Viva Energy: Refining Trading Update – Smoke yet to clear

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Viva Energy: Refining Trading Update – Smoke yet to clear

J P M O R G A N Asia Pacific Equity Research

23 June 2026

Viva Energy Neutral

VEA.AX, VEA AU

Refining Trading Update – Smoke yet to clear Price (23 Jun 26):A$2.08

▼Price Target (Jun-27):A$2.40

Prior (Apr-27):A$2.60

Viva’s April/May refining margin trading update was below expectations. The US

$23.90 refining margin, while remarkably strong in absolute terms, was below Australia

JPMe 2Q26 expectations of US$28.33. While the production run-rate was ahead Australian Consumer Sector

of expectations (6.5mmbl over two months), the disruption to the Residue AC Bryan Raymond

Catalytic Cracking Unit (RCCU) and the Alkylation unit has impacted the ability (61-2) 9003-6750

of the Geelong refinery to produce high margin, finished products. The Alkylation bryan.raymond@jpmorgan.com

unit being out of commission through to the end of 2027 is driving a ~10% Christina Kim

reduction in refinery production. We expect business interruption insurance to (61-2) 9003-7082

recover ~80% of the earnings impact over the next 18 months, however, this christina.kim@jpmorgan.com

remains uncertain. After insurance proceeds, we downgrade EBITDA by -5.2% in J.P. Morgan Securities Australia Limited

FY26e, -0.9% in FY27e and -0.4% in FY28e. We lower our price target from $2.60

to $2.40 and maintain our Neutral rating, with a preference for Ampol over Viva Key Changes (FYE Dec)

amongst the refiners. Prev Cur Δ

Adj. net income - 26E (A$ mn) 560 514 -8.3%

• Refining earnings volatility continues. Viva’s energy and infrastructure

(E&I) earnings profile remains volatile, with industry-wide refining margin Half Yearly Forecasts (FYE Dec)

uncertainty combining with rising crude premia and the Geelong fire to drive Adj. net income (A$ mn)