Retail Fuel Competition Still Dogs Viva Energy
Despite higher refining margins, the focus is on Viva Energy’s retail fuel offering, which is likely to remain pressured by competition.
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News
Viva Squeezed By Higher Energy Prices
Oil refiner and retailer Viva Energy has been bitten by rising global oil prices - not only have earnings taken a $35 million because of the sharp rise in oil prices so far this year but that it expects more pain to come.
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Analyst Views
VEA – UBS rates the stock as Buy
Viva Energy's Sep Q update revealed refiner margins ahead of forecasts but retail margins remaining soft. This comes out as a net positive, with UBS suggesting 9% upside to consensus forecasts on better refiner margins with some offset from weak retail.
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VEA – Morgans rates the stock as Hold
Viva Energy Group's first-half result met June guidance and Morgans' forecasts as tough operating conditions persisted across retail, refining, and commercial.
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VEA – Deutsche Bank rates the stock as Buy
Viva's update confirmed refinery earnings are even worse than the broker had feared, but there are signs of strength in Fuels & Marketing relative to the weak update provided by Caltex ((CTX)) last week. The broker doesn't believe refining margins can get much worse, and retail margins are showing signs of improvement.
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VEA – Morgans rates the stock as Add
The company reported an improved gross refining margin in March of US$6.50 a barrel. Crude intake was also higher in March. Morgans notes the rise in oil prices has hurt retail fuel margins.
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VEA – Deutsche Bank rates the stock as Buy
Refining is behind the company's downgrade to estimates, although Deutsche Bank suggests this should be largely cyclical. The drag from declining Coles volumes is small in comparison but remains more important in the long-term.
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