Caltex investors back rebirth as Ampol

Angela Macdonald-Smith

May 14, 2020

AFR

Caltex Australia shareholders have overwhelmingly backed the fuel supplier’s rebirth under the Ampol name, which chairman Steven Gregg said would revitalise it as an independent company and supports its evolution into a regional fuels and convenience retailing business.

Shareholders on Thursday voted 99.6 per cent in favour of changing the name to Ampol, with the rebranding of the petrol stations to take place over the next two years.

The new Ampol logo will be rolled out nationally over the next two years. Dominic Lorrimer

Mr Gregg told the online shareholder meeting that the “iconic and trusted” brand better reflected the heritage and expertise of Caltex, which is pursuing life as an independent supplier after its Canadian suitor Alimentation Couche-Tard walked away last month.

The first Ampol sites, under a revamped logo, will appear in Sydney and Melbourne in the second half of this year, with a roll-out nationally in 2021. The transition from Caltex to Ampol is due to be completed by the end of 2022, with the Caltex name reverting to its original owner Chevron. The rebrand is expected to cost about $165 million over three years, but will save annual trademark licence fees of $18 million-$20 million.

The re-brand, which was announced in December, comes amid uncertainty whether Couche-Tard will renew its approaches after dropping its proposed $8 billion takeover bid, which originated well before the COVID-19 pandemic.

Mr Gregg noted Couche-Tard had advised it could seek to re-engage once there is more clarity around the global economic outlook, while stressing there was no certainty it would do so.

Interim chief executive Matt Halliday advised shareholders that the impact on the business from COVID-19 had become more acute as Caltex progressed through the second quarter.

Viva is reconsidering maintenance work at its refinery at Geelong amid a slump in margins and the need to preserve cashflow.

He confirmed jet fuel demand would be down by up to 90 per cent in Australia due to travel restrictions, while convenience retail fuel volumes were down 16 per cent in the year to April compared with the same period last year. Volume declines have been bigger for Gull in New Zealand and Seaoil in the Philippines, but the New Zealand market has improved over the past week as controls were eased.

Mr Halliday said the impact had driven the decision to bring forward and extend a maintenance shutdown at Caltex’s Lytton refinery in Brisbane. The cost of the work at the plant, which was shut earlier this month, is now expected to be reduced by 10 per cent. The shutdown has been timed to coincide with a period of weak refining margins, with Caltex having stated that the timing of a restart depends on an improvement in margins.

Trading hours at convenience retailing stores have bee reduced because of lower customer numbers, while Caltex has also cut pay for the board and senior executive teams. Capital spending has also been reduced.

Caltex and other refiners are meanwhile eagerly waiting to hear from the federal government on moves to create a strategic petroleum reserve in Australia, which could help boost their businesses.

“As the market leader in Australia, with operations across all parts of the fuels value chain, we remain ready to assist in any way we can should the government wish to do more to bolster liquid fuel security for the future,” Mr Halliday said.