Vivo Energy to pour $150m capex into fuelling growth

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