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Ampol Limited Analysis

Overview

Ampol’s fuel and infrastructure business is a market leader in Australian transport fuels, being the largest wholesale supplier with 26% market share in Australia in 2021.

Ampol’s integrated business sources, imports, refines and distributes fuels and lubricants that supplies approximately 1,900 company-owned or affiliated sites and business and commercial customers across a range of industries in Australia. Ampol has a network of distribution assets across Australia, which includes a refinery in Lytton, Queensland, 16 terminals, six major pipelines and approximately 55 wet depots.

Ampol has leveraged its Australian business to extend its supply chain and operations into international markets. This includes the establishment of Ampol’s trading and shipping business in 2013 that operates out of Singapore and Houston, which is responsible for the strategic sourcing of crude oil, refined fuels and feedstocks, and the management of associated shipping.

Ampol’s convenience retail network consists of approximately 700 sites across Australia, of which approximately 690 are company operated. This provides an expansive platform for the sale of retail fuels and convenience products, including through its ‘flagship’ format of Ampol Woolworths Metro stores, which is delivered through a partnership with Woolworths, and ‘Foodary’, Ampol’s Tier 2 Format which is the default store format.

In addition to Ampol’s partnership with Woolworths and strong relationships with quick service restaurant (QSR) partners, Ampol is dedicated to improving customer service through technology and new partnerships, including with organisations such as Uber, Toyota, NRMA and Hyundai. To date, Ampol has ten EV charging stations across five sites, delivered in partnership with Evie Networks. Over the long term Ampol will look to develop its own charging network, with the expected delivery of over 200 additional fast charging bays across Ampol’s national retail network, in partnership with the Australian Renewable Energy Agency (announced in July 2021), being the first scaled rollout of Ampol fast charging bays.

In May 2022, Ampol acquired all of the shares in Z Energy Limited pursuant to a court-approved scheme of arrangement. Z Energy supplies fuel to retail customers and large commercial customers like airlines, trucking companies, mines, shipping companies and vehicle fleet operators. It also holds substantial investments in other businesses and assets.

Z Energy’s operations span all aspects of the downstream fuel industry in New Zealand – procurement of refined product, primary distribution, terminal storage and secondary distribution, commercial and retail sales. Prior to the conversion of the Marsden Point Oil Refinery to an import only facility in early 2022, Z Energy was also involved in the procurement of crude oil and refining. Z Energy is not involved in upstream oil exploration or extraction.

The combined Ampol and Z Energy group is expected to have a combined network of approximately 2,350 sites and supply approximately 25 BL pa of fuel to customers in the Asia Pacific region, leveraging Ampol’s unique international supply chain.

As announced by Ampol on 14 March 2022, Ampol has agreed to sell its Gull business in New Zealand to Allegro Funds Pty Limited subject to the receipt of Overseas Investment Office approval.

Performance

The following information was extracted from Ampol Limited's full year results, released on 19 February 2024:

ANOTHER YEAR OF STRONG FINANCIAL PERFORMANCE

Key points

  • Full year 2023 Group Replacement Cost Operating Profit (RCOP) Earnings Before Interest and Tax (EBIT) of $1,296.6 million
  • Result underpinned by earnings growth in non-refining divisions and full 12 months’ contribution from Z Energy
  • Z Energy delivered expected acquisition benefits and synergies
  • Record total sales volumes of 28.4 billion litres, up 17 per cent compared to 2022
  • Statutory Net Profit After Tax (NPAT) (Attributable to Parent) of $549.1 million
  • Strong balance sheet with leverage at the end of 2023 of 1.6 times
  • Final ordinary dividend declared of 120 cents per share, fully franked. Full year ordinary dividends of 215 cents per share, fully franked, at the top of the payout range for the full year
  • Additional special dividend declared of 60 cents per share fully franked, taking total dividends to 275 cents per share, fully franked, a total of $655 million declared for 2023, or 89 per cent of RCOP NPAT1

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