Ampol: Retailer and refiner’s profits squeezed despite record fuel demand

Petrol retailer and refiner Ampol’s profits have been smashed but the company reckons fuel demand will stay strong until the 2030’s amid a slow energy transition.

The Sydney-based company’s profit sunk almost 80 per cent to $123 million for 2024 as a tough refining market hit the company hard. Revenue fell 8 per cent due to falling oil and fuel prices.

“Australian transport fuel demand is at an all time high despite the country’s efforts to transition away from fossil fuels,” chief executive Matt Halliday told investors on Monday.

“We expect fuel demand to be robust well into the 2030s.”

He said transition options were looking to be further in the future as the “complexity and cost of this challenge becomes even clearer”.

Electric vehicle uptake in Australia was flat, Mr Halliday said.

“EVs remain a very small proportion of the total fleet,” he said.

“The roll-out of charging infrastructure has also been slow, highlighting the constraints in the system, including around grid connectivity.”

Ampol ‘s share of the Aussie petrol market is about 25 per cent, but retail sales fell 3.5 per cent through the year.

The $6.7 billion company’s Lytton Refinery in Queensland also hit trouble with a “material deterioration of global refining conditions” and a series of unplanned production problems.

UBS analyst Tom Allen zeroed in on a “weaker” performance at Z Energy, Ampol’s New Zealand arm.

“Ampol historically has good form on the consistency of its capital framework but a weaker (dividend) payout will disappoint some,” he said.

Mr Allen said markets were also too optimistic about earnings at Lytton.

“That aside, a relatively clean result with $50m cost out reaffirmed for 2025 with efficiencies to come from curtailed new energy spend, tech and supply chain plus more cost-out hinted, albeit detail remains light,” he said.

Shares fell 2.6 per cent to $27.31.