Shares in Vivo Energy (VVO) rallied 5.6% to 75.7p on Friday as the Africa-focused fuel retailer reinstated its dividend after drawing confidence from an uptick in economic activity and higher unit margins for the third quarter (Q3) to September.

In an upbeat outlook statement, Vivo said it was ‘encouraged by the resilient performance during the quarter’, with management ‘cautiously optimistic’ for the remainder of the year and into 2021, ‘absent any major changes to current mobility restrictions’.

A retailer and distributor of Shell and Engen-branded fuels and lubricants across North, West, East and Southern Africa, Vivo Energy will now pay the 2.7 cents per share final dividend for 2019 that it withdrew due to the onset of the pandemic.

The shareholder reward will be paid out next month (18 Dec), while the level of dividends the company will shell out for 2020 will be determined at the time of the full-year results.


‘Due to the rapid actions we took to protect our business and the resilience of our business model, our balance sheet has remained strong through these exceptional times,’ explained Vivo, which has a network of over 2,200 service stations in 23 countries operating under the Shell and Engen brands and exports lubricants to a number of other African countries.

Vivo’s retail offering includes fuels, lubricants, card services, shops and restaurants and the group also provides fuels, lubricants and liquefied petroleum gas (LPG) to business customers spanning the marine, mining, construction, power, transport and manufacturing sectors.


In today’s well-received update, Vivo Energy reported higher unit margins of $75 per thousand litres in Q3, up from $71 a year earlier.

This offset a 7% year-on-year drop in quarterly volumes to 2,492 million litres, though this marked a significant improvement on the second quarter thanks to the easing of Covid-19-related mobility restrictions in Vivo’s markets.


Vivo Energy has also fortified its finances in order to contend with the coronavirus pandemic. Last month, it completed its debut bond offering, issuing $350 million of paper in order to refinance long-term debt and boost its balance sheet flexibility.

Chief executive Christian Chammas explained the aforementioned easing of mobility restrictions across Vivo’s ‘host countries’ during the quarter ‘has led to a strong improvement in gross cash profit, demonstrating our resilience and the integral nature of our products to economies across Africa.’

Chammas continued: ‘We are encouraged by the recent performance, which coupled with the strength of our balance sheet has enabled the board to restart dividend payments. We remain cautiously optimistic and believe that with our diversified and resilient business model, and attractive long term growth opportunities across Africa, we are well positioned for the future.’


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Issue Date: 30 Oct 2020