Ampol has been the second-worst performing company on the ASX200 following market disappointment over its trading update.
Although the petrol station owner and refiner said it was on track to deliver record full-year earnings after making $1 billion before interest and tax in the nine months to September 30, it also declared a $21.3 million third-quarter loss in its fuel and infrastructure business.
"Ampol was a net beneficiary of higher product freight costs which bolstered LRM (liquity risk management) but were a headwind to F&I (fuel and infrastructure, excluding the Lytton refinery) margins on jet fuel sales," the company said on Tuesday.
RBC Capital Markets analyst Gordon Ramsay wrote in a research note that higher freight costs had reduced margins for jet fuel, which Ampol imports and sold at relatively thin margins.
The jet fuel market was in "backwardation", meaning spot prices were higher than they were in the futures market, Mr Ramsay said.
"Ampol appears to have been caught out by holding product for a few months that has ended up being sold at a loss," he wrote.
He called the trading update a negative.
"Overall, Ampol needs to stem its trading losses on jet fuel sales."
Managing director and chief executive Matt Halliday said Ampol had "delivered another quarter of strong volume, financial and operational performance, reinforcing the resilience of our integrated value chain and business model".
Since the end of the quarter, Australian retail and wholesale sales had been "largely unaffected" by the return of the full fuel excise levy, which the Morrison government halved for the six months ending September 28.
"While retail margins continue to fluctuate in response to the volatility of product costs, shop sales have remained strong and convenience retail is well positioned as it heads into the fourth quarter," Ampol said.
The company said it spent $8.6m in the third quarter on "future energy" as it commended the rollout of its electric vehicle charging network, which it envisions will be the leader in Australia.
It has rebranded more than 200 of the EG service stations it bought from Woolworths in 2019 and is on track to finish rebranding all 1900 of them by year-end.
Ampol shares were down 11.6 per cent at 1.37pm AEDT to a one-year low of $27.65.
