Vivo steps up its retail fuel rollout in Africa

Vivo Energy, owner of the Shell and Engen brands in 23 African countries, is rolling out new petrol stations at an accelerated rate to grow on the continent.

The group, listed in Johannesburg but with no operations in SA, said it opened 114 fuel retail sites in Africa in the first nine months of 2021 more than its guided 90 to 110.

“We are ahead of our forecasts of the previous year and are now expecting to deliver between 130 and 140 new sites, which is about 20%, higher than the top of the previous range. That’s very good because it impacts this year, but it will also impact next year,” said Vivo CEO Christian Chammas.

Vivo will go on delivering this growth as its balance sheet permits it, he said. “Growth is part and parcel of our DNA and as we continue pushing it we believe that the continent has more to offer, and we will be there to seize the opportunities wherever they come and of course indirectly support the development of the continent.”

In a trading update for the third quarter, Vivo reported a 3% rise in volume to 2.57-million litres on the previous year’s, with retail volume up 6%, while commercial sales fell 1%. Gross cash profit of $195m was 4% ahead of the matching quarter, driven primarily by higher volumes and unit margins. Gross cash unit margins of $76 per thousand litres were 1% higher than in 2020’s third quarter.

Covid-19 restrictions affected the business but are being wound down across jurisdictions where the brands operate.

Vivo’s Shell brand is a market leader in all but one of the African countries in which it operates. In the Engen countries, it remains small, but is growing aggressively. “It will take us a couple of years to catch up with number one or number two. If we get to number three in the coming years in the Engen markets, we will be very pleased,” Chammas said.

While growth is key for the company he said there aren’t too many merger or acquisition opportunities around. “The day a big opportunity happens, maybe down south, we will definitely look at it. And if it makes sense. We’ll go for it.”

The Vivo Energy share price gained the most in five weeks on Thursday, up 4.89% to R21.25