Fuel giant Ampol posts record full-year profit, lifts dividends
Australian fuel supplier Ampol has reported to its highest-ever full-year profit after sanctions on Russian oil products and a recovery in global demand boosted prices and sales revenue.
Ampol, the nation’s largest provider of petrol, diesel and aviation fuel, said on Monday its net profit had soared 42 per cent in 2022 to $795 million, enabling it to significantly increase shareholder returns.
Shareholders will receive a final dividend of $1.05 per share declared, as well as a special dividend of 50¢ a share, the company said.
“These outcomes were supported by strong operational performances and the dedication of the entire Ampol team who have continued to deliver for our customers while responding to the challenges caused by the rebalancing of global energy markets, extreme weather events and COVID outbreaks,” managing director Matt Halliday said.
Profit margins from processing crude oil into transport fuels at Ampol’s Lytton refinery in Brisbane were well above historical averages for the year at $US17.86 a barrel, up from $US7.50 a year before.
As Western nations continue escalating economic sanctions on Russian energy products to starve Moscow of revenue it needs to fund the war in Ukraine, the price of oil and transport fuels have been soaring across the globe.
Halliday said it had been a strong start to 2023 for the oil refinery, with margins climbing past $US18 a barrel, and fuel volumes and sales increasing.
“Geopolitical factors including Russian sanctions and China product export decisions are likely to continue to influence crude and refined product markets during 2023 and in the medium term, the fundamentals of supply and demand continue to support a tight market for refined product,” Halliday said.
UBS analyst Joseph Wong on Monday said Ampol’s result was in line with expectations, while solid growth and the special dividend should be received well by the market.
“Refining margins are expected to remain strong as continued uncertainty regarding sanctions on Russian refined product should support middle distillate prices,” Wong said. “The return of net migration to Australia should see fuel volumes continue to improve.”
The bumper profit result marks a dramatic turnaround for the fortunes of fuel suppliers in Australia and around the world, which were hammered during 2020 and 2021 as COVID-19 restrictions kept people indoors, cars parked in driveways and planes grounded.
During the depths of the crisis, spiralling losses prompted Ampol to launch a review into the future of its Lytton oil refinery in Brisbane, which employs 550 people, and consider shutting it down for good.
Two other oil refineries — ExxonMobil’s Altona plant in Victoria and BP’s in Perth — closed their doors amid the unprecedented collapse in demand for petrol, diesel and jet fuel. But after reaching a rescue deal with the federal government, Ampol and rival refiner Viva Energy have since agreed to keep Australia’s two remaining refineries open until at least mid-2027.
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Source: Thanks smh.com