Ampol posts 49% slide in Lytton refining margin during first quarter
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The news: Fuel refiner and retailer Ampol reported a 49% slump in its Lytton refining margin for the first quarter, partly due to damage caused by Cyclone Alfred last month.
The numbers: Ampol's "Lytton Refiner Margin" — the difference in value between the products produced by the refinery and the value of the crude oil used to produce them — fell 49% year on year to USD6.07 ($9.58) per barrel.
The decline was driven by increased demurrage costs after a crude tank roof at the refinery was damaged by Cyclone Alfred, as well as weakness in Singapore refined product cracks across the quarter, which lowered by USD6 per barrel year on year.
Total refinery production for the first quarter was 1.3 billion litres, down 5.7% compared to the prior corresponding period. This included the impact of 10 days of lost production as the group secured the refinery ahead of Cyclone Alfred making landfall.
The context: Ampol said if the decline in refiner margins in March and early April continue for the full fiscal quarter, the company would be eligible for payment under the government's fuel security services payment program in the second quarter.
This would provide downside protection in a period of global refining market weakness, Ampol said.
Meanwhile, the company noted that lower fuel prices are expected to be a modest tailwind for retail fuel volumes in Australia and New Zealand, as fuel becomes more affordable, and should temporarily benefit fuel margins.
The source: ASX
