Viva Energy Shares Tumble on Weaker Earnings Outlook

Highlights:

• Viva Energy Group Limited (ASX: VEA) shares fell 5.94% to $2.06 at the time of writing after warning of weaker earnings.
• Retail sales dropped 10%, with tobacco sales plunging 27% due to packaging laws and illicit trade.
• Refining margins remain under pressure, adding to the company’s earnings concerns.

Viva Energy Group Limited (ASX: VEA) saw its shares drop significantly after the company flagged a substantial decline in earnings due to weak convenience sales and falling refining margins. At the time of writing, the company’s share price had fallen by 5.94% to trade at $2.06.

Retail Sales Under Pressure

The energy giant reported a sharp 10% decline in overall retail sales, with tobacco sales plummeting by 27%. This steep drop has been attributed to the impact of recently introduced tobacco packaging regulations and the growing influence of illicit trade in the sector. The company noted that the tobacco category remains a critical revenue contributor in convenience sales, and the slump has significantly affected overall performance.

Refining Margins Remain a Concern

In addition to retail challenges, Viva Energy Group Limited also highlighted margin compression in its refining operations. Lower global fuel demand and increased competition have put pressure on margins, which further contributed to the company’s weaker-than-expected earnings guidance. Management has indicated that macroeconomic conditions and regulatory shifts are likely to remain key headwinds in the coming quarters.

Market Reaction and Outlook

Investors responded swiftly to the news, pushing the company’s share price down 8.2% earlier in the day before it steadied at a 5.94% loss. Analysts are closely watching how Viva Energy adjusts its strategy in the face of these mounting pressures. While the company remains a major player in Australia’s fuel and convenience retail landscape, near-term earnings may continue to feel the squeeze. The company is expected to provide further details on its performance and future outlook in its upcoming financial report.

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