Vivo multiplies retail fuel rollout
Shell is a market leader in all but one of the African countries in which it operates, while in the Engen countries, the brand is growing aggressively
Vivo Energy, the owner of the Shell and Engen brands in 23 African countries, is rolling out new petrol stations at an accelerated rate as it knuckles down on its ambitious growth plans across the continent.
The group, which is listed in Johannesburg but has no operations in SA, said it opened 114 fuel retail sites across the continent 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,” Vivo CEO Christian Chammas told Business Day.
Vivo will continue to deliver this growth, because 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 of the year, Vivo reported a 3% rise in volumes to 2.57-million litres compared with the previous year, with retail volumes up 6%, while commercial sales fell 1%.
Gross cash profit of $195m was 4% ahead of the comparative quarter, primarily driven by higher volumes and unit margins. Gross cash unit margins of $76 per thousand litres were 1% higher than in the third quarter of 2020.
Covid-19 restrictions affected the business but they are now dissipating across the jurisdictions in which 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.”
Vivo’s share price gained the most in five weeks on Thursday, up 4.89% to R21.25.