Vivo Energy Q3 profits hit by short-term supply disruptions

Vivo Energy on Thursday said third-quarter gross cash profit fell to $167m (£130m) from $171m a year earlier due to short-term supply disruptions in Kenya, Uganda and Ivory Coast.

The company, which distributes and markets Shell-branded fuels and lubricants in Africa, said the disruptions were “largely resolved”, adding that volume in the quarter was still 2% ahead of the preceding quarter, “mainly as a result of our continued network development activities”.

Total retail volumes were up 1% with overall Q3 volumes up 2% to 2.3bn. Vivo forecast growth of 4% for the full year.

Nine-month retail volume growth was up 3% year on year and Vivo said it was “confident in the growth potential within our markets with underlying demand trends remaining unchanged”.

“We now expect to exceed our target of opening 80 retail stations in 2018 and once we complete the restructured acquisition of over 225 retail stations from Engen in Q1 2019, we will have grown our retail network by over 15% from the beginning of 2018,” the company said.

Vivo has been looking to expand and develop its network of 1,800 filling stations.

“For 2018, we are on track to deliver another year of strong financial performance driven by overall volume growth of around 4% at a gross cash unit margin of around $73 per thousand litres.”

Chief executive Christian Chammas said the company continued to see strong underlying demand growth in its markets.

“With our differentiated business model and ongoing expansion of our retail network we are well placed to capitalise on this over the long term,” he said.

Vivo was created in 2011 as a partnership between energy trader Vitol Group and private equity firm Helios Investment.