Why the Viva Energy (ASX:VEA) share price is in focus

The Viva Energy Group Ltd (ASX: VEA) share price is one to watch after the energy group’s first quarter update this morning.

| More on:
A businessman holds a bolt of energy in both hands, indicating a share price rise in ASX energy companies

Image source: Getty Images

The Viva Energy Group Ltd (ASX: VEA) share price is in focus again after climbing 1.1% higher yesterday. Investors will be watching after the Aussie energy group’s latest quarterly update prior to the market open.

Why is the Viva Energy share price in focus?

Viva Energy CEO and managing director, Scott Wyatt, said:

Viva Energy is making strong progress on our business recovery program with encouraging results in all parts of our business during the quarter.

The Viva Energy share price will be one to watch as investors see if they share the same opinion. Industry fuel volumes remain down with coronavirus-induced lockdowns and border closures weighing on demand.

Viva Energy’s quarterly petrol production reflected the challenging conditions. Alliance sales volumes “progressively improved” throughout the first quarter despite rising oil prices. Premium petrol sales are up 11% on the same period last year and now comprise 32% of total petrol sales.

Petrol sales remained flat at 780 million litres (ML) while diesel segment sales climbed 4% from Q1 2020 to 1,678 ML. The aviation sector continues to struggle with jet sales down 62% on the prior corresponding period (pcp) to 311 ML. Similarly, lower cruise ship numbers impacted its marine volumes in “Other” which fell 39% on pcp to 261 ML.

One area that makes the Viva Energy share price worth watching was its Geelong refining margin. The Aussie energy group saw its refining margin surge 119% to US$5.9 per barrel, up from US$2.7 in Q1 2020. Viva Energy said the refining environment remains “challenging” as it works with the Federal Government on the long-term fuel security package.

Viva Energy expects to receive $19.6 million from the Government’s Temporary Refinery Production Payment program for Q1 2021. However, all non-essential refinery capital expenditure has been deferred to the second half of the year.

Foolish takeaway

The Viva Energy share price is worth watching in early trade after the group’s first-quarter trading update. Premium sales led the way for the Aussie company while several challenges remain for key business segments.

Shares in the energy group are down 3.7% this year and are underperforming the S&P/ASX 200 Index (ASX: XJO) on a year to date basis.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Energy Shares

Close up of a miner wearing a hard hat with a solemn look on his face, with an oil drill in the background.
Energy Shares

Woodside share price lifts despite Twiggy’s latest ‘greenwashing’ accusations

What's impacting the Woodside share price today?

Read more »

Workers inspecting a gas pipeline.
Energy Shares

AGL share price bounces back amid latest demerger opposition

Here's the latest criticism of AGL's planned demerger.

Read more »

Coal-fired power station generic.
Energy Shares

How dependant on coal closure is the AGL share price?

Climate activists disagree with AGL's decision to hold onto coal, saying its depleting shareholder value.

Read more »

A girl holding a globe shouts into a green megaphone about climate change.
Energy Shares

Why are Fortescue and green hydrogen making news again on Friday?

The company's green energy leg has earmarked a coal-fired power plant as a future hydrogen production facility.

Read more »

A businesswoman and businessman look sideways at each other during a dispute at their laptops.
Energy Shares

AGL share price lifts despite Greenpeace accusing leadership of being ‘caught with their pants down’

The climate-focused organisation said AGL has "the memory of a goldfish and the agility of an elephant".

Read more »

a coal miner in hard hat with a light on it kisses a large lump of coal that he is holding in his hand.
Energy Shares

Why are these ASX coal shares having a top run today?

Newcastle coal futures are up on Thursday.

Read more »

A group of businesspeople hold green balloons outdoors.
Energy Shares

Own APA shares? Here’s the latest on the company’s ‘ground breaking’ green hydrogen project

The company has taken another step towards transporting green hydrogen.

Read more »

Workers inspecting a gas pipeline.
Energy Shares

What’s happening with ASX 200 energy shares this week?

US oil production forecasts have been scaled back, but global demand may fall enough to send energy prices lower.

Read more »