This article is from the Australian Property Journal archive
COST of living pressures and the illegal tobacco trade are dragging down consumer spending at Viva Energy’s fuel and convenience centres, while it is continuing its rollout and expansion of its recently acquired On the Run (OTR) chain.
Viva completed its $1.2 billion acquisition of South Australian chain OTR this year in a deal that would see its network of stations increase by 205 locations, as well as the rebadging of hundreds Coles Express stores around the country.
Viva recorded a first-half increase in EBITDA of 24.8% compared to 1H23, to $451.7 million. Net profit after tax lifted 10.3% to $192.1 million, but the 6.7c per share dividend was 21.2% lower than the previous year’s 8.5c.
“Cost of living pressures and illegal tobacco trade are having an impact on consumer demand within our convenience businesses, at the same time that wage and cost inflation are driving up the cost of doing business across all our business units,” said Viva Energy CEO and managing director Scott Wyatt.
The convenience and mobility segment saw soft numbers: fuel sales volumes were down 0.9%, convenience sales by 1.4% and EBITDA by 1.3%.
“We expect the consumer market to remain challenging through the remainder of 2024, but have made good progress integrating our retail businesses and will pursue cost and earnings improvements as a priority over the next 18 months.”
“We remain focussed on extending the leading OTR convenience offer across the Express network which will commence in scale from 2025.”
However, the commercial and industrial segment posted record first-half results. Fuel sales volumes were up 8.7% and EBITDA lifted 2.9%, to $237.9 million.
A strong production performance at its Geelong refinery was a key driver of earnings growth. Refining take was up 27.2% and EBITDA by 390.8%, to $112.4 million.
