ALD is primarily involved in the purchase, refining, distribution and marketing of petroleum products and the operation of convenience stores – most of us are leaving more money behind at their service stations than we would like! Yesterday saw ALD end Wednesday up +3.8%, the most in two years, as 3Q Total Sales Volume jumped +26% year on year, as trading volume soared to 5x its 20-day average.
ALD –12.56%: Hit hard following a disappointing trading update today which showed they were caught out by holding Jet Fuel purchased at higher levels before selling for a loss, partially offset by strong results in Refining, Convenience Retail and Z Energy. They did talk to continued volatility in conditions but went onto say that they were still on track to deliver record...
The combination of solid fuel demand, the successful acquisition of Z Energy and higher refining margins in 1H22 helped lift ALD to fresh post-COVID highs in recent weeks, a rally that was particularly noticeable in a falling market. MM likes the refining sector with ALD our preference over Viva Energy (VEA) although they both look destined for fresh 2022 highs in the not too distant future.
1H21 Result + proposed acquisition: Todays result was inline with expectations operationally so the focus was squarely on the news that they had launched a bid for NZ based Z Energy. The price offered is a big one, implying 9.1x EV/EBITDA while Z Energy has traded at 7.8x on average over the last 5 years plus they have had 4 profit downgrades in the past 2 years - ALD itself trades...
Companies reporting today on MM’s radar include:
Ampol (ALD) 1H21 Results: Expectations for 1H21 NPAT of 171m & Dividend of $0.433
Charter Hall Group (CHC) FY21 Results: Funds From Operations (FFO) per share of $0.58, NPAT $269m & DPS of $0.38. FY22 expectations are for strong profit growth (+24%) to $333m
Chorus (CNU) FY21 Results: Expectations for revenue of $947m, EBITDA of $645m, NPAT of $50.84m (down ~2% on FY20), EPS of $0.111, FY Dividend $0.25. Market currently pricing NPAT for FY22 of $49.25m, flat on FY21.
Yesterdays “top performer” was Ampol (ALD) which embraced its solid earnings report – considering we believe this is a year to buy weakness and sell strength our interest was pricked by this fuel operator which is trading almost 30% below its 2020 high.
Ampol Limited is Australia-based company engaged in fuels and infrastructure, and convenience retail business. The Company is primarily involved in the purchase, refining, distribution and marketing of petroleum products and the operation of convenience stores. The Company segment includes Convenience Retail and Fuels and Infrastructure. Its Convenience Retail segment includes revenues and costs associated with fuels and shop offerings at Ampol’s network of stores, including royalties and franchise fees on remaining franchise stores. Its Fuels and Infrastructure segment includes revenues and costs associated with the integrated wholesale fuels and lubricants supply for the Company, including the Company’s international businesses, which consists of lytton refining, bulk fuels sales, trading and shipping, infrastructure, and the Gull and Seaoil businesses. The Company operates in Australia, New Zealand, the United States and Singapore.
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