Ampol delivers record dividend, South32 scraps Dendrobium coal mine extension and APA CEO’s shock resignation

Ampol (ASX: ALD) has announced an interim dividend of $1.20 per share in its latest half year report – signalling the company’s largest interim dividend it has ever paid.

The $1.20 per share dividend is an increase of 130% over the previous corresponding period’s, which was $0.52 per share.

The company reported an 83% rise in revenue to $11.33 billion, largely due to fuel demand re-surging in recent months as gas and diesel supply remains tight.

Total sales volume for the company rose 4% to 11.5 billion litres, as a result of jet fuel sales rising as air travel recovered from COVID-19 riddled times.

Despite this, Ampol chief financial officer Greg Barnes said jet fuel volumes remained 30% below pre-COVID-19 levels.

Chief executive officer Matt Halliday said the company had delivered its strongest half year replacement cost operating profit in its history and that it was in a strong position going forward.

“As the leading provider of fuel in Australia and New Zealand, Ampol is well positioned to benefit from the ongoing recovery in fuel demand,” he said.

South32

South32 (ASX: S32) will not go ahead with a US$700 million upfront investment to extend its Dendrobium metallurgical coal mine in New South Wales.

The Perth-based mining company said the anticipated returns on the mine were not enough to justify the investment the extension would require.

South32 chief executive officer Graham Kerr said the company’s capital would be more useful in other areas.

“Over the past 18 months we have made significant progress actively reshaping our portfolio and this decision increases our capacity to direct capital toward other opportunities,” he said.

South32’s announcement comes to the delight of the “Protect Our Water Catchment” group, suggesting state government should use this as an opportunity to create legislation to prevent any future mining in the water catchment.

Although the expansion has been scrapped, South32 remains focused in optimising the mine, as well as the whole Illawarra metallurgical coal complex.

Dendrobium commenced operations in 2002 and supplies coal to BlueScope Steel’s (ASX: BSL) Port Kembla plant, and the Whyalla Steelworks.

Through its current licence, the mine will continue operating until 2030.

APA Group

APA Group (ASX: APA) has announced the shock resignation of Rob Wheals as chief executive officer, following the company’s decision to call off a long-standing effort to expand into the United States.

Australia’s biggest natural gas infrastructure business first outlined its intentions to expand into the US back in 2016 – eyeing gas infrastructure assets within the world’s largest gas market.

APA chairman Michael Fraser said the risks had become far too significant to continue to pursue the US market.

“We have been screening the US utilities market for over three years now and whilst there are clearly attractive aspects to that market, it also involves a number of risks and ongoing investment challenges,” he said.

The company will now shift its focus towards capitalising on the Australian market as it transitions to a low-carbon energy future.

Mr Wheals said reaching the decision to step-down had been a “process” after an “intense couple of years in the energy industry” combined with COVID-19 challenges.

“This, together with the decision not to pursue an acquisition in the US, has led me to conclude that now is the right time to move on,” he said.

Mr Wheals, who took up the role of APA chief executive officer in 2019, will officially step-down at the end of September, with APA chief financial officer Adam Watson appointed acting chief executive officer, while the board undertakes a full search process in a bid for a new head.

Qantas

Australia’s largest domestic and international airline Qantas (ASX: QAN) will be issuing its Frequent Flyer loyalty program customers $50 vouchers in an effort to make amends for recent airport disturbances.

Qantas chief executive officer Alan Joyce has offered the vouchers after issuing an apology for months of flight cancellations, delays and luggage mishandling.

“Over the past few months, too many of you have had flights delayed, flights cancelled, and bags misplaced,” he said.

“There are good reasons why, but when it comes to what you expect from Qantas, it’s not good enough.”

“On behalf of the national carrier, I want to apologise and assure you that we’re working hard to get back to our best,” he added.

Qantas acknowledged that resuming flying services post COVID-19 lockdowns “… hasn’t all gone smoothly”.

The airline giant has vowed to continue to hire new staff, with 1,500 new people onboarded since April. The carrier is also continuing to adjust flight schedules to have more crew, due to the increase in sick leave.

Qantas has also invested $15 million into “new technology at key airports to help smooth the travel experience”.

Boral

Leading Australian construction material company Boral (ASX: BLD) released its earnings for financial year 2022 on Tuesday, with net after tax profit of $150 million – down from $251 million in the previous corresponding period.

The company said its earnings were impacted by increases in energy prices and cartage costs, while sales were impacted by rainfall and construction shutdowns.

Boral chief executive officer and managing director Zlatko Todorcevski said despite its’ best efforts, the full effects were felt across the industry.

“However, industry-wide construction lockdowns and exceptional rainfall … curtailed volumes and significantly impacted margins,” he said.

“In addition to reducing operating efficiency, these events resulted in additional operating and repair costs.”

“With supply chain constraints and labour shortages remaining a key issue across the industry, major projects continued to experience delays,” he added.

Despite this setback, the company remains optimistic looking forward, expecting its revenue to increase this fiscal year, driven by price growth and increased volumes.