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The Australian Stock Exchange witnessed a tumultuous Thursday as the S&P/ASX 200 Index faltered, closing down 1.29% and slipping beneath the 7,900-point mark. Among the casualties of the day was Ampol Ltd (ASX:ALD), an ASX 200 oil stock that saw its share price decline by 1.81%, opening at AU$31.81 and closing at AU$32.50. This downturn followed the release of a half-year trading update that left investors grappling with disappointing figures.
Lackluster Performance Highlights
In its trading update, Ampol attempted to portray its numbers as resilient, but the reality painted a starkly different picture. The company reported a decline in total sales volume, dropping 5.9% to 13,252 million liters compared to the previous year's 14,081 million liters. Margins at its Lytton refinery also saw a dip, falling marginally from US$10.29 per barrel to US$10.27. Oil production figures at its refineries mirrored this trend, decreasing by 5.8% year-over-year.
Financial Projections Revised
Ampol now anticipates its group operating earnings before interest and tax (EBIT) to range between AU$500 million to AU$510 million for the half-year period, translating into an earnings before interest, tax, depreciation, and amortization (EBITDA) range of AU$735 million to AU$745 million. These projections, while seemingly stable, were not sufficient to meet market expectations, contributing further to the stock's decline.
Analyst Downgrades and Market Reaction
Analysts at RBC Capital Markets responded swiftly to the trading update, slashing their earnings estimates for Ampol. Gordon Ramsay, an analyst at RBC, revised down the company's 2024 earnings per share (EPS) estimate by 12% and its 2025 prediction by 11%, citing subdued earnings expectations in both the refining and retail sectors, particularly in New Zealand's Energy business.
The market's reaction was immediate and harsh. Ampol's share price has suffered throughout 2024, plummeting approximately 10.7% year-to-date. Over the past 12 months, the stock has remained virtually stagnant, declining by 1.56%, a stark contrast to the ASX 200 Index's 7.18% gain over the same period.