Ampol expects fuel demand to continue into 2030s

Sydney-based Ampol forecasts fuel demand to extend into the 2030s amid a transition to EVs.

“The 2024 financial year was one of challenging global refining and commodity markets that impacted both our Lytton refinery and Trading and Shipping operations,” says Ampol managing director and chief executive Matt Halliday.

“While these conditions were compounded by operational disruptions at Lytton, we took advantage of the softer conditions to complete necessary repairs. This has enabled us to start 2025 with the refinery resuming normal operations and to defer the major FCCU4 maintenance shutdown into 2026.

“Our retail businesses were the highlight with convenience retail growing earnings again this year, while Z Energy delivered another resilient performance, both against the backdrop of economic environments where higher interest rates and inflation increased cost of living pressures on consumers.

“The performances of our retail business in both key markets, and of our Australian commercial fuels business, underscores the increased resilience of our business today. “Not only has it enabled relatively strong core earnings to be delivered during the period, it has also meant we could take the decisions necessary in the refinery during the softer margin environment to set us up for a clear run in 2025.”

Halliday says the combination of brand and network quality in fuel has led to an increase in premium fuel mix and growth in average fuel margins

“So, while fuel volumes were down 3.5%, this was mostly in base grades which is lower margin and where demand is more susceptible to movements in the price board.”

Ampol says its full year 2024 group replacement cost operating profit (RCOP) earnings before interest and tax (EBIT) were $715.2 million and RCOP EBITDA of $1.2 billion, as reported in January 2025, while its statutory net profit after tax (NPAT) (attributable to parent) of $122.5 million included growth in earnings from convenience retail and resilient performances from New Zealand and F&I Australia in challenging economic environments.

Ampol declared a final dividend of five cents per share which took the total ordinary dividends to 65 cents per share representing a 66% payout ratio of RCOP NPAT, the payout expected on April 3, 2025.

The company says it has progressed investment in highway sites with completion of the NSW M1 sites and commencement of the rebuild of the NSW M4 sites at Eastern Creek.

Ampol says its New Zealand operations (including Z Energy) exhibited similar trends to convenience retail, albeit in a more difficult economy.

“RCOP EBIT was $231.8 million, broadly in line with the 2023 result after adjusting for the one-off benefits of the fuel excise duty being reinstated (from a temporary reduction in 2022) in the 2023 comparative year.

“Fuel sales volumes declined 1.4%, on a like for like basis, once adjusted for the exit of the bitumen and avgas businesses in 2023. The New Zealand business benefited from improved segmentation of its offer, with Z‘s premium offer and network being complemented by a clear offer in the discount end of the market through the relationship with Foodstuffs.

“The latter benefited from an uptick in volume as consumers sought discount fuel offers in response to cost of living pressures.”

A total of 58 Z retail refresh upgrades have been completed with a further 25 stores planned for 2025, says Ampol.

“Z has also continued to execute on its energy transition strategy, growing its public charging network to 171 charge bays at 53 sites by the end of 2024.”

Fuels and infrastructure RCOP EBIT for the 2024 financial year was $186.3 million, including a loss of $39.7 million in the second half due to a material deterioration in global refining conditions and due to a series of planned and unplanned impacts to production at Lytton, says Ampol.

F&I Australia (ex-Lytton) earnings were $251.6 million, Ampol saying unplanned events at the refinery led to higher one-off costs to maintain supply to customers.

“Total Australian sales volumes were 15.4 billion litres, down 1.3% as growth in diesel sales partially offset the decline in aviation fuel sales to Defence.”

Energy Solutions (formerly Future Energy) continued the rollout of the AmpCharge on-the-go EV charging network in Australia, says Ampol.

“By the end of December 2024, 144 charging bays at 59 sites have been delivered in Australia. We have extended the public charging network beyond Ampol’s convenience network and into third party sites including Mirvac Shopping Centres.

“We continue to explore other low carbon transport solutions including renewable fuels for hard to abate sectors.”