Ampol has released its trading update for the third quarter of 2024, highlighting solid performance across several segments despite significant challenges at its Lytton refinery.
Ampol reported total fuel sales volumes of 6.5 billion litres in Q3 2024, a slight 1.7 per cent decline compared to the same period last year. Convenience Retail remained a bright spot, with volumes growing by 1.2 per cent compared to Q3 2023. Shop sales (excluding tobacco) also showed year-on-year growth, maintaining the upward trend seen in the first half of the year.
Matt Halliday, CEO of Ampol, noted the strength of Ampol’s broader business.
“Notwithstanding the challenging global refining market and operational performance of Lytton, which has been impacted by a series of one-off events this year, the rest of the business continues to perform well and demonstrate its resilience.”
New Zealand operations also performed well, with volumes increasing by 2.5 per cent from the previous year. However, the international segment saw a 9.5 per cent decline in fuel sales volumes due to well-supplied markets limiting sales opportunities.
The Lytton refinery faced headwinds during Q3, including a planned Reformer Turnaround and Inspection (T&I) and weaker refining margins globally. As a result, Ampol’s Lytton Refining Margin (LRM) dropped to US$1.48 per barrel, an 83 per cent decrease from the previous quarter.
The T&I, coupled with mechanical issues and lower product cracks, significantly impacted refinery production, which fell to 916 million litres, a 35 per cent decline. These disruptions contributed to a $100 million reduction in the Group’s RCOP EBIT.
Looking ahead, Ampol has announced further maintenance at Lytton, intending to repair the Fluidised Catalytic Cracking Unit (FCCU) in November. Production during this period is expected to be reduced to approximately 350 million litres.
Weak refining margins prompted global refiners to reduce production, leading to a modest recovery in refining margins since the start of October. Ampol aims to capitalise on these market dynamics while taking steps to improve its operational performance.
The company has also unveiled a $50 million cost reduction programme to be implemented in 2025, with more details to be provided during its full-year results in February 2025.
Despite the refinery issues, Halliday expressed confidence in the company’s future.
“We are confident in the steps we are taking at Lytton to enable stronger operational performance in 2025, which should coincide with the refiner margin impact of production run-cuts currently being taken across the world.”
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