Picture: REUTERS
Picture: REUTERS

JSE-listed Vivo Energy, which operates the Shell and Engen brands in 23 African countries, expects operating profits in its year to end-December 2020 to beat analyst forecasts after demand picked up in the wake of easing Covid-19 restrictions.

In a trading update, Vivo said strong trading in its final quarter has continued into the new year, and that it intends to recommend a 2020 dividend of 3.8 dollar cents, which is in line with the 2019 dividend, and represents a payout of $48m (R705m).

The group expects full-year adjusted earnings before interest, taxation, depreciation and amortisation (ebitda) to be above the top end of a range of $331m to $354m.

Ebitda is a measure of operational profitability, with Vivo noting this could still be subject to adjustments. The estimate was formed from seven analysts who published numbers after the third quarter of 2020.

The upper end of the forecasts would represent a 17.8% decline from 2019.

CEO Christian Chammas said in a statement on Friday that the group’s strong second-half performance had continued into 2021.

“As a result, we are cautiously optimistic, and believe we are well positioned for the future due to our leading positions in structural growth markets, together with our diversified and resilient business model,” Chammas said.

In morning trade on Friday, Vivo’s share was up 6% to R16.60, on track for its best performance so far in 2021.

The group’s share has fallen almost a quarter over the past 12 months, giving the group a market capitalisation of R21bn.

gernetzkyk@businesslive.co.za

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