Ampol Earnings: Strong Shop Performance Despite Decline in Tobacco

Our AUD 35 fair value estimate for no-moat Ampol stands. That’s despite Australia’s largest refined fuel retailer reporting lower-than-expected underlying 2023 net profit after tax, down 3% to AUD 289 million against our AUD 334 million target. We read no long-term implications. A better-than-expected performance from convenience retail was more than offset by a worse outcome from fuels and infrastructure, with lower margins featuring. We expect the latter to normalize over the next couple of years. Earnings declined at Lytton refinery and improvements at Z Energy in New Zealand were largely as expected.