Ampol share price jumps on record dividend

The fuel giant's dividends for 2022 come to $2.75 per share.

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Key points

  • The Ampol share price is up 2% right now, trading at $32.41
  • It comes after the petroleum refiner and distributor posted record EBIT on a replacement cost basis for 2022
  • It also declared a $1.05 per share final dividend and a 50 cent per share special dividend

The Ampol Ltd (ASX: ALD) share price is in the green this morning after the company posted its full-year earnings.

Shares in the S&P/ASX 200 Index (ASX: XJO) fuel giant are up 2% at the time of writing, trading at $32.41.

Ampol share price gains as dividend more than doubled

  • $795.9 million of statutory net profit after tax (NPAT) – 42% higher than that of the prior comparable period (pcp)
  • Replacement cost operating profit (RCOP) earnings before interest, tax, depreciation, and amortisation (EBITDA) reached $1.76 billion – an 84% improvement
  • Full year RCOP earnings before interest and tax (EBIT) came to $1.3 billion – a 124% improvement and a new record
  • Its convenience retail leg posted $347.2 million of RCOP EBIT – a 37% improvement and a five-year high
  • Lytton Refinery delivered $687 million of RCOP EBIT – a 9% fall on the pcp
  • Declared $1.05 per share fully franked final dividend – up 156% – and a 50 cent per share special dividend

Last year was a good one for Ampol, and its shareholders are benefiting. Including the special dividend announced today, the company will pay out $2.75 per share for 2022 – representing 86% of RCOP NPAT.

It ended the year with $2.36 billion of net borrowings.

What else happened last half?

The company sold a record 24.3 billion litres of fuel in 2022. Of that, 14.05 billion litres went to Australia – a 7.6% year-on-year improvement. Meanwhile, international customers bought 7.52 billion litres – down 16%.

It also successfully acquired Z Energy and divested Gull.

Z Energy saw 2.76 billion litres of fuel pumped in Ampol's eight months of ownership.

What did management say?

Ampol CEO and managing director Matt Halliday commented on the results driving the company's share price higher, saying:

2022 has been another very successful year for Ampol as the integrated supply chain combined to deliver a record financial result and supported the declaration of record shareholder dividends.

We remain disciplined with our allocation of capital, prioritising shareholder returns as we strive to get the balance right between core business optimisation and targeted investment in the energy transition to meet the evolving needs of our customers.

What's next?

Ampol had a strong start to 2023 in January.

The refined products market was strong, with Lytton realising a US$18.40 per barrel refiner margin as gasoline cracks recovered from fourth-quarter lows.

Its Australian fuel volumes were also up 19% on the prior COVID-19-impacted period while Z Energy was impacted by major flooding in New Zealand. Notwithstanding that, though, it saw a 28% jump in fuel sales.

Its fuels and infrastructure leg (excluding Lytton and Future Energy) has been tipped to benefit from the COVID recovery, particularly in jet fuel sales, and Z Energy is expected to contribute full-year earnings in 2023.

Ampol share price snapshot

The Ampol share price has been outperforming lately.

Today's gains included, the stock is 18% higher than it was at the start of this year. It has also gained 8% over the last 12 months.

For comparison, the ASX 200 has lifted nearly 6% year to date and 1.5% over the last 12 months.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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