Vivo Energy expecting its sales volumes to grow
This comes after the group reported a 15percent increase in sales volumes for the third quarter to end September, driven by the contribution of Engen-branded markets.
The group said on Friday that year-to-date group volume growth increased to 10percent compared to the same period last year and it continued to expect volume growth for the full year, including the Engen-branded markets, to be within its guidance range of low to mid double-digit percentage growth.
Its gross cash profit was up by 13percent to $189million (R2.76billion) year-on-year and up 4percent quarter-on-quarter, driven by higher volumes and stable margins.
Chief executive Christian Chammas said they were pleased to have delivered another record quarter, with gross cash profit increasing by 13 percent year-on-year to $189m.
“This was a result of stable margins in the Shell-branded markets and strong volume growth of 15 percent year-on-year, primarily driven by the Engen-branded markets.
"The successful integration of the Engen transaction, and the completion of the roll-out of the ERP1 system across all 15 Shell-branded markets demonstrate the capability of our teams and we are well on-track to deliver against our expectations for the full year,” Chammas said.
The third quarter volumes of 2672million litres were 15percent higher year-on-year, primarily driven by both the new contribution and strong commercial performance in the Engen-branded markets.
The group said gross cash unit margin of $71 per thousand litres in the quarter was slightly ahead of the first half of 2019, driven by improved margins in the Shell-branded markets and broadly in-line with the previous year period.
Its volumes in Shell-branded markets grew by 1percent, with the group stating that the focus remains on driving gross cash profit growth by balancing volume growth with strong margins. “As a result, Shell-branded margins were slightly ahead of the first half of 2019, driven by improved retail margins and the decision to reduce the low margin commercial reseller business in certain markets in the second quarter."
Vivo Energy said a number of initiatives were under way to drive retail volume growth and they remained on track to achieve its target of opening a net total of between 80 and 100 sites this year.
The group operates and markets its products in countries across north, west, east and southern Africa and it has a network of more than 2100 service stations in 23 countries operating under the Shell and Engen brands and exports lubricants.