Ampol doubles dividend, notches up record profit

Fuel giant Ampol has doubled its dividend and posted sharply higher first-half profits, as refining margins surged due to the global energy shock and extreme weather.

Ampol, previously known as Caltex, on Monday more than doubled its interim dividend to 120c a share, as the company’s preferred measure of profitability jumped to a record high.

Ampol profits more than doubled as refining margin exploded.Credit:Justin McManus

Ampol said its statutory net profit after tax jumped by 114 per cent to $695.9 million for six months to June, as the margins of oil refiners lifted to unprecedented highs in the latest quarter.

The company’s preferred measure of profitability – replacement cost of operating profit earnings before interest and tax (RCOP EBIT) – also leapt by more than 100 per cent to $734.1 million, which was a record for the company.

“Against the backdrop of increased market volatility due to the global energy shock, COVID-19 outbreaks and extreme weather, Ampol has delivered the strongest half-year replacement cost operating profit in its history. This result demonstrates the benefits of Ampol’s integrated supply chain,” chief executive Matt Halliday said.

As oil prices surged earlier this year, global oil refining margins exploded, and Ampol said this was had been the key reason for a surge in profits in its fuels and infrastructure business. Ampol said RCOP EBIT at its refining operations at Lytton, in Queensland, had surged from $49.3 million to $443.9 million in the half.

Ampol said its convenience store retailing business had posted a decline in earnings because of the impacts of the Omicron strand of COVID-19, flooding and softer demand for fuel because of high retail prices.

UBS analyst Joseph Wong said the dividend was higher than expected, while profits were in line with market expectations in an “operationally solid result.”

Ampol shares were 1.4 per cent higher at $34.62 in late morning trading.

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