HIGHLIGHTS

• Macquarie rates VEA Outperform with a target price of AUD$3.30, representing approximately 44% upside from the current price of AUD$2.29, which rose 2.23% on 4 June 2026.
• Viva Energy anticipates the Geelong Refinery's RCCU and associated units will return to operation during June 2026, following the 15 April fire at the Alkylation unit, with production expected to exceed 90% of capacity post-restart.
• Insurance Claims covering both property damage and Business interruption have been engaged, and the company maintained normal fuel Supply to customers throughout the reduced-capacity period.

Viva Energy Group Limited (ASX:VEA) was trading at AUD$2.29 on 4 June 2026, up 2.23%, or AUD$0.05, on the day — a modest recovery that follows a period of share price pressure attributable in part to the Geelong Refinery fire disclosed on 15 April 2026. Macquarie maintains an Outperform rating on VEA with a target price of AUD$3.30, implying approximately 44% upside from current levels. The broker's thesis appears to rest on the view that the refinery disruption is temporary, that insurance coverage will adequately compensate for both property damage and business interruption losses, and that the fundamental Earnings power of Viva Energy's diversified infrastructure and retail network remains intact.

Geelong Refinery: Fire, Isolation, and Restart Timeline

On 15 April 2026, a fire occurred at the Alkylation unit of Viva Energy's Geelong Refinery in Victoria. Since the incident, the company has been focused on safely securing the impacted unit and isolating it from the broader refinery complex, so that unit inspections and preparatory works necessary to restart the Residue Catalytic Cracking Unit (RCCU) could safely commence. In its 4 May 2026 update, Viva Energy confirmed this process was progressing well with no impediments identified. Subject to further inspection, the company anticipates that repairs to the impacted units necessary to restart the RCCU will take approximately six weeks from the announcement date, with the RCCU and associated units expected to return to operation during June 2026.

Following the RCCU restart, production is expected to increase to over 90% of the refinery's capacity. In the interim period while the RCCU has been offline, the Geelong Refinery has been producing diesel and jet fuel at approximately 80% of capacity and petrol at approximately 60%. The company confirmed it has maintained sufficient fuel stocks to cover this reduced production, ensuring normal fuel supply to customers throughout the disruption period — a critical operational and reputational objective for a company that supplies nearly 1,550 service stations nationally.

Insurance and Financial Impact Assessment

Viva Energy has engaged its insurers in relation to the incident, covering both property damage and business interruption. The involvement of business interruption insurance is particularly relevant for investors assessing the financial impact, as it provides a mechanism to partially or fully offset the Revenue shortfall from the reduced production period. While the precise quantum of the insurance recovery is yet to be determined — pending completion of the damage assessment and cause investigation — the engagement of both coverage streams suggests management believes the incident is insurable and that the financial impact will be buffered accordingly. The company's ongoing investigation into the cause of the incident and assessment of damage duration remains in progress.

Business Profile: Beyond the Refinery

Viva Energy is a materially diversified business that extends well beyond its refinery operations. The company operates a retail convenience and fuel network of over 1,280 stores across Australia and supplies fuels and lubricants to a network of nearly 1,550 service stations. Its infrastructure footprint includes more than 25 terminals, 98 airports and airfields, and an extensive bulk fuels, aviation, bitumen, marine, chemicals, and lubricants network. This Diversification means that even with the Geelong Refinery operating at reduced capacity, the broader business continues to generate revenue from network and retail operations. Viva Energy has a history of more than 120 years in the Australian market, and the Geelong Refinery — while significant — is one component of a multi-faceted energy infrastructure platform.

Near-Term Catalysts and Operational Normalisation

The primary near-term catalyst for VEA is the confirmation of the RCCU restart and the return to greater than 90% production capacity at Geelong, anticipated during June 2026. A successful and on-schedule restart would remove the production overhang from the share price and likely trigger a reassessment of the financial impact. The subsequent disclosure of the insurance claim outcome — both property damage and business interruption — will provide the market with a clearer picture of the net financial cost of the incident. Investors will also be watching for any guidance update or half-year result commentary that incorporates the April to June disruption period within its financial framing.

Conclusion

Viva Energy's Geelong Refinery fire represents a material but time-limited operational disruption that the company has managed to contain without supply chain failure and with insurance mechanisms in place. Macquarie's AUD$3.30 Outperform target embeds the view that the fundamental value of VEA's diversified energy infrastructure, retail network, and refining platform is not structurally impaired by the April incident, and that the current share price at AUD$2.29 does not reflect normalised earnings capacity. The June restart of the RCCU is the key near-term event that could validate this thesis, while any delays or complications with the restart — or adverse developments in the insurance assessment — would be the scenarios most likely to weigh further on the share price. For investors focused on the long-term energy infrastructure opportunity, the gap to Macquarie's target is notable.