Vivo Energy reports a 6% increase in gross profit for the first quarter
DURBAN - Vivo Energy plc share price rose by more than 8 percent on the JSE after the leading pan-African distributor and retailer of Shell and Engen-branded fuels and lubricants reported a 6 percent increase in gross profit to $179 million (R3.24 billion) for the first quarter to end March.
The share price climbed to R18.49 a share in the morning, up from Wednesday’s closing price of R17.
The group said its gross cash profit increased by 20 percent in January and February but the March performance was affected by Covid-19 related measures which reduced the demand.
Its volumes increased by 7 percent to 2 602 million litres during the quarter, with the group benefiting from two months of additional Engen contribution and improved Shell-branded Retail performance, before the government restrictions were imposed.
Chief executive Christian Chammas said the group achieved a strong start to the year before the Covid-19 related restrictions on movement imposed in March created as significant and ongoing reductions in demand.
“We have responded rapidly to the challenges raised by Covid-19 to protect our people and customers, our communities and our business, and with our robust balance sheet and access to liquidity we have a strong base to navigate through these uncertain times,” Chammas said.
The group reported $1.6bn available liquidity position at the end of the quarter.
Looking ahead, the group said it withdrew guidance for the year at the end of March in light of the uncertainty arising from Covid-19 and the actions taken by host governments to stem the spread of the virus.
“Until there is further clarity over the length of the restrictions on movement in our countries of operations, the board does not believe it is appropriate to provide updated guidance,” the group said.
It added that given the current impact on fuel volumes and uncertainty as to how long this will continue, the board has decided to act prudently to withdraw its recommendation to pay a final dividend.
Vivo Energy will hold its annual general meeting (AGM) on May 20.
BUSINESS REPORT ONLINE