Viva Energy Projects Earnings Dip Due to Retail Challenges

Highlights:

• FY24 Earnings Projection: Viva Energy Group Limited (ASX: VEA) forecasts EBITDA between $230 million and $260 million due to weaker retail conditions and rising operational costs.
• Store Conversion Progress: The company is on track with its transition of Coles Express stores to the On The Run (OTR) format, following the updated schedule announced in August 2024.
• Share Performance: At the time of writing, Viva Energy shares traded at $2.85, reflecting a decline of 6.7% amid concerns over the earnings forecast.

Earnings Forecast for FY24 Viva Energy Group Limited (ASX: VEA) has projected its earnings before interest, tax, depreciation, and amortization (EBITDA) to fall between $230 million and $260 million for FY24. This forecast reflects the impact of softer retail conditions, particularly declining tobacco sales and increasing operational costs, which have affected the company’s convenience and mobility segment.

Retail Format Transition Viva Energy is in the process of transitioning its Coles Express stores to the On The Run (OTR) format. The company has confirmed that the store conversion is progressing in line with the revised schedule announced in August 2024, maintaining confidence in the long-term prospects of the change.

Share Performance At the time of writing, Viva Energy shares last traded at $2.85, a decline of 6.7%, reflecting investor concerns over the lower earnings forecast.

Market Outlook Despite the short-term challenges in the retail sector, Viva Energy continues to focus on

its strategic transformation efforts and operational improvements. The company remains committed to driving growth through its mobility and convenience segments, while navigating headwinds posed by higher costs and a shifting retail landscape.

With this outlook, Viva Energy faces a critical period in which it must manage both internal transformations and external market challenges.

Stock Market Impact As of the latest update, the company's shares have fallen to $2.66, continuing to react to the broader market concerns and retail sector performance issues.

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