LA Private

Ampol powers ahead: Strong first half performance and refinery repairs fuel success

Ampol Limited (ASX:ALD, NZX:ALD) has reported a strong first half performance for the 2023 financial year, with the completion of successful refinery repairs. The unaudited Group RCOP EBIT for the first half is approximately $575 million, and RCOP EBITDA is approximately $800 million.

Key highlights of the first half performance include a 24% increase in Group total fuel sales volume compared to the same period in the previous year. Australian fuel sales volume grew by 13%, international sales volume grew by 8.1%, and there was a full six months contribution from Z Energy, a subsidiary of Ampol.

The Lytton Refiner Margin (LRM), representing the difference between the market value of importing a standard Lytton Refinery basket of products and the cost of importing the crude oil required, was reported as US$10.29 per barrel for the first half of the 2023 financial year.

The convenience retail fuel sales volume for the first half of 2023 was 1,911 million litres, showing a slight increase compared to the same period in the previous year.

Australian wholesale sales volume reached 5,620 million litres, a notable 17% increase from the previous year. In total, Australian fuel sales volume amounted to 7,531 million litres, representing a 13% growth. International sales volume reached 4,548 million litres, reflecting an 8.1% increase. The sales volume of Z Energy for the first half of 2023 was 2,198 million litres.

Despite challenges, Ampol’s non-refining divisions experienced strong earnings growth, contributing to the overall positive performance.

Fuels and Infrastructure (ex-Lytton) showed double-digit growth in RCOP EBIT compared to the first half of the previous year, driven by improved margins, increased volumes, and effective management of supply imbalances resulting from the refinery outage. Convenience Retail earnings grew through strong shop performance and improved fuel margins.

The inclusion of Z Energy’s performance, which remained strong despite extreme weather events in the first quarter, also positively impacted Group earnings.

Regarding the Lytton refinery performance, the unaudited RCOP EBIT for the first half is approximately $100 million, with RCOP EBITDA reaching approximately $131 million. The lower Singapore product cracks in the second quarter, higher operating expenses (primarily electricity costs), the one-off impact of the Fluidised Catalytic Cracking Unit (FCCU) outage, and losses incurred on the storage and export of intermediate products contributed to these results.

However, gains in Trading and Shipping in response to supply challenges partially offset the losses. The Lytton Refiner Margin (LRM) for the second quarter of the 2023 financial year was US$5.66 per barrel, mainly due to weaker Singapore product cracks and the higher proportion of lower-value finished products and intermediates produced during the outage to repair the FCCU slide valve.

Refinery total production for the second quarter remained consistent with the first quarter at 1,484 million litres. However, the LRM for the month of June improved to US$12.69 per barrel as the refinery returned to normal operations by the end of May, and Singapore product cracks recovered.

The audited financial results for the first half of 2023 will be released on 21 August 2023. Ampol Limited’s Board has authorised this release of information.