The Ampol Ltd (ASX: ALD) share price is down 2.45% at $25.85 in morning trade after the company released its full-year results.
The petroleum company (previously known as Caltex) reported that the coronavirus pandemic had a material impact on Australian fuel demand, thus delivering a hit to performance.
Here's a closer look at the results driving the Ampol share price this morning.
Results highlights at a glance
For the full year ended 31 December 2020, Ampol reported group earnings before interest and taxes (EBIT) on a replacement cost basis (RCOP) of $401 million. This compares to $607 million for the same period in 2019.
Total Australian fuels sales volumes were 13.6BL, a 17% drop compared to 2019. However, international volumes grew by 36%, totalling 6.5BL.
The total declared dividends for 2020 is 48 cents per share (fully franked).
Commenting on the annual performance, Ampol CEO Matt Halliday said:
Ampol has navigated a tough operating environment, with sustained weakness in refining margins, ongoing government restrictions impacting travel and aviation in particular, and broad economic weakness impacting demand throughout the year.
Despite the many challenges and disruptions faced, I am pleased with our progress in executing our strategy and delivering on our promises to shareholders.
In 2020, we released significant capital through our convenience retail property transaction, announced the return of capital to shareholders through our recently completed off-market buy-back, and delivered a subordinated notes issuance. We also commenced our rebrand to Ampol and we are well positioned to deliver on our targeted $195 million EBIT uplift by 2024.
Outlook for Ampol
The company advised that challenging market conditions had persisted during the early onset of 2021.
Ampol said the impact of COVID-19 on international travel had significantly impacted the demand for jet fuel. As a result, the fourth quarter of 2020 saw a 56% drop in demand compared to the prior corresponding period.
Demand for diesel fuel has remained steady during the challenging business environment, carried along by significant customer bases, including the mining industry.
Looking ahead, Mr Halliday added:
Heading into 2021, we remain focused on cost and capital efficiency and will continue to make decisions to improve returns and deliver growth to shareholders. Our refining review is ongoing, with an outcome to be communicated to stakeholders in 2Q 2021.
Snapshot of the Ampol share price
The Ampol share price has fallen 25.15% in the past 12-month period.
Ampol has a market capitalisation of $6.3 billion. There are presently 238.3 million shares outstanding.
