- Viva Energy’s sales volumes for the third quarter were 4,164 million litres, marking a 3% increase compared to the previous year.
- The Geelong Refining Margin per barrel decreased by 25% year over year, to $6.40 per barrel.
- Refining intake during the quarter amounted to 10.1 million barrels.
- The C&M EBITDA RC for FY2024 is projected to be between A$230 million and A$260 million, factoring in softer retail conditions, reduced tobacco sales, and increased overhead costs.
- The OTR business is experiencing more significant impacts from illicit tobacco affecting South Australia, as well as higher overhead costs, compared to the Express business.
- The transition of fuel supply to Viva Energy is scheduled for completion by the end of the first quarter of 2025. The cessation of transitional services from Coles Group is expected in the second quarter.
- Considerable cost reductions and improved earnings are expected from FY2025, with anticipated integration benefits from Express and OTR convenience stores.
- Annual savings are expected to exceed A$90 million over the next three years, up from previously guided A$60 million per annum.
- Conversion of Express stores to the OTR format is on track and is expected to bolster sales growth as retail conditions improve in FY2025.
- The C&I segment is expected to maintain a strong performance throughout the remainder of the year, consistent with the first half of 2024.
- The refining environment is anticipated to remain challenging for the rest of FY2024.
- Viva Energy expects to receive around A$24 million from the Federal Government’s Fuel Security Services Payment, helping to elevate GRM to above EBITDA RC breakeven levels.
- Support from the Federal Government in the third quarter is still subject to confirmation.
- Market sentiment is positive with 11 buy recommendations, 1 hold, and no sell recommendations on Viva Energy.
A look at Viva Energy Group Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 4 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
For Viva Energy Group, the long-term outlook appears mixed based on the Smartkarma Smart Scores analysis. With a score of 3 for Value and 4 for Dividend, the company shows promising signs in terms of its financial standing and return to investors. However, Viva Energy Group falls short in Growth and Resilience, with scores of 2 in both areas. This suggests challenges in expansion and potential vulnerabilities to market fluctuations or disruptions.
Despite these factors, Viva Energy Group’s Momentum score of 3 indicates a moderate level of market traction or investor interest. The company’s core business as a marketer of petroleum products catering to various industries in Australia provides a stable foundation. Investors may find Viva Energy Group appealing for its dividend potential and relative value, although considerations around growth opportunities and resilience may influence long-term investment decisions.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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