28th Jul 2020 10:11
(Alliance News) - Vivo Energy PLC on Tuesday reported a sharp drop in interim income, but said its results were "robust" considering the national lockdown put in place in South Africa during the period.
In the six months to June 30, Vivo - a downstream petroleum company which sells products from Royal Dutch Shell PLC and Engen Petroleum - saw its net income plunge to USD13 million from USD72 million the year before.
Diluted earnings per share fell to 1 US cent from 5 cents the year before.
"We are living in unprecedented times," Chief Executive Christian Chammas said.
He continued: "We entered the Covid-19 pandemic in a position of strength and ended the period cautiously optimistic, having seen a rebound in June in both volumes and margins from their April lows. We are a resilient business, our business model remains unchanged and we continue to position ourselves for future growth."
Interim revenue dropped 14% year on year to USD3.38 billion from USD3.90 billion.
Vivo's volumes in the first half dropped 7% to 4.6 million litres from 5.0 million litres.
"After a strong start to the year, volumes sold in the first half were lower than the previous period due to countries imposing significant mobility restrictions in late March and early April, including full lockdowns in some markets," Vivo said.
The Shell licensee continued: "As fuel is a critical resource, our retail sites remained open and we continued to supply our commercial customers, however, volumes fell in April by nearly 40% against the previous year, with certain countries seeing volumes fall by over 70%."
Vivo's Aviation and Retail fuels suffered the most, the company said, with LPG and mining experiencing resilient performance through the period.
"As we moved through May and June we saw a progressive easing of measures, and at period-end, all of the full lockdowns had been lifted, with countries keeping a range of lighter and targeted restrictions in place. As a result, in June, volumes were less than 5% lower than the previous year, albeit still well behind expectations," Vivo added.
Vivo has already cancelled its 2019 final dividend, but has vowed to restart shareholder distributions later in 2020.
Looking ahead, Vivo said: "While we are encouraged by the improvement in trading in June, and trading to date in July, and believe it may be sustained, we remain cautious. Increased infection rates may delay further relaxation of measures, or lead to targeted new measures in certain countries, with the potential knock-on impact on mobility.
"Given the ongoing level of uncertainty, the board does not yet believe it is appropriate to provide updated guidance."
Shares in Vivo Energy were 1.1% higher in London on Tuesday morning at 75.70 pence each. In Johannesburg, the shares were untraded having last closed at ZAR15.50.
By Paul McGowan; [email protected]
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