Ampol shares lift after divestment, oil price gain
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More news: Shares in Ampol are up more than 2% to $26.25 in early trading after the Fuel refiner and retailer agreed to divest its New Zealand and Australian retail electricity businesses. Ampol subsidiaries Z Energy and Flick Energy will sell their New Zealand electricity retailing businesses to Meridian Energy, while in Australia, it will sell its Ampol Energy Retail business to AGL Sales.
The stock has also been boosted by a more than 3% lift in crude oil prices amid a relief rally following the US-China trade war truce.
Ampol to divest Australia, NZ retail electricity businesses
The news: Fuel refiner and retailer Ampol has agreed to divest its New Zealand and Australian retail electricity businesses as it looks to take a more focused approach.
The numbers: Under the deals, Ampol’s wholly-owned subsidiaries Z Energy and Flick Energy will sell their New Zealand electricity retailing businesses to Meridian Energy for NZD70 million ($64.3 million). Ampol and Meridian will also explore a potential alliance.
In Australia, Ampol will sell its Ampol Energy Retail business, including its retail customer book, to AGL Sales for a nominal sum.
The context: Ampol said it expects to receive pre-tax proceeds of around $65 million as a result of the two transactions. In addition, Group earnings on replacement cost basis are set to increase by $30 million per annum, reflecting the reduction in losses incurred.
The company said the decision is based on learnings generated over the last four years since Ampol launched its Future Energy and Decarbonisation strategies in May 2021. It will enable the group to take a more focused approach in areas where it can add value and compete effectively. In addition, by focusing on its EV charging network rollout, Ampol can respond more rapidly to changes in the pace and shape of the mobility energy transition over time, while generating earnings improvements in both Australia and New Zealand.
