Ampol seeks ‘consistent’ COVID-19 closure rules as fuel losses spiral
Ampol boss Matt Halliday has called for a nationally consistent approach to managing future COVID-19 outbreaks, warning that short, sharp lockdowns of states and cities are undermining the economic recovery and sapping business confidence.
As Australia’s first Pfizer vaccine injections were rolled out on Monday morning, the head of Australia’s top fuel supplier said businesses were still fearful of sudden closures of state borders in response to any future outbreak of COVID-19 infections.
“There needs to be a consistent set of rules in place, so that when you do see outbreaks there is a predictable and risk-based response to the approach … not prompt border closures,” Mr Halliday said. “Companies can’t plan their activities and their investments when there is considerable uncertainty about what the response to the outbreak is going to be.”
Ampol, formerly Caltex Australia, has been hit hard by coronavirus travel restrictions hammering demand for petrol, diesel and jet fuel, and on Monday posted a $485 million loss for the 12 months to December 31.
The company is considering shutting down the Lytton oil refinery in Brisbane, which spiralled to a $145 million loss, and converting it to a fuel-import terminal. Lytton is one of just two refineries left in Australia after BP and ExxonMobil announced plans to close their loss-making local refining operations.
Mr Halliday said challenges facing the refinery, which employs 500 workers, were “significant” and likely to remain during the course of 2021 due to a slower-than-expected recovery in international air travel wiping out jet fuel demand.
Analysts from RBC Capital Markets said Ampol’s latest forecasts for 2021 fuel volumes released on Monday were lower than expected.
“Around 75 per cent of jet fuel sales in 2019 were underpinned by international flight sales, and this remains severely restricted from global COVID-related lockdowns,” they said.
The Morrison government is offering a $2.3 billion industry rescue package over 10 years, with a subsidy of at least 1¢ per litre for locally made fuels, to help keep refineries operating.
Now that vaccines had arrived, Mr Halliday said, state and federal governments now needed to come together and map out how to manage the “next stage of the virus.”
“We need to adjust our mindset as a country to understand that we do have better experience [in handling the pandemic] now that we are a year into managing COVID,” he said. “Our ability to control it has significantly improved.”
Stripping out significant items, Ampol’s benchmark profit – the figure most closely watched by the market – fell 38 per cent to $212 million. Earnings before interest and tax in the company’s fuels and infrastructure business including the refinery fell 65 per cent to $154 million, but rose 42 per cent in the convenience and retail business to $287 million.
Ampol declared a final dividend of 23¢ per share. It’s shares closed 2.7 per cent weaker at $25.77.
Extracted from The Sydney Morning Herald