Highlights

  • Viva Energy Shares dropped 8.09% on Thursday following its quarterly update, extending its one-year decline to 26.76%.
  • Convenience sales fell 11.4%, driven by a sharp 33.6% decline in tobacco volumes amid ongoing illicit trade.
  • Refinery throughput was disrupted by planned maintenance and commissioning activities, despite a solid GRM of USD 12.1/bbl.
  • The company’s convenience margins improved to 42.2%, while OTR stores delivered like-for-like growth and network expansion continued.

Viva Energy Group Ltd (ASX:VEA) shares fell 8.09% on 29 January 2026, extending the stock’s decline to 26.76% over the past year, following the release of the company’s operating update for the three months ended 31 December 2025. The update highlighted a mixed operating backdrop, with softer convenience retail performance and refinery disruptions weighing on investor sentiment.

While total Group sales volumes increased 1.1% year-on-year in 4Q2025, performance across the Convenience & Mobility segment was negatively impacted by store conversion activity and the divestment of 15 Liberty Convenience stores required under acquisition terms. After adjusting for these impacts, fuel sales volumes in the segment declined 1.5% compared with the same period last year.

Retail Weakness and Refinery Disruptions Weigh on Quarterly Performance

The company reported 11.4% decline in convenience sales over the quarter, driven primarily by a 33.6% fall in tobacco sales. The company cited the continued impact of illicit trade across the sector as a key factor affecting tobacco volumes.

 Sales excluding tobacco also declined by 1.3%, largely due to temporary trading interruptions associated with store conversions, contributing to softer retail performance during the quarter.

Refining performance was also impacted during the quarter, with intake of 9.4 million barrels affected by planned major maintenance, the restart of the Residual Catalytic Cracking Unit, commissioning activities at the Ultra Low Sulphur Gasoline plant, and power disruptions. These operational factors contributed to production variability despite the refinery delivering a gross refining margin of USD 12.1 per barrel.

Margins Strengthen and Aviation Growth Support Underlying Stability

However, the operating update also highlighted areas of stability and progress. Growth in the Commercial & Industrial segment, particularly in Aviation, supported overall Group sales volumes and helped offset weaker conditions in Marine.

Gross margin on total convenience sales improved by 4.5% to 42.2% during the quarter, and tobacco volumes were reported to have stabilised during the second half of 2025.

In addition, convenience sales excluding tobacco were in line with the prior year on a like-for-like basis, with OTR format stores recording growth of 1.9%. Network expansion continued during FY2025, with 35 OTR stores opened and five Liberty conversions completed in the quarter.

From a financial perspective, Viva Energy refinanced and increased its Revolving Credit Facility to USD 1.3 billion, maintaining full compliance with debt covenants and sufficient liquidity headroom.

Market Perspective

Viva Energy’s 4Q2025 update underscores near-term operational and retail challenges, particularly across convenience sales and refinery operations, which appear to have driven the sharp share price reaction. However, stable aviation demand, improved convenience margins, and maintained funding capacity remain areas of investor focus as the company moves into 2026