Ampol chief executive Matt Halliday has forecast beneficial tailwinds from the conflicts in the Middle East and Russia will continue for the petrol and diesel supplier well beyond the bumper first half, for which it quadrupled its dividend payout.
Halliday said disruptions to global fuel markets, which helped Ampol’s profit surge almost fivefold in the June half, combined with other factors, were very positive for the company’s sole refinery as well as its international trading and shipping capability.
“We are confident about our future earnings potential with a number of tailwinds likely to persist, albeit not at the same levels as the first half,” Halliday said on a conference call for the record first-half earnings, which beat market expectations.
“We are not suggesting that the exceptional market conditions experienced in the first half represent a new normal, but those market conditions do now appear tighter for longer.”
Net profit on a replacement-cost basis, a figure watched by the market that excludes the impact of oil prices on inventories, increased to $857.2 million in the six months ended June 30, up from $180.2 million a year earlier.
Net income swung sharply to $1.36 billion from a loss of $25.3 million in the first half of 2025.
Ampol, which flagged the surge in profits last month, declared an interim dividend of $1.85 per share, up from 40¢ at the same time last year and again beating market forecasts.
UBS energy analyst Tom Allen described the result as “strong”, citing higher -than-expected profits in the fuels and infrastructure business, leaving aside the refinery.
Shares in the fuels supplier, which have risen 30 per cent so far this year, were up 3.3 per cent at $41.17 in early afternoon trading, their highest since April 2024.
Illustrating the soaring profitability of refining since the start of the conflict in the Middle East, gross profits from the Lytton plant in Brisbane leapt to $533.4 million in the first half, from just $1.1 million a year earlier.
Earnings before interest and tax in Ampol’s international business also jumped to $307.5 million from $2.8 million as the company cashed in on global trading opportunities amid dislocated energy markets.
In all, EBIT in fuels and infrastructure increased almost tenfold, to $1.13 billion from $118.3 million, while convenience retail EBIT climbed 12 per cent to $204.5 million.
Despite the huge profits in refining, Ampol and rival Viva Energy, the owner of the only other oil refinery in Australia, are locked in talks with the federal government over a beefed-up support package for their plants.
The package would underpin the costly investment required to ensure the refineries continue to run past 2030 and avoid Australia becoming totally reliant on imports.
Halliday said the talks, which are due to complete by the year-end, were “progressing”.
“There’s good alignment that the two remaining refineries are going to be critical for the long-term,” he said.
“And that means…that investment is required and that requires some confidence in the level of returns achievable to make them investible for that period.”
This coming year has started well, with July earnings ahead of last year, underpinned by strong earnings from Lytton.
However, fuel production will be affected by a maintenance shutdown at the refinery, which started on July 30 and is due to last 70 days, reducing output to 70 per cent of normal.
The shutdown was delayed from earlier this year to help avoid domestic fuel shortages amid heightened risks of import disruptions due to the closure of the Strait of Hormuz.
Ampol, which imports both crude oil and refined fuels, said it has supply arrangements in place for the September quarter “in line with normal buying windows”.
It also said its recent acquisition of EG Australia’s service stations would contribute to earnings in the second half. Management remains confident in delivering synergies of up to $80 million within two years, which would start flowing through to results in 2027.
Extracted in full from: https://www.afr.com/companies/energy/ampol-rewards-shareholders-with-bumper-payout-as-profits-surge-20260824-p60qvp
