Ampol Earnings Slip But Convenience and Retail Strength Offset Refining Weakness

Ampol Limited (ASX:ALD) posted weaker first-half 2025 results as refining and international fuel operations dragged on earnings, though its retail and convenience businesses in Australia and New Zealand provided resilience.

The company reported group replacement cost operating profit (RCOP) EBITDA of $649 million for the six months to June 30, down 12% year-on-year, with RCOP EBIT falling 20% to $404 million. RCOP net profit after tax, excluding significant items, came in at $180 million, while statutory results swung to a $25 million loss from a $235 million profit a year earlier.

The board declared a fully franked interim dividend of 40 cents per share, representing a 53% payout ratio.

Retail Strength Amid Refining Weakness

Ampol’s Convenience Retail division delivered RCOP EBIT of $183 million, up 4.4% from last year, supported by stronger fuel margins and a shift toward premium fuels despite a 4.6% decline in volumes. Network shop sales grew modestly as Ampol continued to diversify away from tobacco.

In contrast, its Lytton refinery saw RCOP EBIT collapse 99% to just $1.1 million as refining margins weakened, while international fuels and infrastructure EBIT plunged 86% to $2.8 million. The company’s Energy Solutions unit, focused on EV charging and renewables, remained loss-making but in line with expectations, with 180 charging bays now operational at 69 sites across Australia.

Ampol’s New Zealand business, including Z Energy, delivered EBIT of $129 million, slightly higher than last year, with commercial fuel sales offsetting softer retail demand.

EG Australia Acquisition

CEO Matt Halliday highlighted progress on Ampol’s strategy despite global uncertainty, pointing to the proposed A$1.1 billion acquisition of EG Australia, announced last week. The deal, which adds 500 company-owned sites, is expected to deliver $65–80 million in synergies, high single-digit EPS accretion, and double-digit free cash flow per share accretion. Completion is targeted for mid-2026, pending ACCC approval.

This acquisition follows Ampol’s 2022 purchase of Z Energy and underscores its pivot toward building a larger, more stable retail footprint to offset refining cyclicality. The company has also divested electricity retailing businesses in Australia and New Zealand and sold its stake in Channel Infrastructure to strengthen its balance sheet.

Outlook

Ampol said trading conditions have improved since June, with refining margins recovering in July. Convenience Retail and New Zealand operations are expected to maintain their positive trajectory, while fuel supply chain conditions have tightened. Capital expenditure for 2025 is expected to total around $600 million, including upgrades at Lytton and new premium highway service sites.

Story Continues

With leverage stable at 2.8x net debt to EBITDA, Ampol expects its balance sheet to strengthen ahead of the EG Australia acquisition.

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