Service station and oil refinery operator Viva Energy Australia has forecast an increase in earnings before interest, tax, depreciation and amortisation (EBITDA) on a replacement cost (RC) for the 2024 financial year (FY24).
Viva Energy said EBITDA was expected to be about $750 million in the 12 months to 31 December 2024, compared with $712.8 million in FY23, which implies growth of 5.2%.
The company, which operates Shell-branded service stations and owns and operates the Geelong oil refinery in Victoria, said solid growth from its Commercial and Industrial business had offset challenging retail and refining conditions.
Viva said EBITDA from its Convenience and Mobility business was expected to be near the bottom of its $230 million to $260 million guidance range, with retail fuel margins lower than a year ago and illicit tobacco affecting the OTR and Reddy Express businesses.
Sales volumes grew 0.8% to 4.4 billion litres (BL) in 2024, C&I quarterly sales were a record 3 BL, C&M fuel sales rose 2.0%, convenience and quick-service restaurant sales (excluding tobacco) were broadly flat but an improved gross margin (40.4%) largely offset the margin impact of lower tobacco sales.
Viva (ASX: VEA) shares closed flat last Friday at $2.73, capitalising the company at $4.35 billion.
RC is calculated on the basis of theoretical new purchases of inventory instead of historical cost of inventory, which removes the effect of timing differences and the impact of movements in the oil price.