Viva Energy has announced the Group’s financial results for the full year ended 31 December 2024, reporting a 5% increase in EBITDA (RC) to $748.6 million.
According to Viva Energy CEO and Managing Director Scott Wyatt, this was driven by strong sales growth in the company’s commercial business and higher crude intake due to lower levels of maintenance and improved operating performance in its Refinery.
“Group performance was negatively impacted by lower demand within our convenience business due to cost-of-living pressures and illicit tobacco trade, coupled with high inflation lifting the cost of doing business,” he says.
“Regional refining margins also declined in the second half of the year, triggering federal government support in the third quarter.
“Notwithstanding these challenges, I am pleased with progress we have made on transforming our business over the last year.
“Since completing the acquisition of OTR Group, we have begun consolidating our retail operations and are standing up retail systems which in turn will allow us to improve efficiencies and begin to drive down operating and overhead costs over the next two years.
“When completed, we expect to capture approximately $90 million of synergies, with substantial buying power supporting a more compelling convenience offer under the OTR brand.
“Early results from conversion of Express to OTR are delivering strong sales and earnings uplift, with 40 to 60 stores expected to be converted or opened in the year ahead.
“Given the macro-economic headwinds facing parts of our business, we are accelerating programs to capture synergies of $30 million within our C&M [convenience and mobility] business and deliver cost reductions of $50 million across the Group in 2025, weighted towards the second half of the year.
“Although trading conditions remain challenging for the C&M business, we expect synergies, overhead cost reductions, and a lower inflation environment to drive earnings growth in the second half of the year with store conversions increasingly driving growth into 2026. Our commercial and industrial business continues to perform well, and regional refining margins are beginning to find some strength amidst a volatile geopolitical backdrop.”
Convenience and mobility
C&M EBITDA (RC) was $231.2 million in 2024, broadly in line with 2023.
Fuel sales volumes in the company operated network were 5062ML, up 0.5% on a pro forma basis.
Liberty Convenience (LOC) grew sales by 9%, which Viva Energy says was driven by network growth, a skew towards regional locations and its discount proposition.
Excluding tobacco, convenience and QSR sales increased 2% in the year, comprising growth from OTR and flat sales in the Express business. Including tobacco, convenience sales declined 4%. The mix shift from lower tobacco sales and OTR’s higher margin contribution lifted convenience gross margin to 38.8% in 2024, according to Viva Energy.
In the second half of 2024, Viva Energy converted the first four Express stores to the OTR offer at an average investment of approximately $1.6 million per store, including upgrades to fuel equipment and forecourts. Initial results have been positive, says Viva Energy.
Viva Energy expects to add between 40 and 60 OTR stores to the network through conversions and pipeline sites in 2025, building capability to support conversions of approximately 100 stores per annum.
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