncertainty around marketing because it had been affected by tough economic conditions of late, said one analyst who did not want to be named.
"Heading into 2013 it does appear that it will be a tough economic year and that is a concern," the analyst told AAP.
"Going down to five per cent suggests some of the growth decelerating, which is a bit of a concern particularly given this is going to be their business going forward when they close down Kurnell."
The reasons include the widespread deferral of mining projects this year as the resources boom has slowed in areas where Caltex has terminals.
Caltex has forecast a jump in EBIT to $100 million in its refining and supply business.
Improved refinery reliability during the second half resulted in near record production of petrol, diesel and jet fuel.
Refiner margins so far averaged $US11.73 a barrel (including a second half average of about $US13.74 a barrel.
That compares to a first half margin of $US9.87 a barrel and $US7.98 for the second half last year.
The majority of earnings had come from Lytton in Queensland, Caltex said, and shutting Kurnell was still the right decision due to its poor competitive position, the company said.
After tax profit on a historic cost result basis in 2012 - which will be its statutory result and includes oil price changes - is expected to be between $45 million and $65 million, up from a $714 million loss in 2011.
Caltex made a loss of $852 million in 2011, on a replacement cost basis, including write-downs on the refineries.