The ASX 200 stock market index might only have a tinge of red today, but one company is much further off the mark.
Shares in Ampol Ltd (ASX: ALD) are down 4.3% to $30.72 after the company released its first-half results to the public. Although it appears misery loves company, with only one energy business in the top 200 escaping selling pressure this morning.
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ASX 200 stock almost triples profits
Here is the pit-stop version of Ampol's results for the six months ended 30 June 2024:
- Revenue from ordinary activities down 1.1% to $18,243.7 million
- Sales volume up 15.2% to 13.25 billion litres
- Group replacement cost operating profit (RCOP) down 29% to $233.7 million
- Group statutory net profit after tax (NPAT) up 197.3% to $235.2 million
- Fully franked interim dividend of 60 cents per share, down from 90 cents per share
The dramatic change in the petroleum company's NPAT result is largely attributable to a much smaller inventory loss versus the prior corresponding period. In 1H 2023, Ampol recorded a $220.1 million hit to its books, whereas this time around, it's only $21.1 million.
What else happened in the first half?
In a sign that people are feeling the pinch, Ampol saw a 4.8% decline in fuel volumes across its convenience retail segment during the first half. However, improved fuel margins aided by an increased skew towards premium fuels offset the reduction in the litres guzzled.
Interestingly, Ampol's Z Energy segment (a New Zealand fuel retailer acquired in 2022) experienced a 3.9% uptick in RCOP earnings before interest and tax to $127.6 million. The result was achieved while New Zealand's official interest rate remains at its 15-year-high of 5.5%.
Ampol's resilient result follows a disappointing year-to-date performance for shareholders. As the chart above shows, shares are down approximately 14% since waving goodbye to 2023. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has clawed 4.5% higher over the same period.
What did the management of this ASX 200 stock say?
Ampol CEO Matt Halliday attributed the 'resilient' result to a "determined focus on the things we can control." The company's use of 'targeted value promotions', including 'Crave 'n Save,' also contributed to the strong retail segment performance.
Halliday also commented on the result of the Fuels and Infrastructure (F&I) segment, stating:
Together with a Fuels and Infrastructure (F&I) Australia result that was in line with the first half last year, the strength of these performances helped to mitigate short-term impacts from disrupted production at the Lytton refinery and softer international third-party sales and margins.
F&I RCOP EBIT fell 26% to $225.9 million in the first half, the only segment to post a year-on-year EBIT decline.
What's next for Ampol?
According to the release, the near term will involve a sizeable chunk of capital expenditure. In the first half, Ampol laid down $185.2 million. The company expects Capex to reach around $600 million for the full year, suggesting $414.8 million earmarked for the second half.
Additionally, normal operations are expected to return at the Lytton refinery by the end of August. The Brisbane-based refinery is undergoing upgrades to enable the production of higher-quality, premium fuel grades.
The ASX 200 stock is down 7.9% over the past 12 months. Ampol shares currently trade at a trailing price-to-earnings (P/E) ratio of 13.4 times earnings.
