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Ampol (ASX:ALD) has made the decision to divest its retail electricity business (powering homes) in favour of focusing on EV charging rollouts across its servo portfolio.
The market liked the news: shares were up nearly +2% (1.89%) in the first fifteen minutes of trade according to Cboe live pricing data. That could be because 1 year returns are down nearly -30%, and that wasn’t dramatically impacted by Liberation Day tariffs, either.
The name of the game behind its divestment decision, Ampol said on Tuesday, is simplification. For those who aren’t in NSW, where Ampol’s retail electricity business is based, the service station operator has also offered household power in recent years.
In mid-April, the company released a Q1 update where it pointed to a “productivity program to reduce nominal costs by $50M in 2025.” With this, it hopes to deliver a stronger 2HCY25 performance.
(With this sale, Ampol nets A$65M.)
So why is the company bailing on the household power offering specifically?
In its words, the divestment “leverages learnings generated over the last four years” – which sounds a lot like it hasn’t been too compelling of a money maker.
The company also offers a retail electricity component in NZ; in that jurisdiction, Meridian Energy will be taking on the retail electricity business off of Flick, Ampol’s subsidiary. The company hopes to work with Meridian as an “alliance.”
In Australia, gas and pipeline giant AGL will be taking on the business, but has no obligation to carry across Ampol staff, or, its EV charging business.
And that EV charging business is now what Ampol appears to be keen to keep. At least for now, as part of its simplification of its electricity assets – or ‘Energy Solutions’ arm.
It also wants to keep a focus on ‘renewable fuels’ – think biodiesels – which many majors have exited out of in recent years. One is left to wonder what kind of R&D tax benefits may or may not be associated with such a position.
ALD last traded at $25.76/sh.
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