Vivo Energy Share Discussion Threads

[dickbush] 27/4/2021 08:08

1st qtr report shows the Gross Cash Profit up 9% y/y. Note that 2020's first qtr had the first two months of normal trading before the effects of covid hit March trading. Also, they lost a "material supply contract" in the commercial sector-first reported in the 3rd qtr of last year. The net of all of this was a 5% decline in volumes y/y. Unit margin of $79 looks very (unsustainably?) high. No doubt some comment on this in the presentation at 9 a.m.

Note that the first qtr is usually the low point for supply and profit, and the second and third qtr comparisons y/y will be easy. Therefore, it is qtr/qtr comparisons we need to keep an eye on. In particular, what is happening to the commercial side ex the lost contract.

Having said that, IF this is the lowest qtr for the year, then published analysts concensus will have to be increased.

[dickbush] 15/4/2021 07:05

The consensus has been updated on Vivo's website:

2021: 10.9 cents

2022: 12.6 cents

[dickbush] 13/4/2021 07:50

Thanks, Sam. I'll take a look again.

[sam 4224] 12/4/2021 12:01

Seems to have mention pages 41,94,95, and especially 103,104 and 106. Hope this helps

[dickbush] 12/4/2021 10:30

First qtr results due out on the 27th.

[dickbush] 09/4/2021 16:14

sam, I may be going blind but I've gone through the 2020 Report and Accounts twice and I can't find anything on executive compensation. I'd appreciate it if you would take a look and, if you find the section, please let me know. I sent an email yesterday asking where it is but no reply yet.

[sam 4224] 10/3/2021 10:44

Saw the presentation. Think this has loads of potential

[sphere25] 10/3/2021 10:31

Further to previous post, volume is now appearing. Big blocks exchanged at 93p with the volume up at 18.1m.

Sellers exhausted at 93p to allow a rally higher or will the sellers take back control of 93p and prevent the move higher?

Important intraday move to follow.

All imo
DYOR

[dickbush] 05/3/2021 09:43

Note that their website provides the consensus of 7 analysts estimates. Current forecast is before the recent full year figures were announced. Worth checking in a week or two.

[dickbush] 03/3/2021 10:49

VIVO reported today and EBITDA is just as they said it would be, i.e. the second half the same as 2019. See the presentation on the website,

Despite the very poor markets for air and marine, the Gross Cash Profit number increased y/y in the 4th qtr.

Dividends to be at least 50% of eps. No problem given the free cash flow in normal times.

Obviously, we want to see the first half EBITDA similar to the first half of 2019 with growth coming from a gradual return of the air and shipping business. So, it seems safe to assume good growth in 2022.

Beyond 2022, the IMF is forecasting above average growth for the continent, and at some point global investors should rotate, as they have in the past, into African based companies.

Fingers crossed for no SNAFU's.

[queenbreguet] 17/2/2021 22:18

London, 15 February 2021 -- Moody's Investors Service ("Moody's") has today affirmed the Baa3 long-term issuer rating of Vivo Energy Plc ("Vivo Energy") and affirmed the Baa3 instrument rating assigned to the $350 million guaranteed senior unsecured notes due 2027 issued by Vivo Energy Investments B.V., a wholly owned subsidiary of Vivo Energy. The rating outlook for all ratings has changed to negative from stable.

"The change of the rating outlook to negative primarily reflects Vivo Energy's increased sovereign risk exposure. This is reflected by the recent change in rating outlook on the Ba1 rating of Morocco, Vivo Energy's largest market, as well as a number of recent negative rating outlooks assigned to other African countries where Vivo operates. This exposes Vivo Energy to increased sovereign risks and greater uncertainty around governments' responses to higher debt burdens and a slowing growth environment triggered by the spread of the coronavirus. " says Dion Bate, a Moody's Vice President -- Senior Analyst and local market analyst. "The affirmation of Vivo Energy's Baa3 rating, however, recognizes the company's broad geographical diversification, a strong financial profile with leverage expected to decrease this year and good liquidity, providing a degree of insulation against sudden market disruptions." adds Mr Bate.

RATINGS RATIONALE

The negative rating outlook reflects the weakening sovereign credit quality across Vivo Energy's countries of operation, including Vivo Energy's top three largest markets, namely Morocco (Government of Morocco; Ba1 negative), Kenya (Government of Kenya; B2 negative) and Tunisia (Government of Tunisia; B2 negative). These countries accounted for 43% of volumes sold in 2019. As of 10 February 2021, 11 out of 16 Moody's rated African countries where Vivo Energy operates had a negative rating outlook, signaling a widespread deterioration of sovereign credit quality and heightened business risks for Vivo Energy. While Vivo Energy has a good track record of navigating through the challenges of operating in Africa, the probability of event risks crystallizing are increasing as country ratings move lower.

Moody's continues to believe that the company's geographic diversification across 23 African countries is a credit strength and it mitigates significantly the financial impact that unexpected changes to regulatory frameworks or other sovereign driven actions that could be detrimental to Vivo Energy's cash flows. The distribution of petroleum products for retail and industrial use remains essential to the functioning and development of African countries. These considerations are fully reflected in the Baa3 rating despite the mostly sub-investment grade countries that Vivo Energy operates in. However, there are credit linkages between Vivo Energy's rating and the relevant sovereign ratings because of the company's local operations, which are subject to local laws and regulations, and to the risk of currency repatriation, amongst others. Therefore, further deterioration of sovereign credit quality is likely to have an adverse impact on Vivo Energy's rating.

The Baa3 issuer rating continues to recognize Vivo Energy's robust business profile, as shown by (1) its limited exposure to petroleum product price risk through arrangements with suppliers to land products at prevailing prices set by regulators; (2) the fact that most of its markets are regulated with absolute margins granted on fuel prices, providing certainty on gross profit margins; (3) the strength of the Shell and Engen brands in Africa; and (4) the critical socioeconomic role that fuel retailers play in African countries. In addition, the Baa3 rating takes into account the company's conservative financial policy (maintaining net debt/ EBITDA below 1.5x) and a good liquidity. This is in combination with low exposure to any single country, helps insulate the business from single market event risks.

Moody's expect a stable recovery of fuel volumes following lockdowns across African countries during the second quarter of 2020 and that Vivo Energy's operating and financial performance will continue to improve back to historical levels. For the twelve months to 30 June 2020, gross debt to EBITDA increased to 2.8x from 1.9x in 2019 but is expected to improve to below 2.0x during 2021. While mobility restrictions remain a risk for 2021, Moody's base case assumes mobility restrictions are likely to be less severe than in 2020, leading to more stable volume demand in 2021.

Vivo Energy's liquidity is good and supported by a large cash balance of $460 million as of 30 June 2020, of which $240 million is held in offshore accounts. Moody's understands that the company aims to keep around $400 million of gross cash on its balance sheet. In response to COVID-19, the company drew $110 million from the $300 million revolving credit facility (RCF) in the first half of 2020 and deposited it in cash as a precautionary measure. The company has also demonstrated its flexibility to reduce its capital expenditure and to amend its dividend policy to preserve cash. Moody's expects Vivo Energy to have sufficient sources of cash flows in 2021 to meet its working capital requirements; capex of around $175 million and pay dividends in line with its dividend policy.

Moody's understand that Vivo Energy has $1.3 billion worth of trade finance lines, of which $323 million are utilised as of 30 June 2020, for working capital purposes to fund fuel purchases within the various countries of operation. These facilities are material in size but Moody's expect them to be only partly utilised in future. As these credit lines are uncommitted Moody's do not consider them as a source of liquidity.

[dickbush] 16/2/2021 12:29

I disagree that the chart id doing nothing. It looks to me to be building nicely.

[sphere25] 15/2/2021 15:11

And a dividend.

So the question is why is it lagging the whole sector and stuck down at these levels despite all those bullish noises?

Oilers/miners are hard work. I don't know the story here, but just wondering why it isn't rallying on the good news and whether there is a high risk opportunity here?

Very much in SpeculaVille here. The chart is doing nothing, the volume hasn't been significant enough to suggest any real signal for a re-rating as yet. Possibly going to need a 10-20m volume signal?

Had a go with LAM and JSE in oil. They went well, but everything has been going well, hardly a sign of oil expertise.

Keeping a watch to see if larger interest does follow here for a higher risk trading opportunity at some point.

All imo
DYOR

[dickbush] 15/2/2021 10:19

Prospective p/e of 10 times this year's earnings with a recovery in airline and marine traffic still to come. Finances sorted with the issue of $350mil of senior notes at 5.125%. $325mil of free cash flow in 2019 likely to be duplicated in 2021. Able to pursue further growth through acquisition. I've added.

Late note. Free cash flow in 2019 included a large exceptional . We should still be looking for $200mil plus for 2021..

[dickbush] 12/2/2021 07:40

2nd half adjusted EBITDA comparable to 2019's, and positive comparison continuing this year.

[sam 4224] 09/2/2021 16:02

thanks for that. Fingers crossed things will improve .

[dickbush] 09/2/2021 15:04

sam, you don't have to worry about how South Africa is doing. As far as I'm aware it is not part of their area of interest. From wikipedia:

Botswana, Burkina Faso, Cape Verde, Ghana, Guinea, Ivory Coast, Kenya, Madagascar, Mali, Mauritius, Morocco, Mozambique, Namibia, Senegal, Tunisia and Uganda. However, in March 2019, Vivo Energy completed a transaction with Engen Petroleum, adding eight new countries and 230 Engen-branded service stations to its network. The new markets for Vivo Energy were Gabon, Malawi, Mozambique, Réunion, Rwanda, Tanzania, Zambia and Zimbabwe; accordingly Vivo operates in 23 countries.

As you say, a disappointing performance recently. Given the movement of airline stocks recently, I would have expected more forward looking on this one.

[sam 4224] 15/1/2021 11:24

hi,yes, many thanks, a bit disappointed how this is doiig at present but certainly South Africa like us is having a rough time at the moment. Hopefully the share will come back with a vengeance. Thanks for your comment. Was beginning to think I was the only one invested here !

[dickbush] 15/1/2021 09:31

sam, Mine arrived in my account on 11th Jan.

[sam 4224] 19/12/2020 13:21

Hi ,Have you received any dividend yet ? I thought it was going to be issued on the 18 dec but nothing in my interactive investor account to date . All boards on this company seem very quite. Surprised as I think it will do well

[dickbush] 11/11/2020 15:49

Some one or some ones big is really determined to get a significant holding, presumably as a play on a return to business as usual, including airlines and shipping.