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Highlights
- Viva Energy’s shares drop 2.8% to AU$2.75, marking the largest intraday fall since December 19.
- The fuel retailer revises its convenience and mobility EBITDA forecast, now expecting it to hit the lower end of its FY24 guidance range.
- FY24 unaudited Group EBITDA is forecasted to increase, despite challenges including a AU$20 million loss from a recent refinery power outage.
Shares of Viva Energy Group (ASX:VEA) fell by 2.8% to AU$2.75 on Monday, marking the largest intraday percentage drop since December 19. This decline came as the fuel retailer adjusted its earnings expectations, particularly within its convenience and mobility (C&I) segment, which is now expected to land near the lower end of its FY24 guidance range.
Viva Energy has revised its C&I EBITDA forecast for FY24, with an anticipated result between AU$230 million ($144.16 million) and AU$260 million. While this marks a slight downward revision, it suggests a weaker-than-expected performance in this area compared to earlier expectations.
Despite the C&I setback, Viva Energy’s overall unaudited Group EBITDA for FY24 is projected to rise to AU$750 million, a solid increase from the AU$712.8 million recorded in FY23. This growth is a positive sign, even as challenges such as a power outage at the company’s Geelong Refinery earlier this month are expected to negatively impact its bottom line. The outage is estimated to result in a AU$20 million loss.
In terms of sales volumes, Viva Energy reported 4Q group sales of 4.36 billion liters, a slight increase from 4.32 billion liters in the same quarter last year. However, the company also noted a decline in its Geelong Refining Margin, which dropped to $6.7 per barrel, about 24% lower than the previous year. This reduction in refining margin further highlights the challenges facing the company in an increasingly volatile market.
Despite these concerns, Viva Energy’s stock has performed positively over the course of the year, with shares up by 3.8% as of the last close. However, the combination of weaker-than-expected earnings in its C&I division, the impact from the refinery outage, and the margin compression has raised concerns among investors, leading to the decline in its share price.
