Australia's biggest integrated petroleum company Ampol has posted a surge in profit and more than doubled the interim dividend after a first-half of surging fuel prices amid a supply shock.
Shares in the servo chain and refinery operator rallied 75 cents or 2.2 per cent to $34.89 in afternoon trade on Monday on the dividend bonanza and the chance of a future buyback.
Ampol declared a fully franked interim dividend of 120 cents per share for the six months to June 30, more than double the prior interim dividend and more than the total dividend for the full fiscal 2021 year.
The net profit of $695.9 million for the six months to June 30 represented an increase of 114 per cent compared to the previous first half, with total sales volumes increasing to 11.5 billion litres.
Ampol delivered the strongest half-year replacement cost operating profit (RCOP) in its history with earnings before interest and tax (EBIT) of $734.1 million despite COVID-19 disruption and flood damage at retail outlets.
Managing director and CEO Matt Halliday told analysts the company expected to continue to ride out global energy market volatility, taking opportunities along the supply chain.
The rebrand of the Ampol-owned network is almost complete with 1285 sites rebranded at June 30, and EG sites to be rebranded by the end of the year.
Four NSW highway service centres at Pheasants Nest on the Hume Highway and the M4's Eastern Creek are being progressively redeveloped.
The total number of retail sites would continue to be consolidated, similar to the 17 in the first half, retail general manager Kate Thomson said.
The Lytton oil refinery in the Brisbane was the major contributor to a stronger result, helped by a resurgence for jet fuel and higher margins in shipping.
Jet fuel demand rose 59 per cent but is still almost a third below pre-pandemic levels.
The division's RCOP EBIT grew to $575.8 million as refiner margins reached "unprecedented highs" in the three months to June, with Lytton's RCOP EBIT $443.9 million compared to $49.3 million in same period a year earlier, the company said.
"There's a fair bit going on in the results," chief financial officer Greg Barnes said.
The Lytton refiner margin reached $US32.96 ($A47.78) per barrel in the second quarter, up from $US10.59 in the three months to March.
"The significant increase reflected a combination of global factors, including COVID demand recovery and low inventory levels, especially diesel," he said.
"This was compounded by the supply shock caused by Russian sanctions and Chinese export quotas."
Quizzed by analyst Dale Koenders at Barrenjoey about a future share buyback, the CFO didn't rule it out.
But Mr Barnes said any buyback would have to be weighed against the need for investment in the energy transition, and a return to less volatile operating conditions.
Ampol launched its electric vehicle charging brand AMPCharge in April 2022 and commenced the rollout of the first phase of its electric vehicle charging network, with the first sites operational in July.
An investigation and clean up after the Kurnell terminal wastewater overflow in April has been completed, after heavy rain sent hydrocarbon residue into the community's storm water drains.
In New Zealand Ampol completed the acquisition of Z Energy, which controls around half of the petrol retailing market, and sold Gull to meet regulatory concerns about market dominance.
Gull was sold to Australian private equity firm Allegro Funds in March, approved by regulators in June and the deal completed in July.
