Petrol supplier fires up, beats earning projection

HIGHER oil prices have helped Viva Energy, one of Australia’s biggest petrol suppliers, beat its earnings projections.

The oil refiner and service station owner and supplier has chalked up a first-half net profit of almost $140 million and beaten forecasts in the prospectus issued ahead of its float last month.

Viva owns or supplies about 1100 Shell, Liberty and Coles Express-branded petrol stations, while its refinery in Geelong, Victoria, is one of only four in Australia.

Swiss-based energy trader Vitol floated Viva on the Australian Securities last month, keeping a 45% stake in the group. Investors splashed $2.6 billion on the shares that were on offer, valuing the group at $4.9 billion – the biggest listing in Australia since the 2014 float of Medibank Private.

Viva’s historical cost profit, which accounts for the impact of movements in oil prices, was $144.6 million for the six months to June, surpassing the $112.3 million forecast in its prospectus.

Its revenue was $8.61 billion, also surpassing its forecast by $573.4 million.

The company’s service stations division reported underlying earnings – which excludes one-off items – of $308 million, passing the forecast by $9 million.

Viva’s business and industrial sales arm chalked up underlying earnings of $166 million to be in line with the group’s projection.

The performance of the refinery was affected by lower profit margins in June but had since recovered, the company said in a statement.

Its refining margin was $US7.30 a barrel, compared with the prospectus forecast of $US8.30 a barrel.

Shares in the group fell on the revelation, closing 2.1 per cent, or 5c, lower at $2.35. They are down 6 per cent on the $2.50 investors paid in the initial public offering.