Viva Energy has reported unaudited 1H26 Group EBITDA of approximately $770 to $780 million, more than doubling the $305 million achieved in the prior corresponding period. The result represents a substantial earnings inflection for the fuel and convenience retailer, driven primarily by elevated regional refining margins stemming from geopolitical disruptions to Middle Eastern oil supplies and reduced available refining capacity in the region.
The company’s Energy & Infrastructure segment is expected to deliver EBITDA of $353 million, reflecting materially elevated Geelong Refining Margins which reached US$21.1 per barrel on crude intake of 19.7 million barrels during the half. The strong margin environment was sufficiently robust that the company received no Fuel Security Service Payment in the half, as regional average margins remained above the A$15.9 per barrel trigger threshold. Management has indicated regional refining margins are expected to remain above long-term averages through the remainder of FY26, suggesting the current earnings uplift may extend beyond the current period.
The refinery operation was nonetheless disrupted by an alkylation unit fire on 15 April 2026, which impacted production. Following restart of the relevant catalytic cracking and conversion units in June, production has recovered to over 90 percent of normal capacity. Full operational recovery and the timing of return to historical run rates will be important to monitor, as any extended underutilisation could constrain the benefits from the elevated margin environment.
The Commercial and Industrial segment performed strongly, with sales volumes growing 1.0 percent to 5,865 million barrels in 1H26, supported by strength in the Resource sector and elevated Marine spot sales. The Convenience and Mobility segment proved less robust, with volumes declining 2.4 percent year-on-year to 2,625 million barrels. Convenience gross margin contracted by 34 basis points, though the outcome was substantially impacted by a $6 million inventory write-down recorded in the second quarter, with underlying margins holding broadly flat with the prior year period on an adjusted basis.
The balance sheet benefited materially from the strong operational performance, with net debt declining to $1.7 billion at 30 June 2026 from $2.1 billion at 31 December 2025. The improvement reflects robust conversion of the elevated earnings to cash, strengthening the company’s financial flexibility and positioning it well should the margin environment normalise from the elevated levels currently being experienced.
Investors should monitor the sustainability of regional refining margins as global supply chains stabilise and the geopolitical situation evolves. The recovery trajectory of the Geelong Refinery from the alkylation unit incident deserves close attention, particularly the timing of full operational recovery. Stabilisation and growth in convenience network volumes will also be critical, as these represent a core earnings stream beyond the cyclical benefits of elevated refining margins. This announcement has been identified as price sensitive and material by the ASX.
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About Viva Energy Group Limited (ASX: VEA)
Viva Energy Group Limited is an energy company operating in Australia, Singapore, and Papua New Guinea with three main business segments: Convenience & Mobility, which operates fuel and convenience retail under brands including Shell and Coles Express; Commercial & Industrial, which supplies fuel and lubricants; and Energy & Infrastructure, which includes refining and pipeline operations. The company is Australia’s second-largest vertically integrated refined transport fuel supplier with a significant refining operation in Geelong.
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