Viva Energy profit plunges 67% to $62m on weak sales, fuel margins
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The news: Oil refiner and retailer Viva Energy has delivered half-year net profit of $62.6 million, a 67.4% decrease on the previous corresponding period as the company faced lower sales and fuel margins at its convenience and mobility business as well as weak regional refining margins.
The numbers: Viva Energy reports on a replacement cost (RC) basis and is adjusted to remove the effect of significant one off items. In the first half of 2024 Viva Energy posted a half-year net loss of $192.1 million.
The market consensus estimate for the first-half of 2025 was for a $53.4 million profit, according to Visible Alpha figures. On a historical cost basis, Viva Energy's posted a net loss of $195.4 million, lower than the $80 million profit posted in the previous corresponding period.
EBITDA (RC) came in at $304.9 million, 32.5% lower than the $451.7 million reported in the first half of FY24. This was driven by a 39.1% dip for the convenience and mobility business as well as an 83.6% drop for the energy and infrastructure business.
A fully-franked interim dividend of 2.83 cents was declared, lower than the 7 cents declared in the previous corresponding period and behind the expected 3 cents.
The context: The company previously warned that first-half convenience sales had slipped 10% as new packaging laws weighed on tobacco sales, which dipped 27%.
Viva's energy and infrastructure EBITDA came in at $18.4 million, much lower than the $112.4 million in the previous corresponding period. The Geelong Oil Refinery faced a one-off site-wide shutdown in January due to an external power outage, weak regional refining margins and high energy costs.
Viva's ultra-low sulphur gasoline project and turnaround of the residual catalytic cracking unit, both located at the Geelong refinery, are expected to be completed in early October, which the company said would conclude it's period of "heavy investment".
The convenience business is expected to "deliver a solid performance" in the second half of 2025 with an additional $35 million of synergies and cost-out initiatives expected.
The Geelong refinery also saw higher margins in July and is expected to post a small negative EBITDA in the third quarter of 2025 before benefiting from a stronger fourth quarter as the plant returns to full production.
