Investors who were not aware Ampol (ASX: ALD) owned electricity businesses may never find out, because the Australian fuel supplier is offloading them.
Ampol announced the sale of its New Zealand and Australian electricity retail businesses to electricity generators and retailers Meridian Energy (ASX: MEZ) and AGL Energy (ASX: AGL) respectively.
The company said pre-tax cash proceeds would be about A$65 million (US$41.6 million). However, the sale of the Australian business, including the retail customer book, was for a “nominal sum”.
Earnings before interest, tax, depreciation and amortisation using the replacement cost of sales were expected to “uplift by an exit run rate at the end of 2025” of $30 million per year due to a reduction in losses relative to 2024.
“These earnings improvements are in addition to the previously announced $50 million nominal cost reduction program to be delivered in 2025,” Ampol said in an ASX announcement.
The sales were part of a strategic shift in its Energy Solutions division to streamline operations and focus more directly on electric vehicle (EV) charging infrastructure and renewable fuels.
Meridian said that under the sale agreement with Ampol’s 100%-owned Z Energy and Flick Energy units, Z Energy and Flick customer contracts and the related hedge book would move to Meridian.
“Meridian and Ampol are also working to explore deeper strategic opportunities for customer offers across public charging, business solutions and the management of Z Energy’s growing energy demand,” Meridian said in a statement.
Ampol shares closed 11 cents higher at $25.76 on Monday, capitalising it $6.14 billion, while Meridian closed 5 cents higher at $5.50, giving it a market value of NZ$15.2 billion (A$13.9 billion).
Ampol was formerly known as Caltex Australia Limited, but returned to its original name in May 2020.
