Ampol Limited (ALD)
BUY

Pumped

 22 Aug 2022
Sector: Energy

1h22 result

Need To Know

  • Interim dividend 120cps, 20% ahead of consensus
  • Non-Lytton F&I EBIT $173m, outstanding
  • Lytton EBIT $444m, huge but mostly expected given LRM (Lytton Refining Margin) already known
  • Group EBIT $927m, 5% ahead of consensus

Investment implications

Group EBIT of $927m, including 2 months of Z Energy, was 5% ahead of consensus. Increased market volatility, COVID-19 issues and extreme weather all played a part in a bumper result.

Non-Lytton F&I (Fuels & Infrastructure) EBIT $173m was excellent with 2Q22 $109m, 1Q22 $64m. Increased volatility helped the trading and shipping business excel with international F&I EBIT ex-Gull up nearly 200% on 1H21.

Retail EBIT slightly disappointing at $127.3m as 2Q22 of $50m slipped up. Industry margins may have been a bit softer in 2Q. Current trading commentary notes strong margins in July (probably August too) meaning Convenience Retail exited July with EBIT in line with last year.

First contribution from Z Energy (2 months) of $14m. Outcome included ~$7m of one-off transaction costs. ALD confident of NZ$60-80m synergies.

Dividend of 120cps a positive surprise for the market. It converts to an annualised 7% dividend yield (10% gross).

Net debt (lease adjusted) up to $3.6bn. On a pro forma basis, net debt to EBITDA is only 2.2x plonking it in the bottom half of its target range.

FIGURE 1: 1H22 RESULT

FIGURE 1: 1H22 RESULT

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Stock overview

Share Price

Company overview

Ampol Australia is an independent transport fuel company. It owns and operates the Lytton Refinery in Queensland. ALD has acquired Z Energy in New Zealand for NZ$2bn. In total, ALD will have approximately 2,400 sites supplying ~23.5 BL of fuel pa.

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