Viva Energy has reported strong fuel sales growth of +11% to 7,604ML y/y at its half year results ended 30 June 2023. Convenience & Mobility EBITDA increased +40% to $123.7M.
Viva Energy CEO and Managing Director Scott Wyatt says: “Viva Energy delivered a strong result in the first half, with sales from our Convenience & Mobility and Commercial & Industrial segments growing by 11% and earnings from these segments increasing by approximately 40% compared to the same period last year.
“We have now completed the transition of Coles Express and are working towards completing the acquisition of OTR Group by the end of this year. Together these acquisitions will see us become one of the leading convenience retailers in the country,” Mr Wyatt said.
“Our Commercial & Industrial businesses continue to deliver strong growth across all segments, with our specialty markets continuing to support sustained and attractive long-term growth. The contract with the Australian Defence Force was a particularly significant achievement and we look forward to supporting them to achieve their goals in the years ahead.
“Although the Energy and Infrastructure business was unfavourably impacted by extended major maintenance in the second quarter, refining margins have lifted considerably over recent months as a result of tightness in international markets, and we look forward to our refinery returning to full production at Geelong in September,” he said.
“I am pleased with our performance and the progress we are making on strategic priorities. Our continued capital discipline and strong balance sheet supports investments and acquisitions to deliver long-term growth. The continued strength and relative stability of C&M and C&I supports an interim dividend at the top end of our policy range.”
Convenience & Mobility (C&M)
C&M EBITDA (RC) was $123.7 million in 1H2023, a 40% increase on the same period last year supported by continued growth in fuel sales across all channels (up 4% to 2,268 million litres).
The company-operated network (previously operated by Coles Express) achieved weekly fuel volumes of 58 million litres, up 3% on the prior year, with further growth coming from the extension of the Liberty Convenience network (now at 95 stores nationally). Premium petrol penetration increased slightly from 30% to 31%.
“We made significant progress in pursuing our strategy to grow high-quality convenience earnings, completing the Coles Express acquisition to secure full control over more than 700 stores, and announcing the acquisition of OTR Group (subject to regulatory approval) which secures leading convenience and quick service restaurant capabilities (>70% of earnings from non-fuel retail). Together these acquisitions provide a pathway to becoming the leading convenience retailer in Australia,” Mr Wyatt said.
“The integration of Coles Express is progressing well, with approximately 6000 Coles Express team members joining the company and transitional services arrangements successfully implemented with Coles Group, ensuring the in-store experience and customer offer remains unchanged.” Convenience sales were $549 million in 1H2023, a 0.9% decline versus the prior year. Excluding tobacco, sales grew 8.7% with strong growth from food-to-go, snacks and beverage categories.
“We expect to complete the OTR acquisition in 2H2023, subject to regulatory approval, contributing to an earnings uplift from 2024,” he said.
