Viva Energy has posted a three per cent rise in total group sales volume compared to the same period last year, increasing to 4.2 billion litres.
Convenience store sales, excluding tobacco, remained steady compared to the same period in 2023, with margins improving by 2.5 percentage points. However, tobacco sales continue to decline, contributing to a 7 per cent drop in overall convenience sales for the period.
In the commercial and industrial segment, sales grew by 3.7 per cent, driven by continued demand from key sectors such as defence, aviation, and Liberty Rural Group. Meanwhile, the convenience and mobility (C&M) segment saw fuel sales increase by 1.4 per cent, thanks to network expansion and improved trading conditions.
Despite a difficult refining environment, Viva Energy’s Geelong Refinery maintained a Geelong Refining Margin (GRM) of US$6.4 per barrel, processing 10.1 million barrels of crude oil. The company also expects to receive around AUD$24 million in support from the Federal Government’s Fuel Security Services Payment (FSSP), which would raise the GRM to levels above the EBITDA breakeven point.
In other developments, the Geelong Strategic Storage Facility was commissioned during the quarter, adding 90 million litres of storage capacity, while a new bitumen export line has been successfully completed, with the first delivery of locally produced bitumen to Sydney now underway.
Looking ahead, Viva Energy expects convenience and mobility earnings for the full year 2024 to be between $230 million and $260 million, impacted by softer retail conditions, lower tobacco sales, and higher overheads due to its ongoing transition.
However, the company remains optimistic about the future, citing upcoming cost reductions and earnings improvements from the integration of its Express and OTR businesses. The conversion of Express stores to the OTR format is progressing on schedule, with expectations of stronger sales growth in 2025.
While the refining market remains challenging, run cuts and maintenance in global refining capacity could help improve margins for the remainder of the year. Viva Energy also anticipates ongoing support from the FSSP to help stabilise its refining operations.
The company’s commercial and industrial segment is expected to continue performing well throughout the rest of 2024, in line with its performance during the first half of the year.
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