Australia's Viva Energy tanks 25% on weak results, forecast

Reuters
02-25
UPDATE 1-Australia's Viva Energy tanks 25% on weak results, forecast

Adds details on stock move, results and CEO, analyst comments from paragraphs 2 onwards

By Nikita Maria Jino

Feb 25 (Reuters) - Shares of Viva Energy Group VEA.AX tanked 25% on Tuesday, set for their worst day ever, as the Australian fuel retailer missed full-year profit expectations and signalled challenging trading conditions would weigh on first-half results.

The drop in the stock, which listed on July 2018, sent its price to a near four-year low and wiped out nearly A$1 billion ($635 million) of the firm's market capitalisation, which now stands at A$2.86 billion.

Viva Energy's underlying profit dropped 20% to A$254.2 million in 2024, missing a consensus estimate of A$260.6 million provided by Visible Alpha.

"Group performance was negatively impacted by lower demand within our convenience business due to cost-of-living pressures and illicit tobacco trade, coupled with high inflation lifting the cost of doing business," CEO Scott Wyatt said.

The company forecast combined earnings before interest, taxes, depreciation and amortization (EBITDA) from its convenience and commercial segments, which together account for over 90% of total EBITDA, of A$270 million to A$330 million for the first half of fiscal 2025.

That too is below analysts estimate of A$380 million, as per Visible Alpha.

Analysts at Jefferies said the results were "another disappointment, with material consensus estimate downgrades implied by commentary."

Viva's stock was last down 25.2% at A$1.79 and was the second-largest loser on the benchmark ASX 200 index .AXJO, which was down 0.6% as of 0441 GMT. ($1 = 1.5743 Australian dollars)

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Savio D'Souza)

((Nikita.Jino@thomsonreuters.com;))

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