Viva Energy Group has outlined a three-horizon strategy focused on cementing its position as a leading integrated energy company in Australia. Management is particularly focused on securing long-term government support for domestic refining operations. At its 2026 Investor Day, the company signaled that it is in discussions with the Federal Government regarding a renewed fuel security arrangement beyond 2030, seeking to establish more durable earnings foundations for the Geelong Refinery.
The refinery currently benefits from the Fuel Security Services Payment, which was updated in March 2026 to better reflect the current cost of doing business. Management argues that with 80% of Australia’s fuel requirements imported and global refining capacity constrained by closures and geopolitical disruption, there is a compelling case for maintaining domestic refining capability. Near-term refining margins remain elevated at US$21.4 per barrel in the third quarter of 2026, though the company acknowledges that a longer-term structural decline in petrol demand from vehicle electrification poses earnings headwinds over the next decade.
Beyond the energy division, the company has largely completed the integration of its convenience retail operations under a unified platform, combining the previously separate Express, OTR and Liberty brands. The strategic goal is to unlock margin expansion and drive non-fuel earnings growth through disciplined execution. The company targets convenience sales growth of 2-3% above CPI through to 2030, with shop margins expanding to above 40%, supported by supply chain efficiency, private label product launches and range rationalization. A trial at a Brighton, South Australia store showed gross margin improvement of 500 basis points through product line reduction, suggesting meaningful opportunity across the store network.
From a capital allocation perspective, management has flagged a medium-term capex envelope of $350-450 million per annum from 2027 to 2029, with sustaining capital of $250-300 million focused on asset integrity and a growth allocation of $100-150 million directed toward retail conversions and commercial infrastructure. The company intends to maintain leverage at around 2.0 times Net Debt to EBITDA through the cycle, supporting a dividend payout ratio of 50-70% of normalized profits while retaining flexibility for discretionary investment.
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Become an AR or CARKey focus areas going forward will include progress on government negotiations regarding the post-2030 refining arrangement, which would establish greater earnings visibility for the E&I division, and execution of retail transformation initiatives to determine whether the company can achieve its targeted margin and sales growth in the Convenience and Mobility division. This announcement has been flagged 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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