Viva Energy posts 12.5% drop in Q3 convenience sales
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The news: Fuel retailer Viva Energy reported a 12.5% slide in convenience sales for the third quarter, as a sharp slowdown in tobacco sales continued to weigh on the group's core convenience and mobility (C&M) business.
The numbers: Convenience sales tumbled 12.5% year on year to $392 million, dragged down by a 15% quarter-on-quarter decrease in tobacco sales. Refining intake from Viva's Geelong Oil Refinery was down 23% year on year, reflecting planned major maintenance.
Group fuel sales lifted 0.9% year on year to 4,203 million litres (ml). Commercial and industrial fuel and specialty sales increased 2.4% to 2,918ml, driven by growth in the group's lower margin aviation business. However, C&M sales fell 2.3% to 1,285ml, with the fall attributed to a downturn in the broader retail fuels market and reductions in the number of stores.
The context: Viva said its third-quarter earnings were lower than the previous quarter due to further declines in tobacco sales due to packaging law changes, annual store level wage cost inflation, and seasonality factors.
The group said it is expected to benefit from a seasonally stronger fourth quarter, improving execution, and a lower cost base relative to the prior corresponding period.
Viva remains on track to deliver $80 million in synergy and cost-out benefits during FY25, including an incremental $35 million for the C&M business.
The group saw its shares nosedive last month after announcing the surprise resignation of C&M chief executive Jevan Bouzo.
The source: ASX
