Vivo En­ergy to pour $150m capex into fu­elling growth

Pretoria News - - BR | NEWS - SANDILE MCHUNU [email protected]

VIVO En­ergy, the pan-African re­tailer and dis­trib­u­tor of Shell and En­gen­branded fu­els and lu­bri­cants, is plan­ning to spend be­tween $150 mil­lion (R2.32 bil­lion) and $160m in cap­i­tal ex­pen­di­ture in the year ahead to grow its busi­ness.

The group said this ex­pen­di­ture would sur­pass last year’s spend as it now wanted to grow its re­tail net­work across all 23 coun­tries it op­er­ates in.

Chief ex­ec­u­tive Chris­tian Cham­mas said the group had en­tered the year on good mo­men­tum and was look­ing ahead to an­other strong per­for­mance next year.

“We ex­pect to de­liver mid-sin­gle digit gross cash profit per­cent­age growth in 2020, driven by im­proved vol­ume growth in the Shell-branded mar­kets, or­ganic growth in the En­gen­branded mar­kets and two months of ad­di­tional En­gen con­tri­bu­tion in the first quar­ter due to the tim­ing of the En­gen trans­ac­tion in 2019, to­gether with broadly sta­ble gross cash unit mar­gins,” Cham­mas said.

The group has tar­geted be­tween 80 and 100 new sites for the year fol­low­ing the suc­cess­ful in­te­gra­tion of En­gen. Last year, Vivo En­ergy con­cluded a trans­ac­tion with En­gen Hold­ings to re­struc­ture the ac­qui­si­tion of En­gen In­ter­na­tional Hold­ings by is­su­ing 63.2 mil­lion new shares and $62.1m in cash.

The re­struc­tured trans­ac­tion added op­er­a­tions in eight new coun­tries and more than 225 En­gen-branded ser­vice sta­tions to Vivo En­ergy’s net­work, tak­ing its pres­ence to more than 2 000 ser­vice sta­tions across 23 African mar­kets.

Vivo En­ergy de­liv­ered an 8 per­cent in­crease in ad­justed earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (Ebitda) to $431m for the year to end De­cem­ber, boosted by an 11 per­cent in­crease in sales vol­umes to 10 417 mil­lion litres.

The group said its rev­enue surged 10 per­cent to $8.30bn.

It said ad­justed di­luted earn­ings per share, how­ever, de­clined 14 per­cent to 12 US cents a share.

The group more than dou­bled its fi­nal div­i­dend to 2.7c a share, from 1.3c com­pared to last year, tak­ing the full year div­i­dend to 3.8c.

Cham­mas said the group de­liv­ered an­other strong set of re­sults in 2019, with ad­justed Ebitda ris­ing by 8 per­cent to $431m as they build on the plat­form for fu­ture growth.

“In line with our ob­jec­tives, vol­umes rose 11 per­cent, driven by the smooth in­te­gra­tion of the new En­gen­branded mar­kets, which to­gether with gross cash unit mar­gins of $71 per thou­sand litres led to record gross cash profit of $743m,” Cham­mas said.

He added that these re­sults demon­strated the strength and re­silience of their busi­ness model and their dis­ci­plined ap­proach as they de­liv­ered strong ad­justed free cash flow in the year, and have rec­om­mended a fi­nal div­i­dend of 2.7c a share.

“We have built mo­men­tum into 2020 and are ex­cited about the 12 months ahead, as we look for­ward to de­liv­er­ing an­other year of strong growth,” he said.

Vivo En­ergy shares closed un­changed at R20.50 on the JSE yes­ter­day.


VIVO ERNEGY HAS de­liv­ered strong ad­justed free cash flow in the year, and rec­om­mended a fi­nal div­i­dend of 2.7 cents a share.

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