Viva Energy Group Ltd. · ASX:VEA
Viva Energy — Corporate Update (June 2020)
25 slides from Viva Energy's corporate update, Jun 16, 2020
Slide 1: Viva Energy 1H2020 Unaudited Financial Guidance, Major Maintenance and Strategic Update
16 June 2020 The Manager Market Announcements Office Australian Securities Exchange Electronic lodgment Viva Energy 1H2020 Unaudited Financial Guidance, Major Maintenance and Strategic Update The attached announcement is for release to the market. Authorised for release by: the Board of Viva Energy
Slide 2: 1H2020 Unaudited Financial Guidance, Major Maintenance and Strategic Update
Viva Energy 1H2020 Unaudited Financial Guidance, Major Maintenance and Strategic Update Helping people reach their destination Viva Energy Group Limited
Slide 3: Important notice and disclaimer
Important notice and disclaimer This presentation has been prepared by Viva Energy Group date is indicated, in which case the information is current to that You should rely on your own independent assessment of any Limited, ACN 626 661 032 (“Company” or “Viva Energy”). date) and is subject to change
Slide 4: 1H2020 unaudited financial guidance
1H2020 unaudited financial guidance Viva Energy Group Limited 1H20 Unaudited Financial Guidance, Major Maintenance and Strategic Update 3
Slide 5: COVID-19 management
COVID-19 management Viva Energy has successfully managed COVID-19 risk to people and operations Refining Capital and Operating Costs • Residue Catalytic Cracking Unit and smaller • Projects deferred reducing capital cost to $60 distillation unit shutdown. Options to restart to $80M (excluding refini
Slide 6: May 2020 performance summary
May 2020 performance summary Retail beginning to show signs of recovery, with optimisation steps minimising losses in refining Month ended YTD Change 31 May 2020 May 2020 YTD May ‘20 vs ‘19 Refining Intake (MBBL) 2.4 16.0 (10%) Geelong Refining Margin (US$/BBL) 3.5 3.1 (42%) Alliance Sales (ML/Week)
Slide 7: 1H2020 unaudited financial guidance
1H2020 unaudited financial guidance Market conditions were challenging in 1H2020 largely due to impacts from COVID-19 1H2020 unaudited financial guidance Lower sales volumes offset by improved retail fuel All numbers are in ($m) unless 1H2020 1H2019 margins compared with 2019 otherwise noted Volume
Slide 8: COVID-19 refining impacts and major maintenance update
COVID-19 refining impacts and major maintenance update Viva Energy Group Limited 1HY20 Unaudited Financial Guidance, Major Maintenance and Strategic Update 7
Slide 9: COVID-19 impacts and refining operations
COVID-19 impacts and refining operations Production reduced to meet significant decline in demand for oil products 2020YTD: Total fuel volumes sold by product (ML) 2020YTD: Geelong refining production 1,196 1,224 1,219 18% 18% 16% 21% 4% 30% 133 142 150 11% 14% 12% 922 4% 287 215 833 317 85 46% 87 7
Slide 10: Refining operations and major maintenance
Refining operations and major maintenance RCCU1 maintenance to proceed from July, with HFA2 maintenance deferred until 2021 Original plan RCCU & HFA major maintenance $110 - $140m +700 people Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2021 RCCU, HFA Hydro-skimming mode RCCU and HFA shutdown All
Slide 11: Capital expenditure
Capital expenditure Total capex is now forecast to be between $145 – 180m in FY2020 Original Revised Capital expenditure profile ($m) Capital expenditure ($m) FY2020F FY2020F 309 Capital expenditure 140 – 160 60 – 80 42 248 241 Refining major maintenance 110 – 140 85 – 100 234 28 30 132 45 Total 250
Slide 12: Geelong Refinery outlook and strategy
Geelong Refinery outlook and strategy Viva Energy Group Limited 1H20 Unaudited Financial Guidance, Major Maintenance and Strategic Update 11
Slide 13: Historical refining performance
Historical refining performance Weaker gasoline margins impacting performance despite operational improvements RCCU Weakening gasoline Refining 326 maintenance margins 276 Underlying EBITDA (RC) ($m) 144 125 117 IMO transition & COVID-19 -32.5 to -42.5 2015 2016 2017 2018 2019 1H2020 2015 2016 2017
Slide 14: Refining outlook
Refining outlook Refining margins impacted by declines in regional demand Refining margin cracks and GRM (US$/bbl)1 20 • Weaker global demand growth and increased production 18 weighing on gasoline margins 16 • Geelong Refining Margin impacted relative to historical averages 14 • Gasoline outlook is
Slide 15: Local capability
Local capability Geelong has some local advantages which provide uplift over regional margins Freight advantage (2015 to 2020TD)1 Local crude sourcing (% of total Specialties contribution to GRM crude sources) 2015-2019 average: 30% 250 210 170 31% 43% 40% 36% 34% 130 2015-2019 average: 8% 90 17% 12
Slide 16: Strategic direction
Strategic direction A broad effort is necessary to sustain long term viability Business Improvement Leveraging our Capability Reduce LNG crude Supply & costs Storage Reduce Gas to energy Solar Power costs Energy Improve Farm processing flexibility Improve Increase Hydrogen Hydrocarbon plant speciali
Slide 17: Geelong Energy Hub
Geelong Energy Hub Viva Energy Group Limited 1H20 Unaudited Financial Guidance, Major Maintenance and Strategic Update 16
Slide 18: Victorian energy demand
Victorian energy demand Geelong refinery supplies 20% of Victoria’s total energy requirements Energy consumption in Victoria (PJ) 1 Sale of petroleum products in Victoria (ML)2 4% 4% 4% 4% 4% 2,375 1,688 2,056 20% 20% 20% 20% 22% 1,483 1,597 1,690 1,916 2,035 2,255 2,383 35% 32% 35% 36% 38% 46% 4,79
Slide 19: Natural gas
Natural gas Key transition fuel supporting manufacturing and the transition to a cleaner energy future Australian East Coast gas supply/demand balance (PJ)1 600 500 400 • Lower forecast gas production potentially leading to supply shortfalls from as early as 2023/24 300 • Additional supply will be n
Slide 20: Floating LNG storage and supply
Floating LNG storage and supply A virtual pipeline to bring natural gas to the heart of Victoria Natural gas supply • Virtual pipeline from northern fields to southern states • 80 to 140 PJ supply or up to 30% of southern state demand • Increased competition from new gas suppliers Potential associat
Slide 21: Hydrocarbon storage and supply
Hydrocarbon storage and supply Leveraging the company’s nationally integrated infrastructure position Locations • Gateway to largest eastern seaboard markets • Significant storage, pipeline and infrastructure positions • Surplus land to expand and support increased utilisation • Controlled port acce
Slide 22: Renewables transition
Renewables transition Geelong Energy Hub presents opportunities for Viva Energy to support lower carbon transition Solar and Battery Storage • Potentially up to 27MW with an output of over 59GWh per year • Occupy approximately 41 hectares of land (equivalent of 23 x MCG stadiums) Hydrogen Manufactur
Slide 23: Geelong Energy Hub
Geelong Energy Hub Viva Energy has a vision to develop Geelong into a leading ‘Energy Hub’ Location • Victoria’s second largest city and port • Existing integration into energy infrastructure • Capacity for further development of precinct Skills and Capability • Chemical Process and Mechanical Engin
Slide 24: Next steps
Next steps A highly consultative engagement approach to meet needs of the community and government Expression of interest for commercial involvement in LNG 1 Supply and Storage (commences June 2020) Complete pre-FEED feasibility studies for Floating LNG 2 Imports and Solar projects Respond to antici
Slide 25: Viva Energy Group Limited
Viva Energy Group Limited