Ampol Limited (ASX: ALD) has provided its trading update for the third quarter of FY2024, detailing challenges at its Lytton refinery alongside solid performance across its broader business.
Lytton Refinery Challenges
The Lytton Refiner Margin (LRM) took a hit, dropping to US$1.48 per barrel, reflecting:
- Scheduled maintenance (T&I) and subsequent performance issues with the Reformer, which required extra repairs.
- Weak global refining margins and a temporary mismatch in crude pricing.
Production volumes for the quarter came in at 916 ML, with operational disruptions shaving $100 million off Group RCOP EBIT.
- Weak global refining margins and a temporary mismatch in crude pricing.
Further, new operational issues with the FCCU will see the refinery running at reduced rates in November, producing around 350 ML of high-value products. However, no customer supply disruptions are expected.
Bright Spots: Convenience Retail and NZ Operations
- Convenience Retail performed strongly, with improved fuel margins and solid shop sales, maintaining momentum from 1H24.
- New Zealand saw steady sales volumes, though lower year-on-year due to the absence of 2022’s excise duty impacts.
Fuel & Infrastructure (F&I)
- Domestic wholesale volumes were impacted by the refinery outage, but F&I International remained profitable, despite limited opportunities in well-supplied global markets.
Global Refining Recovery in Sight
In response to weaker refining margins, several international refiners have reduced production, lifting Singapore’s Weighted Average Margins (WAM) to around US$10-11 per barrel since October.
Cost Reduction and Outlook
Ampol is implementing a $50 million cost-cutting program for 2025, with additional productivity initiatives underway. CEO Matt Halliday is optimistic:
“While this year has brought unique challenges for Lytton, our broader business remains resilient. We’re taking steps to position Lytton for stronger performance in 2025, aligning with improving global refining conditions.”
