After rising prices for refined goods drove its 2022 profit to a record level and allowed it to declare a sizable dividend, Australia’s Ampol Ltd said on Monday that it had a strong start to 2023 and was well-positioned to manage ongoing volatility in the oil markets.

According to Ampol, the top fuel supplier in the nation, the refined product markets were robust in January. Last month, compared to COVID lows, Ampol’s Australian fuel volumes and convenience retail trading both increased.

“Ampol has had a strong start to the year and is well positioned to manage the ongoing volatility in global markets.”

“Longer term, Ampol’s operations are well positioned to capture opportunities in the liquid fuels value chain,” the country’s biggest fuel supplier said as its fuel retailing unit clocked a nearly three-fold jump in operating earnings.

Ampol’s net profit after tax from continuing operations for the fiscal year that ended on December 31 increased significantly, from A$297.8 million to A$732.3 million ($502.43 million) on a replacement cost (RC) basis.

It exceeded the A$728.9 million estimate made by Refintiv.

A final ordinary dividend of 105 Australian cents per share was also declared, an increase from 41 AU cents the previous year. Additionally, a 50 Australian cent special dividend was declared.

Operators of Australia’s two refineries Ampol and smaller rival Viva Energy have benefited from higher prices for refined goods due to higher demand from a rebound in air travel and limited supply from China.

“Strong operational performance and the ability to secure sufficient crude supply through our international sourcing team, meant Lytton captured the elevated refiner margins available in 2022,” Ampol said.

Earnings before interest and taxes (EBIT) from continuing operations at the Lytton Refinery, run by Ampol with government assistance through at least 2027, totaled A$686.7 million for the year on an RC basis, up from A$158.7 million the previous year.

Ampol’s Fuels and Infrastructure (F&I) unit reported EBIT from continuing operations of A$853.0 million on an RC basis, up nearly 180% from a year earlier. The unit is anticipated to benefit from the recovery in jet fuel demand as a result of the removal of COVID restrictions.

However, the fuel retailer pointed out geopolitical factors, such as Russian sanctions and China’s decisions on product exports, that are likely to keep influencing the markets for crude and refined products in 2023 and over the next few years.

(Adapted from EconomicTimes.com)