Ampol Posts $1.36 Billion Profit, Expands Retail Network with EG Australia Deal

Profit Surge Driven by Market Disruption and Refinery Strength

Ampol Limited (ASX:ALD) has delivered a stunning financial performance for the six months ended 30 June 2026, posting a statutory net profit after tax attributable to shareholders of $1.36 billion, a remarkable turnaround from a loss of $25.3 million in the prior corresponding period. This surge was underpinned by elevated refining margins at the Lytton refinery, which benefited from geopolitical tensions in the Middle East disrupting global supply chains.

The Lytton refinery margin soared to US$28.26 per barrel, an increase of 280% year-on-year, as global refining capacity tightened and product cracks widened. Total refinery production rose 8.7% to 2,945 million litres, bolstering domestic fuel security and cash flow generation. Ampol’s integrated supply chain, combining refining, trading, and shipping, proved resilient and agile amid the market disruption, enabling the company to capture value and meet customer demand effectively.

EG Australia Acquisition Expands Retail Network and Accelerates Growth

On 30 June 2026, Ampol completed its $1.165 billion acquisition of EG Group Australia, significantly expanding its company-controlled retail footprint by 511 sites, bringing the total to approximately 1,130 sites. This acquisition is a strategic milestone in Ampol’s retail segmentation strategy, allowing a broader rollout of the value-oriented U-GO brand and the Ampol Foodary convenience offer.

The deal includes an undertaking to divest 41 overlapping sites to satisfy the Australian Competition and Consumer Commission’s conditions, with the divestment expected within six months. Management anticipates $65 to $80 million in annual cost synergies to be realised within two years post-completion, with benefits flowing from FY 2027. Notably, Ampol elected to cash settle the scrip component of the acquisition, preserving full earnings accretion for shareholders.

Convenience Retail and Energy Solutions Show Positive Momentum

Ampol’s Convenience Retail segment posted a 12% increase in replacement cost operating profit (RCOP EBIT) to $204.5 million, supported by a 2.4% growth in fuel volumes and a 3.5% increase in shop sales excluding tobacco and U-GO conversions. The U-GO brand contributed significantly to earnings growth, with retail fuel volumes up 64% compared to the prior year. Shop gross margins improved to 40.1%, reflecting favourable product mix and operational efficiencies.

Energy Solutions, focused on electric vehicle (EV) charging infrastructure, reported narrowing losses with EBIT losses of $15.6 million, down 35% from the prior year. The AmpCharge network expanded to 356 charging bays in Australia, with EV sales exceeding 20% of new car sales in recent months, indicating accelerating demand for EV charging services.

Balance Sheet Strength and Capital Management

Despite the acquisition and increased inventory levels to bolster fuel security, Ampol maintained a robust balance sheet with net borrowings of $3.52 billion as at 30 June 2026, up from $2.9 billion at the end of 2025. Gearing decreased slightly to 43.3%, reflecting strong equity growth. The company has access to $5.8 billion in committed debt facilities and recently closed a $400 million delayed-draw subordinated notes facility to refinance upcoming debt maturities, enhancing financial flexibility.

Capital expenditure for the half was $174.4 million, including $101 million on the Lytton Ultra Low Sulfur Fuels (ULSF) project and $10 million on EV charging infrastructure. Net operating cash inflows rose sharply to $972 million, driven by strong earnings and working capital management.

Dividend Policy Reflects Confidence in Earnings Sustainability

The Board declared a fully franked interim dividend of 185 cents per share, more than quadrupling the prior year’s interim payout of 40 cents. This represents a payout ratio of 51% of underlying RCOP net profit after tax, aligning with Ampol’s dividend policy of distributing 50% to 70% of underlying earnings. The dividend will be paid on 30 September 2026 to shareholders on record as of 7 September.

Navigating Ongoing Market Volatility and Energy Transition

Looking ahead, Ampol faces continued volatility in crude and product markets due to geopolitical tensions, including disruptions in key shipping routes such as the Strait of Hormuz and Bab-el-Mandeb Strait. The company’s supply arrangements for the third quarter are secured, and regional refining margins remain supportive. The Lytton refinery has commenced a scheduled Turnaround and Inspection maintenance period, with restart expected in October.

In retail markets, tighter fuel margins reflect a lag in passing through rising landed costs, expected to be temporary. The integration of EG Australia is underway, with management confident in delivering synergy targets and earnings contributions in the second half of 2026 and beyond. Ampol continues to invest in its energy transition strategy, focusing on EV charging networks and lower carbon liquid fuels, positioning itself for evolving customer needs.