How Is Ampol Leveraging Rising Refinery Margins to Fuel Retail Expansion?

Strong Quarterly Performance

Ampol Limited has delivered a solid third quarter in 2025, with Replacement Cost Operating Profit (RCOP EBIT) exceeding both the first half of the year’s quarterly average and the same period last year. The Australian Convenience Retail segment continued its strong momentum, contributing significantly to the group’s improved results. Meanwhile, the New Zealand segment, despite facing challenging economic conditions, showed signs of recovery after adjusting for recent divestments.

Lytton Refinery Margins Surge

The Lytton Refinery returned to profitability, buoyed by strengthening refiner margins that reached US$13.78 per barrel in October 2025, up from US$10.64 in the third quarter. This improvement reflects tighter global supply-demand dynamics, influenced by refinery outages and geopolitical factors affecting crude and product markets. Ampol capitalized on these conditions by increasing refinery production to 496 million litres in October, positioning itself well for continued margin gains as November product cracks have further strengthened.

Strategic Acquisition to Accelerate Retail Growth

Ampol is progressing its acquisition of EG Australia, a move designed to expand its national retail footprint and enhance its convenience retail offerings. The deal, subject to regulatory approval, is expected to deliver strong economic returns with targeted high single-digit earnings per share accretion and double-digit free cash flow accretion. Synergies estimated between $65 million and $80 million, primarily cost-related, are anticipated by the second full year post-completion, with additional upside from network optimisation and improved customer experience.

Focused Productivity and Energy Transition Initiatives

Alongside growth initiatives, Ampol is driving a productivity program targeting $50 million in cost reductions for 2025. The company is also advancing its energy transition strategy, focusing on expanding renewable fuels and electric vehicle charging infrastructure while exiting electricity retailing in Australia and New Zealand. These efforts align with Ampol’s broader ambition to evolve its energy offerings and support sustainable journeys for customers.

Outlook and Market Positioning

While Ampol’s recent results and strategic moves position it well for growth, the company acknowledges ongoing market uncertainties, including regulatory hurdles for the EG acquisition and volatile global energy markets. Investors will be watching closely how these factors influence Ampol’s operational execution and financial performance in the coming quarters.