Vivo Energy reopens its pumps

print

Vivo Energy reopens its pumps

Published Date: 2020-07-29 | Source: Stephen Gunnion | Author: Stephen Gunnion

Vivo Energy reopens its pumps

The service station operator says fuel sales have rebounded following the easing of lockdown restrictions.

Vivo Energy says its retail business had a good start to the year, with strong growth in the markets where it operates Shell service stations in January and February. That was before Covid-19 restrictions on movement led to significantly lower demand from late March. Its non-fuel retail business also felt the knock-on impact of lower traffic at its sites and shorter operating hours.

Vivo sells and markets fuels and lubricants across the continent. A year ago, it added 230 Engen-branded service stations in eight countries to its continent-wide Shell network, taking its total count to more than 2,000 garages in 23 countries. It markets aviation fuels under the Vitol Aviation brand.

Volumes fell 7% in the six months to end-June due to fewer motorists stopping at its garages. However, as restrictions were progressively eased in May and June it recorded strong month-on-month improvements in volumes and profitability. Still, revenue declined by 14% to $3.38 billion for the six months and gross profit fell 15% to $300 million due to the impact of Covid-19 on volumes and profit margins. Net income sank 82% to $13 million and earnings per share fell 80% to 1c.

Despite lockdown and curfew restrictions, Vivo said it had continued to expand its network, opening a net 30 new retail sites. It was also finalising several agreements to acquire small dealer networks, which it said should benefit its performance in the second half of the year. It also continued to develop its quick-service restaurant business by agreeing to form a joint venture with KFC in Namibia, its sixth country.

Vivo said the near-term impact of Covid-19 on its business remained unclear as it was likely that case numbers in African countries would rise over the coming months, which may lead to further restrictions on mobility. However, it said the long-term macroeconomic growth drivers on the continent remained unchanged and that its markets were resilient having already experienced major health crises such as HIV and Ebola.

Vivo's shares rose 1.6% to R15.75 in thin trade yesterday.





Similar Stories