Half Year 2024 Viva Energy Group Ltd Earnings Call Transcript
Key Points
- Viva Energy Group Ltd (ASX:VEA) delivered a strong first-half performance, with sales and EBITDA growing by 6% and 25%, respectively.
- The company completed the acquisition of OTR Group and is making good progress on integrating it with other retail businesses, expecting to deliver $60 million-plus synergies over the next three years.
- The commercial and industrial business delivered another record result, with sales growing 9% year-on-year and EBITDA increasing by 3% to $238 million.
- The Geelong Refinery operated at near capacity during the first half of 2024, with a crude intake of 20.6 million barrels and an availability of 97%, generating an average margin of USD10.80 per barrel.
- The Board has determined to pay an interim dividend of $0.067 per share for the year, representing a 70% payout ratio of convenience and commercial businesses, reflecting their reliable earnings profiles and strong cash conversion.
- Cost of living pressures are weighing on consumer demand, with both fuel and convenience sales in the company-operated network declining by around 5% over the same period last year.
- Declining tobacco sales impacted the convenience business, with a 17% drop across the network.
- Higher finance costs primarily reflected higher borrowings in the period, with net debt increasing to $1.5 billion after taking up $1 billion of term debt to acquire OTR Group.
- The refining business faced challenges with an unplanned outage affecting feedstock supply to the polypropylene plant, impacting the gross refining margin.
- The bitumen business underperformed due to significantly lower road maintenance activity across the industry, contributing to higher freight costs.
Good morning, everybody, and thank you for joining us today to discuss Viva Energy's half-year '24 results. My name is Scott Wyatt, Chief Executive Officer of Viva Energy. And on the call with me today is Carolyn Pedic, our Chief Financial Officer; and Jevan Bouzo, our CEO of Convenience and Mobility.
I'll begin by acknowledging traditional owners of the lands on which we are collectively gathered for this call and pay my respects to elders' past, present, and emerging.
As always, let me start with our safety and environmental performance on slide 4, following the acquisitions of Coles Express and OTR Group, Viva Energy has grown from 1,700 to almost 15,000 employees, predominantly within the convenience business. This has substantially expanded the extent of our operating activities.
So we are adapting our safety management programs to reflect this change and apply these across the businesses that we've acquired. Personal safety performance remained stable with the Express
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