Shares in Caltex Australia have leapt in early trade after the oil refiner said it expects a return to profitability thanks to stronger sales of its petrol products.
Caltex shares were 79 cents, or 4.2 per cent, higher at $19.72 at 1055 AEDT.
The company said on Friday it expects its operating profit in calendar 2012 to be in the range of $145 million to $165 million, on a replacement cost basis.
Replacement cost basis excludes the effect of changes in the world oil price, and reflects the company's underlying performance.
After tax profit on a historic cost result basis in 2012 - which will be its statutory result - is expected to be between $45 million and $65 million, up from a $714 million loss in 2011.
The forecast includes the costs of its future closure of its refinery at Kurnell in Sydney.
Caltex made a loss of $852 million in 2011, on a replacement cost basis.
The company said the improvement was due to growth in its marketing operations, and higher production from its facilities at Lytton in Brisbane and Kurnell in Sydney.
Improved refinery reliability during the second half had resulted in near record production of petrol, diesel and jet fuel, allowing both the Lytton and Kurnell refineries to take advantage of a period of strong refiner margins, the company said.
Refining and supply was expected to deliver an earnings before interest and tax result of about $100 million, the majority of which had been contributed by Lytton in Brisbane.
The company's refiner margins on a November year to date basis averaged $US11.73 ($A11.19) a barrel (including a second half average of about $US13.74 ($A13.11) a barrel.
That compares to a first half margin of $US9.87 ($A9.42) a barrel and $US7.98 ($A7.61) for the second half last year.