Vivo Energy plc (LON:VVO), the pan-African retailer and marketer of Shell and Engen-branded fuels and lubricants, provides the following trading update ahead of its Annual General Meeting being held later today in London.
The Group had a positive start to 2019 with performance in line with expectations.
Q1 volumes of 2,441 million litres were 7% higher year-on-year, with volume growth resulting from good underlying growth in Vivo Energy’s existing fifteen Shell-branded markets and one month of contribution from the eight new Engen-branded markets and the additional sites in Kenya. In March, the one month of the new combined Group, volumes were 13% higher year-on-year than Vivo Energy’s standalone performance the previous year. With the full contribution from the new markets for the rest of 2019, we expect volume growth to be in line with full year guidance of low to mid double-digit percentage growth.
Gross cash unit margin of $69 per thousand litres in Q1 was in line with full year guidance of high sixties per thousand litres (Q1 2018: $74 per thousand litres), with Retail unit margins having stabilised in the quarter due to an improvement in market conditions in our deregulated markets. Commercial unit margin benefited from good performance in the LPG and Marine businesses, and Lubricants margins began to recover in Q1, primarily due to the impact of pricing improvements in retail lubricants, which started in 2018.
Commenting on the trading update, Christian Chammas, Vivo Energy CEO said, “We are pleased to have delivered a strong start in Q1 2019, in line with our expectations, and in what is traditionally the slowest quarter of the year. We have moved quickly to integrate the new Engen businesses into Vivo Energy and are very excited about the opportunities that we see ahead of us in the new markets. We now operate in a diverse portfolio of 23 high growth markets across Africa and are uniquely positioned to continue to deliver growth across our business.”