Viva Energy slips as refining, retail drag
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More news: Shares in Viva Energy are down 2.4% to $2.67 in early trading after the fuel refiner and retailer said conditions remained challenging for retail and refining businesses in 2024.
The company expects full-year 2024 group earnings to rise to $750 million, aided by record commercial and industrial fuel sales in the December quarter. However, it has also flagged a $20 million hit to the new year earnings following a power outage at the Geelong refinery in January.
Viva Energy lifts FY sales, flags higher earnings
The news: Fuel refiner and retailer Viva Energy expects full-year earnings to be higher after record commercial and industrial fuel sales volumes in the December quarter.
The numbers: Viva expects full-year 2024 group earnings to be $750 million, up from $710 million in the previous year. Refining volumes were up 8.5% for the year, while refining margins were down 11.2% from a year ago.
Overall fuel sales volumes for the year were up nearly 4% to 16.8 billion litres, helped by record December quarter sales of 3 billion litres in the commercial and industrial (C&I) segment.
The context: Viva said solid growth from the C&I business offset challenging retail and refining conditions. Replacement cost earnings in the convenience and mobility business are expected to be near the bottom of its guidance range $230 million to $260 million.
Retail fuel margins were lower than the same period last year and illicit tobacco continued to affect both the OTR and Reddy Express businesses, it said.
Refining margins were negatively impacted by late crude arrivals, an unplanned outage of the residual catalytic cracking unit (RCCU) and other minor planned maintenance which reduced intake at its Geelong refinery.
Meanwhile, operations have restarted this week at the site after a power outage on 12 January, which caused an unscheduled shutdown across all process units. However, the earnings impact of the outage is expected to be around $20 million, Viva said.
The source: ASX announcement
