Viva Energy, which supplies Shell petrol stations, has rejected repaying $21.8 million in JobKeeper subsidies received during the coronavirus pandemic.
Melbourne-based Viva, which paid out an interim dividend and top-brass bonuses, maintained repayment was unwarranted as jobs were kept and its bottom line had “caused considerable discomfort to our investors”.
That was despite the Australian Shareholders’ Association on Wednesday arguing that Viva’s results for last year were “not as bad financially as had been feared”.
“Is Viva going to pay [JobKeeper] back like many ASX companies have seen fit to do?” ASA monitor John Whittington asked at Viva’s annual general meeting.
It marks the latest debate about JobKeeper, which was designed to ensure employers did not lay off staff during the pandemic. Some entities such as testing outfit ALS are paying back the cash, others such as beef giant AACo have held on.
Viva swung to a $35.9 million loss in calendar 2020, calculated on its preferred “replacement cost” basis, from the year-earlier $136 million profit. Part of the hit last year came as fuel sales dropped amid lockdowns.
Chairman Robert Hill, a former defence and environment minister in the Howard government, said Viva had appreciated the JobKeeper support “received from the public through government to help us retain employment levels during the pandemic.”
That included buffering 700 jobs and associated employment at a Geelong refinery “while it was losing considerable sums of money”, he said.
“The money was spent to help us in that regard.”
Mr Hill, whose board fees remained flat at $400,000, conceded the final earnings result “may have been a better outcome than what it could have been”.
“But it was still an outcome that has caused considerable discomfort to our investors,” he said.
“In such circumstances, the view of the board is that the money has been expended for the purposes for which it was provided. And there isn’t an argument by which the company should now make a payment back of an equivalent sum.”
Viva did not pay a final dividend. But halfway through the year, on posting an interim $34.3 million underlying profit, it had shelled out an 0.8¢-a-share dividend.
Its accounts show the top brass were awarded bonuses in the year, including chief executive Scott Wyatt earning $157,500 in a short-term bonus and $737,000 in long-term equity incentive.
But the accounts say short-term bonuses were cut down as regional refining margins fell and the company took JobKeeper, and that the government subsidy was not included in calculations for a long-term bonus against an earnings target.
All resolutions on Wednesday received heavy levels of support at the AGM, held online because of COVID-19 fears, with board members even wearing masks.
Mr Hill again backed a federal fuel refining package revealed last week, that provides support to operators such as Viva. “This materially improves the outlook for refining which, in turn, gives us the confidence to commit to continued refining operations for at least the next six years,” he said.
Extracted from AFR