Viva Energy’s EBITDA Falls 32.5% as Convenience & Mobility Rebounds Strongly
Viva Energy’s half-year results reveal strong momentum in its Convenience & Mobility segment and ongoing refinery enhancements, despite a challenging start to 2025. The Group’s strategic acquisitions and store expansions underpin a cautiously optimistic outlook.
- Convenience & Mobility EBITDA rebounds to $46.4 million in Q2 after weak Q1
- 15 OTR stores now open, with plans for 25 more in Q4 and extensive network conversions
- Geelong Refinery upgrades nearing completion, expected to boost refining margins
- Group EBITDA down 32.5% to $451.7 million, NPAT falls 48% to $62.6 million
- Interim dividend declared at 2.83 cents per share, with gearing at peak levels
Strategic Retail Expansion Gains Traction
Viva Energy Group’s half-year financial results for the period ending 30 June 2025 highlight a company in transition, balancing the challenges of a soft start to the year with promising signs of recovery and growth. The Convenience & Mobility segment, which includes the recently acquired Liberty Convenience and OTR Group, showed a marked turnaround in the second quarter, delivering $46.4 million in EBITDA after a subdued first quarter impacted by lower sales and fuel margins.
The Group’s retail footprint continues to expand aggressively, with 15 OTR stores now trading well and plans to open 25 additional stores in the final quarter of 2025. Viva Energy is also progressing a multi-year program to convert half of the Reddy Express network by 2028, signaling a long-term commitment to strengthening its convenience retail presence.
Refinery Upgrades Set to Enhance Margins
On the refining front, Viva Energy’s Geelong Refinery is undergoing significant upgrades, including the installation of Ultra-Low Sulphur Gasoline processing capability and a major turnaround of the residual catalytic cracking unit. These projects are expected to be completed by early October, positioning the refinery to benefit from stronger regional refining margins moving forward. While the refinery posted a small negative EBITDA in the third quarter due to maintenance-related downtime, management anticipates a rebound in the fourth quarter as full production resumes.
Despite the refinery’s challenges, the Group’s Commercial & Industrial segment maintained steady performance, delivering $237.9 million in EBITDA, supported by expansion into new markets such as Brisbane’s marine fuel oil sector and growth in aviation fuel supply.
Financial Performance and Capital Management
Overall, Viva Energy reported a 32.5% decline in EBITDA to $451.7 million and a 48% drop in net profit after tax to $62.6 million compared to the prior corresponding period. The decline reflects the combined effects of lower refining margins, integration costs, and a challenging retail environment influenced by factors such as illicit tobacco trade impacting convenience sales.
The company declared a fully-franked interim dividend of 2.83 cents per share, reflecting a 50% payout ratio of NPAT from the Convenience & Mobility and Commercial & Industrial businesses. Net debt increased to $1.95 billion, driven by acquisitions, capital expenditure, and dividend payments, pushing gearing slightly above target levels. Management emphasized a focus on reducing leverage by the end of FY2027 as capital investments wind down and operational efficiencies take hold.
Outlook, Building Momentum Amid Transition
Looking ahead, Viva Energy is optimistic about sustaining growth in its Convenience business, with further cost synergies and operational improvements expected in the second half of 2025. The Commercial & Industrial segment is forecast to remain resilient, while the refinery’s upgraded capabilities should support margin recovery despite the short-term impact of maintenance shutdowns.
CEO Scott Wyatt underscored the company’s progress in integrating acquisitions and expanding its retail network, expressing confidence that Viva Energy is on track to emerge from its transition phase with solid momentum heading into 2026.
Bottom Line?
Viva Energy’s strategic retail expansion and refinery upgrades set the stage for renewed growth, but execution risks and market pressures remain key watchpoints.
Questions in the middle?
- How will illicit tobacco trade continue to impact convenience sales and margins?
- What are the risks and potential delays associated with refinery turnaround projects?
- How quickly can Viva Energy reduce gearing to its target range amid ongoing capital expenditure?
