Ampol’s $65 Million Retail Electricity Divestment Boosts EBITDA by $30 Million

Strategic Shift in Energy Solutions

Ampol Limited (ASX: ALD) has announced a significant pivot in its energy strategy, divesting its retail electricity businesses in both New Zealand and Australia. This move is designed to simplify its Energy Solutions portfolio and concentrate efforts on electric vehicle (EV) charging infrastructure and renewable fuels, areas where Ampol sees greater potential for competitive advantage and value creation.

Since launching its Future Energy and Decarbonisation strategies in 2021, Ampol has gained valuable insights that have shaped this decision. By exiting the retail electricity market, the company aims to accelerate its response to the evolving mobility energy transition and enhance earnings performance across its core markets.

Details of the Divestments

In New Zealand, Ampol’s subsidiaries Z Energy Limited and Flick Energy Limited have agreed to sell their retail electricity businesses, including customer contracts and the Flick hedge book, to Meridian Energy Limited (NZX:MEL/ASX:MEZ) for NZ$70 million. This transaction not only transfers approximately 41,000 customer connections but also sets the stage for a potential strategic alliance between Ampol and Meridian to jointly explore opportunities in public and business EV charging as well as decarbonisation initiatives.

Meanwhile, in Australia, Ampol has sold 100% of its shares in Ampol Energy (Retail) Pty Ltd to AGL Sales Pty Ltd for a nominal sum. This sale includes the retail customer book but excludes staff, systems, and the EV charging business, which Ampol retains. Ampol and AGL have indicated intentions to explore collaborative opportunities, although details remain preliminary.

Financial Implications and Outlook

The transactions are expected to generate approximately $65 million in pre-tax cash proceeds for Ampol. More importantly, the company anticipates a Group Replacement Cost Operating Profit EBITDA uplift of around $30 million per annum by the end of 2025, reflecting reduced losses from the divested businesses. This improvement complements a previously announced $50 million cost reduction program scheduled for 2025, underscoring Ampol’s commitment to enhancing operational efficiency and profitability.

Further details on the simplification strategy and its financial impact will be disclosed in Ampol’s 2025 Half Year results presentation in August.

Market and Strategic Context

Ampol’s exit from retail electricity aligns with broader industry trends where energy companies are recalibrating portfolios to focus on growth areas such as EV infrastructure and renewable fuels. The divestments allow Ampol to reallocate resources and capital towards scaling its EV charging network, a critical component of the energy transition as electric vehicles gain market share.

For Meridian, acquiring Flick and Z Energy’s retail customers strengthens its position as New Zealand’s fourth largest electricity retailer, increasing its market share to 18%. The deal also includes a well-structured hedge book, which provides Meridian with a stable foundation to integrate the new customers.

In Australia, the nominal sale to AGL suggests Ampol’s intent to exit retail electricity swiftly while maintaining a foothold in the EV charging segment, which is expected to be a key growth driver in the coming years.