Asian Slump, Cyclone Alfred, Slash Anpor refinery margin
Aaditya Govindrao and Adwitiya Srivastava
(Reuters) – Australia’s top fuel retailer Ampol reported a 49% decline in the first quarter refinery margin for Queensland’s Lytton refinery refiners on Wednesday.
Our shares fell by 2.1% as of 0415 GMT to reach its lowest level since April 9th.
Anpol said the Lytton refinery margin fell to $6.07 per barrel in the first quarter, down from $11.80 last year, mainly due to a decline in Singapore’s refinery profits.
Asia’s gasil refinery margin collapsed to its lowest in nearly three years until the end of 2024 due to oversupply and sustained soft derivatives markets dropping prices.
Ampol also cited the effects of Cyclone Alfred. This increased the cost of extermination due to damage to the roof of the coarse tank.
One of Ampol’s key assets, the Lytton refinery, took aggressive measures to secure the facility before the cyclone landed, endured lost production in about 10 days of production. Refinery’s quarterly output fell 5.7% to 100 billion litres.
Oil refiners are facing a sluggish profitability due to slowing economic growth and increasing penetration of China’s electric vehicles. New refineries, which are emerging online online in Africa, the Middle East and Asia, are also putting downward pressure on margins.
If the refinery margins continue to slump in the second quarter, Ampol will be eligible for payments under Australia’s Fuel Security Services Payment Program, “providing downside protection during periods of weakness in the global refinery market,” the Sydney-based company said.
Meanwhile, Ampol’s Australian Convenient Retail segment said its mid-digit percentage of revenue has grown, strengthened by improved fuel margins and in-store execution strategies.
“Aside from the short-term cyclone impact, ALD’s convenience retailer is working well with its premium fuel strategy and store refresh program, along with a $50 million cost-out program,” an analyst at Sandstone Insights said in a memo.
(Reporting by Aaditya Govind Rao and Adwitiya Srivastava of Bengaluru, edited by Maju Samuel and Alan Barona)