Viva Energy Reshapes Strategy as Capex Winds Down, Eyes Optimisation in ASX200 Space

May 06, 2025 10:25 AM AEST | By Team Kalkine Media

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Viva Energy Reshapes Strategy as Capex Winds Down, Eyes Optimisation in ASX200 Space — Image source: shutterstock

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Highlights

Viva Energy to scale back refining capex from 2026

Q1 retail fuel margins improve; commercial fuel sales dip

Major investment cycle nearing completion

Viva Energy (ASX:VEA), a prominent name among the ASX200 constituents, has signaled a strategic shift as it nears the end of a significant investment cycle. In its latest update, the company outlined a plan to scale back refining-related capital expenditure by 2026, indicating a transition from high investment to optimisation of its core operations. ASX200

In the first quarter, Viva Energy’s trading performance aligned with expectations, buoyed by stronger retail fuel margins. However, the company experienced a 6% drop in commercial fuel sales, attributed primarily to unfavourable weather events that impacted broader logistics and demand.

The easing of major capex pressures is seen as a pivotal moment for Viva Energy. According to the company, the phase of high investment—particularly in refining infrastructure—is concluding. Moving forward, efforts will be centred on driving greater efficiencies and returns from its existing refining assets. This includes maintaining operational reliability while ensuring capital is allocated prudently.

Retail operations remained a strong point for the company during the quarter, benefiting from improved fuel margins. This performance has helped cushion the impact of lower commercial fuel volumes, reflecting the diversified nature of Viva Energy’s portfolio.

In recent years, the company invested heavily in both refining upgrades and broader infrastructure enhancements. With these projects approaching completion, stakeholders are closely watching how the reduced capital intensity may impact cash flows and future financial metrics.

This strategic realignment could potentially enhance Viva Energy’s standing among ASX dividend stocks, particularly as it enters a lower-capex phase. For income-focused market participants tracking dividend-paying companies in Australia, the shift might signal stronger future distributions, depending on profitability and retained earnings.

Being a part of the ASX200, Viva Energy remains a key player to monitor as broader energy markets evolve. Its current focus on extracting more value from existing operations, rather than expanding aggressively, highlights a maturing phase in its corporate lifecycle.

As the company steps into this next chapter, the coming quarters will reveal how effectively it can balance operational efficiency with ongoing market dynamics—especially in a sector that continues to face macroeconomic and environmental pressures.

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