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Highlights:
- Profit Falls 20%: Net profit dropped to $254.2 million, driven by weaker convenience sales.
- Dividend Cut by 32%: Full-year dividend reduced to 10.6 cents per share.
- Stock Down 45.2% YoY: Shares plunged 23.5% in a single day, reflecting investor concerns.
Shares of Viva Energy (ASX:VEA) plummeted 23.54% to $1.83 in early trading after the fuel distributor reported a 20% drop in full-year net profit. The sharp decline reflects ongoing pressures in the company’s convenience business, exacerbated by cost-of-living impacts and the rise of illicit tobacco trade.
The stock has now fallen 45.2% over the past 12 months, making it one of the worst performers in the sector.
Financial Performance
Viva Energy posted a net profit of $254.2 million, down from last year’s result, as certain segments of the business struggled to maintain momentum:
- Full-Year Dividend: 10.6 cents per share (down 32% from 15.6 cents)
- Total Fuel Sales: 16.8 billion litres (up 3.7% year on year)
- Convenience & Mobility (C&M) Fuel Sales: Up just 0.5%, dragged down by falling demand and rising inflation
The company’s commercial business performed well, boosting overall fuel sales, but the convenience division lagged as consumers cut back on spending and illegal tobacco sales siphoned revenue from Viva’s Smokemart & GiftBox stores and OTR-branded network.
Market Pressures and Government Support
In addition to weaker consumer demand, regional refining margins declined in the second half of 2024, prompting federal government support to stabilize the business.
The illicit tobacco trade — which expanded into South Australia over the year — disproportionately impacted Viva’s convenience outlets, compounding existing challenges.
Path to Recovery and Outlook
Despite near-term hurdles, Viva remains cautiously optimistic. CEO Scott Wyatt highlighted that the company's commercial and industrial businesses are holding up well, and refining margins are beginning to show signs of recovery amid ongoing global volatility.
“While trading conditions remain challenging, we expect synergies, cost reductions, and easing inflation to drive earnings growth in the second half of the year,” Wyatt said.
Viva is also banking on store conversions and network optimizations to deliver growth into 2026, as it works to rebuild momentum in its convenience and mobility division.
