Ampol has posted an 11 per cent slide in first-half benchmark profit while its bottom line plunged into the red to a loss of $626 million as the fuels supplier took large write-downs as a result of the COVID-19 pandemic.
The former Caltex Australia saw net profit excluding the impact of oil prices on the value of stockpiles – the figure most closely watched by the market – fall to $120 million in the June half, down from $135 million a year earlier.
The refinery in Brisbane plunged to a $59 million loss while earnings in the rest of the fuels and infrastructure business were also lower, more than cancelling out a jump in profits from convenience retailing.
Net income including the effect of oil prices slumped from $155 million for the first half last year.
Ampol, which relaunched the first two of is petrol station sites under its rebranded new name last week. declared an interim dividend of 25¢ per share. That was down 22 per cent from the 32¢ declared for the first half of 2019 and was lower than analysts were anticipating.
Shares in Ampol closed down 4.4 per cent at $26.96.
Chief executive Matt Halliday said the business had “performed well in extremely challenging market conditions”, pointing to weak refining margins and lower fuel volumes as the pandemic forced multiple restrictions on air and land travel.
Mr Halliday said Ampol had acted early to mitigate the impacts, including bringing forward and extending a maintenance shutdown at the Lytton refinery, deferring capital spending and reducing corporate overheads.
It advised earlier this month that despite soft refining margins it would reopen the refinery from September.
The bottom line was hit by $355 million of charges, including a $80 million impairment of Lytton, a $233 million write-down of convenience retailing and $42 million of other impairments.
“The impairment to Convenience Retail assets was premised on a sustained decline in demand at historic margins, and was skewed towards both leased and non-core sites,” it said.
Ampol also advised it has been selected by Transport for NSW as the preferred company to redevelop four highway service centres west and south of Sydney. If confirmed, Ampol would spend about $100 million in 2021 and 2022 on the sites in the expectation of returns on capital employed of at least 15 per cent once completed.
Extracted from AFR