Viva Energy Group Limited (the Company) has released an operational update for the three months ended 30 September 2023 (3Q2023).
The Group delivered comparatively strong fuel sales during 3Q2023, up 4.7% over the same period last year and in line with sales achieved in the previous quarter this year. “This was a good performance in the context of rising oil prices and generally softer seasonal and economic conditions that persisted through the quarter”.
Fuel and convenience sales through the company-controlled network (previously Coles Express) were in line with sales achieved in 2Q2023. “While convenience sales declined by 2.5% versus the same period last year, gross margin improved by 1.5 percentage points to 33.7% due to continued growth in all categories excluding tobacco,” the company said. “The sharp rise in oil price, from US$75 per barrel to US$95 per barrel during the period, compressed retail fuel margins while these increased costs were progressively reflected in pump prices. Oil prices have since stabilised, which has in turn supported the recovery of retail fuel margins.”
Commercial & Industrial (C&I) continues to perform well with robust demand (up 8.2% on the same quarter last year) and sustained margins. “Most of the pricing structures in our Commercial and Industrial business provide for changes in oil price and exchange rate to be passed through to customers by way of formula pricing and regular updates in wholesale prices. Together with the diversity strength in this part of our business, this has supported continued strong returns through this period of heightened volatility,” the company said.
Refining margins strengthened through the period due to tight oil supply, general global demand strength, and lower stocks heading into the northern hemisphere winter. “This supported a GRM of US$8.50 per barrel despite curtailed production from extended major maintenance. Processing capability has been progressively restored, with focus now on normalising operations and reducing shipping and operating costs which were elevated through the maintenance period. Unaudited 3Q2023 Energy & Infrastructure (E&I) EBITDA (RC)5 is expected to be a loss of approximately $20 million net of anticipated insurance recoveries (in relation to the compressor incident announced in June 2023).”
