Ampol Limited (ASX:ALD) Updates on Lytton Refinery Operations
Operational Updates at Lytton Refinery
Ampol Limited (ASX:ALD) has successfully completed repairs to the regenerator of its Fluidised Catalytic Cracking Unit (FCCU) at the Lytton refinery. This project is now moving into the start-up phase, with total production for 2024 expected to reach approximately 5.2 billion litres. The previously scheduled Turnaround and Inspection (T&I) for the FCCU has been deferred to early 2026, which aims to streamline the commissioning of the Ultra Low Sulfur Fuels project planned for the third quarter of 2025.
Financial Performance and Outlook
The company’s net capital expenditure for 2024 is now estimated at around $650 million, reflecting the timing of investments in various projects. Ampol’s leverage is anticipated to exceed the targeted range of 2.0 to 2.5 times Adjusted Net Debt / RCOP EBITDA by the end of December 2024, owing to capital expenditure timing and recent refining performance. The company expects to return to its targeted leverage range in 2025 as operational performance normalises.
Current Trading Conditions
The realised Lytton Refiner Margin increased to US$6.20/bbl in October, following a successful Reformer T&I in September. Global production cutbacks and a reduction in Chinese refined product export tax rebates have positively impacted Singapore product cracks in November. Ampol’s Convenience Retail segment continues to exhibit robust growth, supported by strong performance trends, although challenges persist in New Zealand’s economic landscape. The Fuels and Infrastructure division in Australia has been affected by domestic product purchasing in response to reduced refinery output.
Proposed Issuance of Subordinated Notes
Ampol has announced its intention to issue Australian Dollar denominated subordinated notes to wholesale investors, contingent on market conditions. The proceeds will be utilised for refinancing maturing debt facilities and general corporate purposes. The company plans to amend the terms of its existing subordinated notes to align with the new issue, ensuring consistency in ranking and other parameters. Further details will be communicated in an upcoming ASX announcement.
Executive Comments
Fran Van Reyk, General Manager of Investor Relations and Sustainability at Ampol, expressed confidence in the operational improvements and strategic initiatives: “We remain focused on delivering strong operational performance while enhancing our financial flexibility through prudent capital management strategies.”
Motley Fool contributor Aaron Shaw 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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