Lockdowns must end once 70% target met, says Ampol boss Matt Halliday
Ampol chief executive Matt Halliday said the 70 per cent vaccination target was the right approach and states should re-open when the goal was hit
Fuel retailer Ampol has described rolling lockdowns as unsustainable and urged states to start opening up once Covid vaccination levels hit 70 per cent.
A national plan would see the country reopened and an end to large-scale lockdowns once 70-80 per cent of the eligible population are vaccinated, with some freedoms granted at 70 per cent and larger-scale changes if the 80 per cent target is reached.
The call came as Ampol plotted to become a trans-Tasman fuel giant, unveiling a $1.9bn bid for New Zealand’s Z Energy.
Ampol chief executive Matt Halliday said the 70 per cent vaccination target was the right approach and states should reopen when the goal was reached.
“I think increasingly people are seeing that the lockdowns are not sustainable,” the Ampol boss said after releasing the company‘s half-year results.
“In fact, there are a range of impacts on people healthwise and economically that result from lockdowns.
“As soon as we hit our targets from a vaccination perspective, we need to see the country back opening up.”
Latitude CEO Ahmed Fahour also warned that lockdowns would be a disaster for Australia if extended into next year, and threw his support behind Prime Minister Scott Morrison’s plan to open up the country once vaccination rates reach 70-80 per cent.
“Perpetual lockdowns are not sustainable. It won’t happen,” Mr Fahour said.
States should act unilaterally once goals are met, according to the Ampol chief.
“As certain states get there and if domestic borders are still not open, then I would say we shouldn’t be waiting to lift restrictions until every state gets there,” Mr Halliday said.
“There should be a real incentive for every state to get there and then life gets back to what it should be with vaccinations in place.
“We need to find ways to live with Covid and that’s what will happen. Vaccines are the best path.”
The pandemic hit fuel demand hard and Ampol is focusing on boosting its scale as it looks to grab a big market position across the Tasman in New Zealand.
After Santos lobbed a $21bn Oil Search proposal and Woodside Petroleum’s $40bn BHP petroleum merger, Ampol has made its first significant M&A move under Mr Halliday as it seeks to strengthen its international clout.
However, Ampol may face competition in landing its $1.9bn deal for New Zealand fuels retailer Z Energy, with several potential rivals also approaching the company over deal talks.
Z Energy offered an exclusive four-week due diligence period to Ampol on Monday after it lobbed a fourth bid at $NZ3.78 a share, but the Kiwi target also revealed it had spoken with other potential deal-makers in the past month, and they may now consider their own tilts.
“We’ve had a couple of people who’ve checked in whether we had interest in selling,” Z Energy chief executive Michael Bennetts told The Australian.
“They were mostly checking on the speculation we were in a process with someone and asking if that was true or not. And, of course, at the time we said we’re not in a process with anybody.”
“I suspect that perhaps some of those people, now that we are in a process, may come back and say I might have a better offer to provide you beyond what Ampol have already provided you. That‘s certainly a possibility here.”
Mr Bennetts declined to say how recently it had held talks with the parties.
Z Energy owns 300 petrol stations and supplies 4 billion litres of fuel annually to customers.
Ampol shares fell 4.8 per cent to $26.22 on Monday with analysts questioning the value of the Z Energy deal, which could see Ampol raising $600m of equity to fund the buyout, along with debt and cash from divestments.
The offer is pitched at $NZ3.78 a share, a 22 per cent premium to its last close on August 12, and follows three earlier, previously undisclosed bids by Ampol at $NZ3.35 on June 2, $NZ3.50 on July 1 and then $NZ3.60 a share.
Ampol will be required to sell its Gull fuel distribution business, according to Z Energy, to ease competition concerns in the market as the deal would take Ampol’s market share in New Zealand to 40 per cent across three brands.
The deal has been heavily tipped in the market with the closure of the New Zealand oil refinery at Marsden Point, of which Z Energy is a 15 per cent shareholder, seen as the catalyst for a buyout, transforming New Zealand into an all-import fuel market.
The Z Energy tilt was announced at the same time as Ampol delivered a hefty increase in half-year profits.
Earnings before interest and tax for Ampol’s Lytton refinery rose to $49m for the six months to June 30 after a steep $59m loss a year earlier and with the company pocketing taxpayer funded subsidy payments after a rescue deal with the Morrison government.
Net profit on a replacement cost basis – which strips out the impact of oil prices on its stockpiles – rose 71 per cent to $205m while group earnings on a replacement cost basis increased 54 per cent to $340m.
Earnings for its key fuels and infrastructure unit jumped 85 per cent to $208m with convenience retail edging up 19 per cent to $149m.
An interim dividend of 52c per share will be paid from 25c a share last year.
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