Ampol has announced its financial results for the six months ending 30 June 2023, delivering a Group RCOP EBIT of $576.3 million.
According to Ampol Managing Director and CEO Matt Halliday, the business has delivered another “strong result” through its strategy to build a more resilient business via growth in non-fuel and international earnings.
“I’m pleased with the progress we have made integrating Z Energy, with the management team having already delivered the expected benefits and synergies,” he says.
“The value of our integrated supply chain was on full display this period. The team adapted to the changing market conditions and a refinery outage to deliver a pleasing performance, while the ongoing improvement in convenience retail was another standout.
“Our commitment to delivering for our customers remains at the centre of everything we do. This includes the Z Energy team’s response to support their customers in the aftermath of the extreme weather events including Auckland flooding and Cyclone Gabrielle. I am also proud of the refinery, sourcing and commercial teams for their collective response to the unplanned outage, maintaining uninterrupted supply to customers and the safe and on time execution of the repair.”
Fuels and Infrastructure
Fuels and infrastructure (F&I) RCOP EBIT for the first half of the 2023 financial year was $303.9 million.
This was 47% lower (on a continuing basis) than the same time last year as lower Lytton refinery earnings, compared to a record performance last year, were partially offset by the stronger performance from F&I (excluding Lytton).
Lytton RCOP EBIT was $100.3 million, which Ampol says reflects the lower second quarter Lytton Refiner Margin of US$5.66 per barrel due to weak Singapore product cracks in April and May 2023 and the one-off impact of the Fluidised Catalytic Cracking Unit outage.
F&I (excluding Lytton and Future Energy) earnings grew by 54% on a continuing basis, including an 84% increase in earnings from F&I Australia (excluding Lytton and Future Energy).
Total Australian sales volumes rose 13% compared with the same time last year, through growth in sales to commercial customers, “particularly” in aviation, and “modest growth” in retail volumes.
Future Energy operating expense was $19.5 million, in line with the run rate for the second half of 2022. Ampol says it’s progressing the rollout of the AmpCharge on-the-go electric vehicle charging network in Australia. As at the end of June 2023, 34 charging bays at 14 sites have been delivered in Australia as part of the ARENA and NSW Drive Electric programs.
Convenience Retail
Convenience retail has delivered “further growth” in RCOP EBIT for the first half 2023, with earnings up 31% as fuel sales improved in addition to continued strong shop performance.
Fuel volumes were up 1.1%, 2.7% on a like for like basis. Overall retail fuel margins were higher than in the first half of 2022, particularly in diesel, as wholesale product input costs stabilised.
Excluding tobacco, network shop sales grew 5.6% on a like for like basis as key categories of coffee, snacks, beverages and confectionery achieved strong growth.
The rationalisation of the company operated network was essentially complete by the end of 2022. Total Ampol branded sites as at 30 June 2023 was 1,816 including 643 company operated sites.
The pilot of 50 MetroGo stores was also completed late last year and has been the subject of a joint review in the half. The outcome of this review is that Woolworths and Ampol have agreed to not progress with a broader rollout and existing stores will be rebranded to Foodary over the coming months. The two companies remain committed to their partnership on Everyday Rewards loyalty and redemption.
Ampol says the outcome of the review provides it with “greater flexibility” to leverage the entire network to execute the next phase of its retail strategy.
“Our immediate focus is on investment in new major highway sites including Pheasants Nest, M4s and M1s,” says Ampol. “The two new marquee sites at Pheasants Nest are now open and construction is well progressed on the refresh of the M1 flagship sites which will include Ampol-operated Hungry Jack’s QSRs.
“Over time, we also intend to take a more tiered approach to our Foodary offer to better meet the needs of our local customers as well as unlock the potential of QSRs across more of our premium network.”
New Zealand
The fully debt funded acquisition of Z Energy was completed on 10 May 2022, with the NZ segment’s RCOP EBIT for this half at $122.8 million.
“The Z Energy management team have delivered the anticipated benefits of the acquisition and the objective to simplify the business to drive improved profitability,” says Ampol.
“The underlying business performed strongly in the half, despite the extreme weather events of the first quarter.
“The exit from the National Inventory Agreement has allowed Z Energy to continue to benefit from its superior infrastructure position gaining market share during the period.”
Ampol took over responsibility for full supply to Z Energy on 1 April 2023 with the earnings from supply presented in the NZ segment (consistent with F&I Australia).
Fuel sales volumes improved by 23% on a proforma basis compared with the January to June period in 2022, as the Covid-19 recovery improved demand particularly for jet.
Z Energy also has continued to execute on its energy transition strategy having installed 37 EV charge bays at 14 sites as at the end of June 2023.
