Viva Energy has reported its best three-month sales result since before COVID-19, as the company profits from the end of lockdowns.
The result extends a period of strength for Viva. It reported record half-year profits in August.
Viva said sales volumes for the three months ending September 30 totalled 3.65 billion litres, up nearly 20 per cent from the same period a year earlier and up 3.3 per cent from the previous three months.
Viva also reported continued strength in its refining business, with refining margins totalling US0.13 cents, up more than 136 per cent from the same three-month period in 2021.
However, Viva said refinery margins were hit by about $US5/BBL in August after an outage of the catalytic cracking unit, which also caused higher operating costs for the month. The unit returned to full operation at the beginning of September.
Still, Viva continues to profit from the global energy crunch. In August, it reported earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months ending June 30 at a record $611.7 million, a rise of 139 per cent on the same period a year earlier. Net profit was $127 million, up 27 per cent from a year ago when the retail business weighed on earnings.
Viva’s future was only secured last May when the federal government said it would pay Ampol and Viva Energy to keep producing amid heightened fears about Australia’s energy security as they struggled against larger Asian refineries and COVID-19 lockdowns.
Australia’s refining capacity has been falling for more than a decade and the pandemic worsened the situation. It severely reduced the demand for jet fuel, cut the use of petrol and diesel, and drove down refining margins.
The scheme pays Ampol and Viva Energy when refining margins are weak, and the subsidies aided both in the short term before a rapid turnaround in the market made them ineligible.
While profiting from demand for traditional fossil fuels, Viva is also positioning itself for the move to zero-emission technology.
In September, Viva said it would take full control of the Coles Express fuel and convenience retailing network and start offering customers lower-carbon energy products.
The deal would allow Viva to consider investments in the network for electric vehicle charging and hydrogen refuelling to suit consumers’ changing needs, Viva chief executive Scott Wyatt said.
Coles Express has until now been operated under an alliance between Viva and Coles, but has been restructured over the years to increase Viva’s influence.
Extracted from AFR