Viva Energy Group Ltd
ASX:VEA
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Viva Energy Group Ltd
Viva Energy Group Ltd stands as a formidable presence in the Australian energy landscape, with roots extending deep into the country's petroleum sector. Born from the acquisition of Shell's Australian downstream operations, the company has established itself as a leading energy provider underpinned by a robust infrastructure network and a well-distributed array of retail service stations. Viva Energy operates the iconic Geelong Refinery, a pivotal asset that processes crude oil into a suite of essential petroleum products, from petrol and diesel to jet fuel and bitumen. This refinery not only fulfills a substantial portion of domestic fuel needs but also serves as a linchpin in their integrated supply chain, ensuring that Viva remains a key player in Australia's energy supply equation.
Central to Viva Energy's business model is its extensive retail footprint, which includes a partnership with Coles Express. This collaboration helps to cement its retail presence through co-branded service stations, providing fuel and convenience goods to millions of customers annually. By strategically aligning with one of Australia's largest supermarkets, Viva amplifies its reach and consumer engagement. Additionally, its corporate and commercial fuel sales generate significant revenue through agreements with aviation, marine, transport, and mining sectors, ensuring diversified income streams. Viva Energy’s emphasis on efficiency and innovation in supply chain management and refining processes further fortifies its market position, continuously adapting to the evolving energy demands and sustainability challenges of the modern era.
Viva Energy Group Ltd stands as a formidable presence in the Australian energy landscape, with roots extending deep into the country's petroleum sector. Born from the acquisition of Shell's Australian downstream operations, the company has established itself as a leading energy provider underpinned by a robust infrastructure network and a well-distributed array of retail service stations. Viva Energy operates the iconic Geelong Refinery, a pivotal asset that processes crude oil into a suite of essential petroleum products, from petrol and diesel to jet fuel and bitumen. This refinery not only fulfills a substantial portion of domestic fuel needs but also serves as a linchpin in their integrated supply chain, ensuring that Viva remains a key player in Australia's energy supply equation.
Central to Viva Energy's business model is its extensive retail footprint, which includes a partnership with Coles Express. This collaboration helps to cement its retail presence through co-branded service stations, providing fuel and convenience goods to millions of customers annually. By strategically aligning with one of Australia's largest supermarkets, Viva amplifies its reach and consumer engagement. Additionally, its corporate and commercial fuel sales generate significant revenue through agreements with aviation, marine, transport, and mining sectors, ensuring diversified income streams. Viva Energy’s emphasis on efficiency and innovation in supply chain management and refining processes further fortifies its market position, continuously adapting to the evolving energy demands and sustainability challenges of the modern era.
EBITDA: Viva Energy reported first-half EBITDA of $305 million, slightly above guidance provided in July.
Retail Transition: The heavy integration phase of retail acquisitions (Coles Express, OTR, Liberty) is largely complete, with a major focus now on accelerating store conversions and driving operational improvement.
OTR Store Rollout: The company expects to convert about 40 sites to OTR format in 2025, with capability building for 20–25 conversions per quarter in the future.
Synergy & Cost Out: On track to deliver $65 million in retail synergy and cost-out improvements in 2025, with $15 million realized in H1 and $50 million expected in H2. Group-wide, about $80 million in synergies/cost-out targeted for the year.
CapEx & Gearing: Peak capital expenditure ($225 million in H1) is ending; gearing is temporarily elevated (3.2x net debt to EBITDA), but expected to reduce as investment moderates and earnings grow.
Dividend: Declared an interim fully franked dividend of $0.028 per share, with a 50% payout ratio for core segments.
Convenience Headwinds: Retail and convenience sales were pressured by illicit tobacco and transition-related disruptions, but management expects improvement as conversions and supply chain projects progress.
Refining & Commercial: Commercial and industrial EBITDA held steady at $238 million; refining margins were weak for much of H1 but improved more recently, with a stronger Q4 anticipated.
