Energy and supply company, Viva Energy, has confirmed a strong liquidity position despite impacts of Covid-19 on its business remaining uncertain.
In a recent statement the company reported a net debt position of $137.4 million, with total debt facilities available of million.
The sell-off of a 35.5 per cent security holding in Viva Energy REIT (VVR) in February was timely having yielded proceeds of an estimated $680 million after-tax.
“Given this liquidity position we consider the company to be in a strong position to manage the Covid-19 response. We are however monitoring the situation closely and taking steps to review operating costs
and capital expenditure programs,” the company said.
Viva Energy said both its commercial and retail segments had performed well in the first two months of the year with average sales volumes in the retail Alliance network for the months of January and February 2020, achieving 59.4 and 66.2 million litres per week respectively.
This represented an increase of 6.1 per cent and 5.8 per cent respectively year-on-year.
While retail demand and market margins have been relatively stable, significant measures to curtail the spread of Covid-19 announced by the various State and Federal Governments, were expected to impact retail and commercial sales volumes over time, although the extent of which would depend on the scope and duration of reduced economic and social activity the company said.
The Geelong Refining Margin for both January 2020 and February 2020 was, however, impacted by higher crude oil premiums from crude purchases committed at the end of 2019 and lower regional refining margins due to softer global demand.
Crude oil prices and associated premiums had since declined due to the demand impacts from Covid-19 and excess supply from OPEC and other oil producers.
A weaker Australian dollar will also benefit local refining margins according to Viva Energy.
“However, regional refining margins may continue to be impacted by lower global demand for oil products in the near term, but this will depend on the extent of refining run cuts and other regional capacity reductions that result,” the company said.
“We are closely monitoring the situation and will continue to optimise refining operations by adjusting our crude oil slate and production profile in response to market changes.”