Vivo Energy earnings rise as full-year volumes increase

(Sharecast News) - Africa-focussed Shell and Engen fuel retailer Vivo Energy announced a 4% improvement in volumes in its full-year results on Wednesday, to 9.35 billion litres, as its total gross cash unit margin slipped to $73 per thousand litres, from $74 year-on-year.The FTSE 250 company said its second half gross cash unit margin was $71 per thousand litres, which was primarily impacted by market conditions in Morocco.Gross profit rose 2% to $624m for the year ended 31 December, with higher volumes more than offsetting lower margins, while adjusted EBITDA improved 6% to $400m.Net income totalled $146m, which was up 13% year-on-year.Adjusted diluted earnings per share were 14 US cents, while diluted headline earnings per share totalled 11 cents for the year.Vivo said it generated "strong" adjusted free cash flow of $149m, which was 8% higher than in 2017, while its leverage ratio decreased to 0.79x from 0.97x in the prior year.The board proposed a final dividend of 1.3 cents per share, which would bring the full-year dividend to 1.9 cents per share, or 30% of attributable net income.On the operational front, Vivo said it further expanded its Shell-branded network by opening a net total of 88 new retail service stations and 119 new non-fuel retail offerings during the period.It also successfully completed its transaction with Engen on 1 March, which "significantly" increased Vivo's footprint across Africa.Vivo said its total recordable case frequency, which measures the number of accidents against total man hours worked was 0.192, which it claimed was below industry peers.It also said it was the first company in Africa, and one of the first 10 companies globally, to be certified under ISO 37001 standard for anti-bribery management systems.Finally, Vivo completed the first phase of the deployment of its new enterprise resource planning system, which the board was was the first step on its "data journey"."This has been a remarkable year for Vivo Energy and we are pleased to have met our objectives for the period and delivered a strong first set of results as a public company," said chief executive officer Christian Chammas."In 2018, we achieved volume growth of 4% at a gross cash unit margin of $73 per thousand litres, which drove adjusted EBITDA of $400m."Chammas said the completion of the transaction with Engen was "transformational" for Vivo's business, adding operations in eight new countries under a "strong, well-respected" brand."During 2018 we have proved the resilience of the Group's footprint in the face of challenges in some markets."Looking forward we continue to see significant growth opportunities across our portfolio as we continue to enhance our position in our fast-growing markets across Africa."