Ampol share price dives on 68% full year profit plunge

Ampol shares are under pressure amid eroding earnings and dividends.

| More on:
A man looks frustrated with hand on head as he fills up car at a service station.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ampol Ltd (ASX: ALD) share price is taking a tumble today. 

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed Friday trading for $28.03. In early morning trade on Monday, shares are changing hands for $27.16 apiece, down 3.1%.

For some context, the ASX 200 is down 0.9% at this same time.

This underperformance follows the release of Ampol's full calendar year 2024 results.

Here's what's happening.

Ampol share price slides alongside earnings

The Ampol share price is taking a hit after the Aussie fuel supplier reported a 45% year on year decline in replacement cost operating profit earnings before interest and tax (RCOP EBIT) of $715 million. 

RCOP earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.2 billion was down 32% from 2023.

While ASX 200 investors had previous insight to these figures from Ampol's fourth-quarter update in January, the 68% plunge in RCOP net profit after tax (NPAT) to $235 million in 2024 is likely adding to the headwinds facing the Ampol share price today.

At $123 million, statutory NPAT was down an even steeper 78% from 2023.

Ampol's Lytton refinery reported a $42 million full-year EBIT loss (down from a $363 million positive EBIT in 2023), hit by "challenging global refining" conditions and operational disruptions over the year.

Still, Ampol cited growth in earnings from its Convenience Retail business and "resilient performances" from New Zealand and Fuels & Infrastructure Australia amid challenging economic environments as underpinning the results.

As for passive income, the board declared a final dividend of 5 cents per share, fully franked. That's a massive retrace from last year's final dividend payout of $1.80 per share.

Ampol's balance sheet also went backwards, with net borrowings of $2.77 billion at 31 December 2024, up from $2.20 billion at 31 December 2023.

What did management say?

Commenting on the full-year results that are pressuring the Ampol share price today, CEO Matt Halliday said, "The 2024 financial year was one of challenging global refining and commodity markets that impacted both our Lytton refinery and Trading and Shipping operations". 

Halliday added:

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.

Now what?

Looking at what could impact the Ampol share price in the months ahead, the company noted the Lytton Refiner Margin for January was US$6.31 per barrel. That's above the LRM reported in December but remains below historical averages. Management said this is primarily due to lagging crude premiums and short-term compression of the freight differential.

With New Zealand's central bank actively cutting interest rates, management said "green shoots of improved trading conditions" are evident in its businesses in the country as the benefits of the rate-cutting cycle take effect.

Management added:

Overall markets have seen an uplift in uncertainty due to global political dynamics and trade policy speculation. While it is too early to be conclusive on the implications, the integrated nature of Ampol's value chain means we are well placed to navigate changing conditions through our Trading and Shipping operations which should benefit F&I International.

With today's intraday fall factored in, the Ampol share price is down 30% over 12 months.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Earnings Results

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Web Travel share price rockets 13% on market leading full-year growth

Investors are sending Web Travel shares soaring today. Here’s why.

Read more »

Happy shopper at a clothes shop.
Earnings Results

Why did Myer shares just rocket 9%?

Investors are piling into Myer shares on Friday. But why?

Read more »

A woman looks up at a plane flying in the sky with arms outstretched as the Flight Centre share price surges
Earnings Results

Up 78% since April, why is the Webjet share price taking off again today?

Webjet shares have soared 78% since 4 April and are lifting off again today. But why?

Read more »

a woman holds her hands to her temples as she sits in front of a computer screen with a concerned look on her face.
Industrials Shares

Guess which ASX 200 stock is crashing 24% on results day

Investors were not impressed with this result. But why?

Read more »

A man in full American NFL playing kit crouches over with his arms across his chest in a defensive stance against a dark background.
Technology Shares

ASX 300 tech stock charges 7% higher to record high on stellar results

This tech stock delivered another impressive result this morning.

Read more »

a group of people sit around a computer in an office environment.
Earnings Results

Guess which ASX 200 tech stock is rocketing 12% on record results

Another half, another record result from this high-quality company.

Read more »

A young man sitting at an outside table uses a card to pay for his online shopping.
Consumer Staples & Discretionary Shares

Why is the Kogan share price crashing 12%?

Profits are down at this ecommerce company during the second half.

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Resources Shares

Guess which ASX 200 mining stock is sinking 7% following its quarterly update

Let's see how this miner performed during the third quarter.

Read more »

OSZAR »