Ampol Limited, Australia’s leading fuel distributor, posted a net profit after tax of AUD 180.2 million for the first half of the year, based on the replacement cost method. This result marks a 23% decline from AUD 233.7 million recorded during the same period last year. Despite this drop, the performance exceeded the Visible Alpha consensus forecast of AUD 165.6 million.
The decline in earnings is attributed to multiple factors, notably persistently weak refining margins in Singapore and operational disruptions stemming from weather events and scheduled maintenance. Ampol’s Lytton refinery, the company’s only operational refining site in Australia, was notably affected. Its underlying operating earnings fell sharply to AUD 1.1 million, down from AUD 89.5 million a year earlier.
Refining Margin Rebound in Second Half
Despite these challenges, Ampol reported that the Lytton refinery’s margin rebounded significantly at the start of July, reaching AUD 9.95 per barrel, compared to an average of AUD 7.44 per barrel during the first half. This improvement could signal a more favourable trend for the remainder of the year, though final outcomes will depend on global refined product market conditions.
In its fuels and infrastructure division, operating earnings were nearly halved, down to AUD 118.3 million, increasing pressure on the group’s overall profitability. However, Ampol noted that performance in its non-refining segments — including convenience retail and New Zealand operations — is expected to largely follow the trends observed in the first half.
Adjusted Dividend and Acquisition Outlook
In response to the earnings contraction, Ampol declared an interim dividend of AUD 0.40 per share, lower than the AUD 0.60 paid during the same period last year. This adjustment reflects financial prudence amid ongoing operational volatility.
The company also recently confirmed its acquisition of the Australian unit of UK-based EG Group, which operates a network of service stations. The AUD 1.1 billion transaction marks a strategic move for Ampol as it aims to strengthen its national presence in fuel distribution. Analysts at Jefferies indicated that the deal may shift market focus towards growth potential, without requiring immediate revisions to earnings forecasts.
