TIDMVVO
RNS Number : 5222G
Vivo Energy PLC
27 July 2021
27 July 2021
Vivo Energy plc
(LSE: VVO & JSE: VVO)
2021 Half Year Results
Vivo Energy plc, the pan-African retailer and marketer of Shell
and Engen-branded fuels and lubricants, today announces its
consolidated financial results for the six months ended 30 June
2021.
Christian Chammas, CEO of Vivo Energy plc, commented : "Our
strong performance during H1 2021 further demonstrates the strength
of our business and the resilience of the African continent. There
is real momentum in the business and we delivered adjusted EBITDA
of $ 220 million, 57 % above H1 2020, and notably 4% above H1 2019.
My thanks go out to all our teams for their efforts in staying safe
whilst driving the business forward in the face of the continuing
uncertainty created by COVID-19. We have shown once again that we
can adapt to the changing operating environment whilst
simultaneously supporting future earnings growth, opening 81 net
new sites in the first half and continuing to broaden our customer
offerings . As we move into the second half we are watchful of the
potential impacts of COVID-19, but still expect Retail to lead the
recovery and are demonstrating our confidence in our business by
both investing in growth and delivering growing returns to
shareholders."
KEY PERFORMANCE INDICATORS(1)
Six-month Six-month
period period
ended ended
($ in millions), if not otherwise 30 June 30 June
indicated 2021 2020 Change
---------------------------------------- ---------- ---------- -------
Volumes (million litres) 5,009 4,618 +8%
Revenues 3,989 3,375 +18%
Gross Profit 343 261 +31%
Gross Cash Unit Margin ($/'000 litres) 77 65 +18%
Gross Cash Profit 385 300 +28%
EBITDA 219 136 +61%
Adjusted EBITDA 220 140 +57%
Net Income 76 13 +485%
Diluted EPS (US cents) 6 1 +500%
Adjusted Net Income 77 16 +381%
Adjusted Diluted EPS (US cents) 6 1 +500%
---------------------------------------- ---------- ---------- -------
(1) Refer to the non-GAAP financial measures definitions and
reconciliations to the most comparable IFRS measures on pages 11
and 12.
Financial Highlights
-- Revenues increased by 18% to $3,989 million (H1 2020: $3,375 million)
-- Gross cash profit was higher at $385 million (H1 2020: $300
million) as both volumes and unit margins rebounded from the
initial impacts of COVID-19 lockdowns in H1 2020
-- Volumes sold rose 8%, as mobility restrictions eased compared to H1 2020
-- Gross cash unit margin of $77 per thousand litres (H1 2020: $65), remained strong
-- Adjusted EBITDA was $220 million, 57% higher than H1 2020, with EBITDA of $219 million
-- Net income increased to $76 million (H1 2020: $13 million)
-- Adjusted diluted EPS and basic headline EPS were both 6 US cents
-- Interim dividend per share of 1.7 US cents declared, in line with enhanced policy
-- Net debt / adjusted EBITDA ratio decreased to 0.77x at 30 June 2021 (FY 2020: 0.86x)
Strategic and Operational Highlights
-- Enhanced measures to keep our employees protected from COVID-19
-- Actively supporting the vaccination of our staff where possible
-- Maintained safety focus, with Total Recordable Case Frequency (TRCF) of zero
-- Expanded Retail footprint by a net total of 81 new retail service stations
-- Expanded Non-fuel retail offerings by a net total of 11 QSRs
and 44 convenience retail shops
H1 2021 Review
The Group delivered a strong start to the year, with gross cash
profit of $385 million, well ahead of H1 2020 and 10% ahead of H1
2019. This was driven by volume growth of 8% compared to H1 2020
and continuing unit margin strength. The volume recovery was led by
the Retail segment, with volumes 18% ahead of H1 2020, as mobility
restrictions eased and we saw the impact of the accelerated site
roll-out programme and a range of marketing initiatives. Commercial
volumes were 4% behind H1 2020, but excluding the impact of the
supply contract that ended in Q3 2020, were 4% ahead. Lubricant
volumes were also very strong, up 14% on both H1 2020 and H1 2019.
Unit margins of $77 per thousand litres benefitted from the
positive supply and pricing environment, particularly in Q1 2021,
and from the strong performance in the Retail and Lubricants
segments creating a higher margin product mix.
The operational recovery drove a significant improvement in
financial performance, with adjusted EBITDA of $220 million, 57%
ahead of H1 2020 and 4% ahead of H1 2019. This led to earnings per
share of 6 US cents, compared to 1 US cent in H1 2020 and in line
with H1 2019. The Group also continued to deliver strong cash
flows, even with increased investments into the Retail network,
delivering adjusted free cash flow of $90 million during H1
2021.
COVID-19 Update
We continue to adapt to the uncertainties that COVID-19 has
created across our operating countries with demand for fuel
continuing to recover and remaining very resilient during the
period. During the period, many of our markets experienced a
further wave of infections, but unlike in Europe, the reported
health impact remained limited and our markets generally kept their
economies open. Over the last six months, our host governments have
regularly evolved their mobility restrictions in response to
changes in local case numbers, preferring to use curfews of varying
durations, and temporary restrictions on regional movements in
countries as their primary response. These measures naturally have
an impact on mobility and therefore fuel demand but are
significantly less disruptive than the full lockdowns experienced
in Q2 2020. Borders have, however, largely remained closed which
has both affected our Aviation business and meant that countries
with large tourism industries have seen a slower recovery in retail
fuel demand.
In June, a number of our markets began to experience a third
wave of rising case numbers and in response, amongst other
measures, some governments have once again extended curfew s and
closed schools. To date, these actions have had a limited impact on
the Group volumes in aggregate, although in Uganda, which imposed a
full lockdown until the end of July, volumes have been more
materially affected. Our experiences over the past year mean that
as a business, we are well prepared for the continuing evolution of
restrictions. We have continued to take a proactive approach to
managing our operations and working practices through COVID-19,
with a hybrid working system in a number of offices and depots and
where possible, are actively supporting vaccinations of our staff.
We will provide support to the nascent vaccination programmes where
we can as we move through H2 2021, and are ensuring we are prepared
for the recovery as restrictions evolve.
Sustainability
The Group continues to place significant focus on sustainability
matters and our climate change response. Whilst sustainability is
already integrated into our operations, we took the decision to
form an ESG and Climate Management Committee, chaired by the CEO,
to guide our future approach and support the deeper integration of
climate change considerations into the business. A key focus has
been preparing for our first TCFD disclosures at the end of the
year. The Group continues to implement initiatives to reduce its
environmental impact, and in Ghana has signed a contract to
retrofit 20 sites with solar power. These will both reduce
operating costs and provide over 500 tonnes of CO(2) savings per
annum once installed.
Dividend
The Board has approved an interim dividend of 1.7 US cents per
share amounting to approximately $21.5 million. This is in line
with the Group's progressive dividend policy that was enhanced at
the 2020 full year results. The interim dividend is expected to be
paid on 10 September 2021. Due to the pandemic, the Group did not
declare an interim dividend in respect of H1 2020, but declared a
final dividend in respect of the full twelve months of 2020.
Outlook
The Group had a strong first half, and we enter H2 2021 from a
position of strength. As expected, performance was led by the
recovery in our Retail business as mobility restrictions eased
across our markets, with margins also returning towards more
normalised levels in Q2 2021. We are navigating the uncertainty
created by COVID-19, and subject to any major change in mobility
restrictions, our expectations for the full year remain unchanged.
As we move into the second half, we expect margins to complete
their normalisation, with volumes continuing their steady recovery,
led by the positive momentum in the Retail segment. This has been
supported by the excellent progress we have made on network
expansion and we now believe we will comfortably be at the top end
of our original guidance range of 90--110 net new sites by the end
of the year. We will continue to support our employees, customers
and communities as we deliver against our key focus areas for the
year in order to capture the long-term structural growth
opportunities in our markets and create sustainable value for all
of our stakeholders.
End
Results presentation
Vivo Energy plc will host an audio webcast for analysts and
investors today, 27 July 2021 at 09.00 BST, which can be accessed
at https://webcasting.brrmedia.co.uk/broadcast/
60ddc2aa0bb2806642d68f86
Participants wishing to ask a question should dial in to the
event by conference call:
Dial-in: +44 330 336 9127 (UK) / +27 11 844 6054 (SA)
Participant access code: 227087
The replay of the webcast will be available after the event at
https://investors.vivoenergy.com
Media contacts: Investor contact:
Vivo Energy plc Vivo Energy plc
Rob Foyle, Head of Communications Giles Blackham, Head of
+44 20 3034 3740 / +44 7715 036 Investor Relations
407 +44 20 3034 3735 / + 44
rob.foyle@vivoenergy.com 7714 134 681
giles.blackham@vivoenergy.com
Tulchan Communications LLP
Harry Cameron, Suniti Chauhan
+44 20 7353 4200
vivoenergy@tulchangroup.com
Notes to editors:
Vivo Energy operates and markets its products in countries
across North, West, East and Southern Africa. The Group has a
network of over 2,400 service stations in 23 countries operating
under the Shell and Engen brands and exports lubricants to a number
of other African countries. Its retail offering includes fuels,
lubricants, card services, shops, restaurants and other non-fuel
services. It provides fuels, lubricants and liquefied petroleum gas
(LPG) and solar energy solutions to business customers across a
range of sectors including marine, aviation, mining, construction,
power, transport and manufacturing. The Company employs around
2,700 people and has access to over 1,000,000 cubic metres of fuel
storage capacity and has a joint venture, Shell and Vivo Lubricants
B.V., that sources, blends, packages and supplies Shell-branded
lubricants .
Vivo Energy plc has a primary listing on the London Stock
Exchange, and is a member of the FTSE 250 index, with a secondary
inward listing on the Johannesburg Stock Exchange.
For more information about Vivo Energy please visit
www.vivoenergy.com
Forward-looking-statements
This announcement includes forward-looking statements. These
forward-looking statements involve known and unknown risks and
uncertainties many of which are beyond the Company's control and
all of which are based on the Directors' current beliefs and
expectations about future events. Forward-looking statements are
sometimes identified by the use of forward-looking terminology such
as: "believe", "expects", "may", "will", "could", "should",
"shall", "risk", "intends", "estimates", "aims", "plans",
"predicts", "continues", "assumes", "positioned", "anticipates" or
"targets" or the negative thereof, other variations thereon or
comparable terminology, but are not the exclusive means of
identifying such statements. These forward-looking statements
include all matters that are not historical facts. They appear in a
number of places throughout this report and include statements
regarding the intentions, beliefs or current expectations of the
Directors or the Group concerning, among other things, the future
results of operations, financial condition, prospects, growth,
strategies of the Group and the industry in which it operates. No
assurance can be given that such future results will be achieved;
actual events or results may differ materially as a result of risks
and uncertainties facing the Group. Such risks and uncertainties
could cause actual results to vary materially from the future
results indicated, expressed, or implied in such forward-looking
statements.
Such forward-looking statements contained in this report are
current only as of the date of this report. The Company and the
Directors do not intend, and will not update any forward-looking
statements set forth in the document. You should interpret all
subsequent written or oral forward-looking statements attributable
to the Group or to persons acting on the Group's behalf as being
qualified by the cautionary statements in this report. As a result,
you should not place undue reliance on such forward -- looking
statements. This announcement may contain references to Vivo
Energy's website. These references are for convenience only and
Vivo Energy is not incorporating into this announcement any
material posted on www.vivoenergy.com.
INTERIM REPORT
For the six-month period ended 30 June 2021
Table of contents
Management's discussion and analysis 2
Overview of operations by segment 3
Retail 4
Commercial 5
Lubricants 6
Consolidated results of operations 7
Analysis of consolidated results of operations 7
Consolidated financial position 9
Liquidity and capital resources 10
Non-GAAP financial measures 11
Reconciliation of non-GAAP measures 12
Accounting and reporting developments 13
Risks and uncertainties 13
Interim condensed consolidated financial statements 15
Terms and abbreviations
Term Description Term Description
--------- ------------------------------- -------- -------------------------------
B2B Business to business H1 Six-month period 1 January
B2C Business to consumer IAS to 30 June
DPO Days payable outstanding IASB International Accounting
DSO Days sales outstanding IFRS Standards
DTR Disclosure Guidance IFRS International Accounting
and Transparency Rules IC Standards Board
EBIT Earnings before finance IPO International Financial
expense, finance income LPG Reporting Standards
EBITDA and income taxes LTIP IFRS Interpretations
Earnings before finance LTM Committee
expense, finance income, MD&A Initial public offering
EBT income taxes, depreciation NCI Liquefied petroleum
EPS and amortisation OCI gas
ESG Earnings before income PP&E Long-term incentive
ETR taxes QSR plan
EURIBOR Earnings per share RCF Last 12 months
FVTOCI Environmental, Social TCFD Management's discussion
and Governance and analysis
FVTPL Effective tax rate UK Non-controlling interest
FY Euro Interbank Offered US Other comprehensive
GAAP Rate VEI BV income
Fair value through other Property, plant and
comprehensive income equipment
Fair value through profit Quick service restaurant
and loss Revolving credit facility
Financial year Task Force on Climate-Related
Generally Accepted Accounting Financial Disclosure
Principles United Kingdom
United States
Vivo Energy Investments
B.V.
--------- ------------------------------- -------- -------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
This MD&A of financial condition and results of operations
is intended to convey management's perspective of Vivo Energy plc's
('Vivo Energy' or the 'Company') operational performance and
financial condition during the periods under review, as measured
under IFRS and non-GAAP measures. This MD&A is intended to
assist readers in understanding and interpreting the Company's
interim condensed consolidated financial statements and should,
therefore, be read in conjunction with the interim condensed
consolidated financial statements (included from page 15 onwards).
The results of operations and cash flows for the six-month period
are not necessarily indicative of the results of operations and
cash flows for the full fiscal year.
The financial information disclosed in this report is unaudited
and does not constitute statutory financial statements. Comparative
figures for the period 30 June 2020 were derived from the Interim
Report H1 2020. Comparative figures for the year ended 31 December
2020 were derived from the 2020 Annual Report and Accounts that was
delivered to the Registrar of Companies in England and Wales. These
accounts received an unqualified audit report which did not contain
a statement under section 498(2) or 498(3) of the UK Companies Act
2006.
All amounts in this report are expressed in millions of US
dollars, unless otherwise indicated.
Further insight into the Company, as well as financial and
operations reports, can be found on the investor relations section
of the Company's website at: http://investors.vivoenergy.com/ .
IFRS and non-GAAP measures
This MD&A contains both IFRS and non- GAAP measures.
Non-GAAP measures are defined and reconciled to the most comparable
IFRS measures on pages 11 and 12.
OVERVIEW OF OPERATIONS BY SEGMENT
Six-month Six-month
period period
ended ended Change
US$ million , unless 30 June 30 June
otherwise indicated 2021 2020
---------------------------- ---------- ---------- ---------
Volumes (million litres)
Retail 2,939 2,481 +18%
Commercial 1,995 2,071 -4%
Lubricants 75 66 +14 %
------------------------------ ---------- ---------- ---------
Total 5,009 4,618 +8%
------------------------------ ---------- ---------- ---------
Gross profit
Retail (including Non-fuel
retail) 217 152 +43%
Commercial 81 76 +7%
Lubricants 45 33 +36%
------------------------------ ---------- ---------- ---------
Total 343 261 +31%
------------------------------ ---------- ---------- ---------
Gross cash unit margin
($/'000 litres)
Retail fuel (excluding
Non-fuel retail) 78 66 +18%
Commercial 47 43 +9%
Lubricants 616 537 +15%
------------------------------ ---------- ---------- ---------
Total 77 65 +18%
------------------------------ ---------- ---------- ---------
Gross cash profit
Retail (including Non-fuel
retail) 244 176 +39%
Commercial 94 89 +6%
Lubricants 47 35 +34%
------------------------------ ---------- ---------- ---------
Total 385 300 +28%
------------------------------ ---------- ---------- ---------
Adjusted EBITDA
Retail 124 69 +80%
Commercial 58 46 +26%
Lubricants 38 25 +52%
------------------------------ ---------- ---------- ---------
Total 220 140 +57%
------------------------------ ---------- ---------- ---------
Non-GAAP measures are explained and reconciled on pages 11 and
12.
RETAIL
Volumes Gross Gross Cash Gross Cash Adjusted
( litres ) Profit Unit Profit EBITDA
Margin
(excl. Non-fuel
retail)
$ 78 /'000
2,939 million $ 217 million litres $ 244 million $124 million
-------------- ----------------- -------------- -------------
KEY PERFORMANCE INDICATORS
Six-month Six-month
period period
ended ended
US$ million, unless otherwise 30 June 30 June
indicated 2021 2020 Change
---------------------------------- ---------- ---------- -------
Volumes (million litres) 2,939 2,481 +18 %
Gross profit (including Non-fuel
retail) 217 152 +43 %
Gross cash unit margin ($/'000
litres) (excluding Non-fuel
retail) 78 66 +18 %
Retail fuel gross cash profit 229 164 +40 %
Non-fuel retail gross cash
profit 15 12 +25 %
Adjusted EBITDA 124 69 +80 %
------------------------------------ ---------- ---------- -------
ANALYSIS OF RESULTS
Half-year review existing sites as well as driving
Our Retail segment has continued premium fuels penetration. We
to perform well, with the recovery have made excellent progress
experienced in H2 2020 continuing towards our full year target,
through H1 2021. Mobility restrictions with overall 81 net new sites
in our markets evolved regularly opened in H1 2021. We continue
during the period in response to accelerate site openings
to the pandemic, but there was in our Engen-branded markets,
no return to the widespread adding 36 net new sites.
lockdowns experienced in H1 Gross cash unit margin for Retail
2020. This environment enabled fuel was 18% higher at $78 per
a significant improvement in thousand litres compared to
performance against the prior $66 per thousand litres in H1
year period, with volumes also 2020, which was negatively affected
in line with pre--pandemic levels by COVID-19 related inventory
in H1 2019 and gross cash profit impacts. As anticipated, unit
13% ahead of H1 2019. Due to margins began to normalise during
the improving performance, adjusted the period as the operating
EBITDA rose to $124 million, environment stabilised.
80% ahead of H1 2020 and slightly Non-fuel retail
ahead of H1 2019. The Group experienced a good
Retail fuel recovery in the Non--fuel retail
Retail fuel volumes were 18% segment with gross cash profit
higher than H1 2020, supported of $15 million in H1 2021, 25%
predominantly by lighter mobility higher than the prior period
restrictions in place during (H1 2020: $12 million) and in
the period compared to H1 2020 line with H1 2019. The lighter
when our markets were affected mobility restrictions and adaptation
by the first time response to of consumer behaviour towards
the COVID-19 pandemic. During the increased use of takeaway
the past six months, countries and delivery services in many
have primarily looked to regional of our markets has increased
restrictions and curfews to sales volumes in our food offerings.
manage COVID-19 rather than We continued to expand our offering,
full lockdowns, which has resulted by adding a net total of 44
in demand for Retail fuels returning convenience retail shops and
to near pre-pandemic levels 11 QSR outlets to our sites
in some countries. in H1 2021, and are looking
During the period, we have focused to expand the range of existing
on growing and enhancing our food partnerships in order to
network and offering to support drive future growth.
our recovery. We continue with
our 'Shining' programme, across
our Shell-branded markets, and
various other customer-led initiatives,
to support volume growth at
COMMERCIAL
Volumes Gross Gross Cash Gross Cash Adjusted
( litres ) Profit Unit Profit EBITDA
Margin
$ 47 /'000
1,995 million $ 81 million litres $ 94 million $ 58 million
------------- ----------- ------------- -------------
KEY PERFORMANCE INDICATORS
Six-month Six-month
period period
ended ended
30 June 30 June
US$ million, unless otherwise indicated 2021 2020 Change
------------------------------------------ ---------- ---------- -------
Volumes (million
litres) 1,995 2,071 -4%
Gross profit 81 76 +7%
Gross cash unit margin
($/'000 litres) 47 43 +9%
Gross cash profit 94 89 +6 %
Adjusted EBITDA 58 46 +26%
------------------------------------------ ---------- ---------- -------
ANALYSIS OF RESULTS
Half-year Gross cash unit
review margins increased
Our Commercial by 9% to $49 per
segment thousand litres
continued compared to the
to recover unit margin
with the of $45 per
underlying thousand litres
business in
returning to H1 2020 due to
volume the product mix
growth. and H1 2020 being
Overall impacted by
volumes negative
remained inventory effects
lower due to and
the impact hyperinflationary
from accounting.
the end of a Aviation and
large, Marine
low-margin The Aviation and
supply Marine business
contract and accounted for 16%
our Aviation (H1 2020:
business 15%) of total
continuing to Commercial
be subdued. volumes
Gross cash and 13% (H1 2020:
profit of $94 10%) of total
million Commercial gross
was 6% higher cash profit.
than H1 2020 Aviation and
and Marine volumes
slightly increased by 6%
behind H1 compared to
2019, as H1 2020. The
unit margins gross cash unit
improved, with margin also
H1 2020 increased by 19%
margins to $37 per
impacted by thousand litres
negative (H1
inventory 2020: $31 per
effects. thousand litres).
This Aviation volumes
contributed to remained subdued
the increased and were in line
adjusted with H1 2020,
EBITDA of $58 mainly due to the
million, continued
26% higher restrictions on
year--on--year international
. travel. Unit
Core margins were
Commercial significantly
Our Core higher than H1
Commercial 2020, which was
business meaningfully
supplies bulk impacted by
fuel to negative
customers inventory
in the effects.
transportation Marine volumes
, mining, saw a good
construction recovery
and power with volumes 12%
sectors, higher than
as well as LPG H1 2020, but were
to both still behind
consumers H1 2019. The
and industry. recovery is
Core mainly
Commercial attributable to
accounted for our continuing
84% (H1 2020: efforts to secure
85%) of total opportunistic
Commercial spot sales, which
volumes has a positive
and 87% (H1 impact on
2020: 90%) of volumes, however
total these
Commercial were at a lower
gross cash unit margin
profit. than those
Core achieved in H1
Commercial 2020.
volumes were
down 5% in H1
2021 due to
the
end of a large
supply
contract
in Q3 2020.
Excluding this
impact,
the business
was 4% higher
than
H1 2020, as
well as ahead
of
H1 2019, as
Commercial
fuel
volumes were
supported by
the
strong
performance in
the reseller
market and
other key
sectors,
partially
offset by
slightly
lower LPG
volumes
primarily
due to the
lower activity
in
the B2B
segment.
LUBRICANTS
Volumes Gross Gross Cash Gross Cash Adjusted
(litres) Profit Unit Profit EBITDA
Margin
$ 616 /'000
75 million $ 45 million litres $ 47 million $38 million
------------- ------------ ------------- ------------
KEY PERFORMANCE INDICATORS
Six-month Six-month
period period
ended ended
30 June 30 June
US$ million , unless otherwise indicated 2021 2020 Change
------------------------------------------- ---------- ---------- -------
Volumes (million litres) 75 66 +14%
Revenues 218 172 +27%
Gross profit 45 33 +36%
Gross cash unit margin
($/'000 litres) 616 537 +15%
Gross cash profit 47 35 +34 %
Adjusted EBITDA 38 25 +52%
------------------------------------------- ---------- ---------- -------
ANALYSIS OF RESULTS
Half-year review Unit margins
We delivered a increased to
strong performance $613
in the Lubricants per thousand
segment during litres
the first half of compared
the year. to $531 per
Volumes were 14% thousand
higher than litres
H1 2020 due to in H1 2020, as
strong performance demand
across all improved
businesses and for higher
were margin premium
also 14% ahead of products,
H1 2019. Gross together with
cash unit margin the temporary
was $616 per benefit from
thousand litres, the timing of
15% higher product
than H1 2020 ($537 price
per thousand increases to
litres), as a reflect the
result of the increase in
favourable product base oil
mix and the prices.
timing of product Commercial
price increases. lubricants
The higher volumes Our Commercial
and unit lubricants
margins led to business
gross cash profit provides
of $47 million, products to
with adjusted commercial
EBITDA at $38 customers
million, a across our
significant operating
improvement units as well
compared to the as export
prior period. customers.
Retail lubricants Commercial
Our Retail lubricants
lubricants accounted
business for 36% (H1
comprises 2020: 41%) of
forecourt sales to total
retail customers Lubricants
and sales through volumes and
distributors to gross
other consumers cash profit
(B2C). Retail accounted for
lubricants had 38%
a strong (H1 2020: 43%)
performance in H1 of total
2021, Lubricants
contributing 64% gross cash
of the total profit.
Lubricants volumes Volumes were
(H1 2020: in line with
59%) and 62% of H1
the total 2020 and 8%
Lubricants higher than H1
gross cash profit 2019,
(H1 2020: mainly due to
57%). the continued
Volumes were 23% demand from
higher than our mining
H1 2020 mainly due customers
to increased in a number of
traffic at sites our markets,
due to lighter as well as in
COVID-19 our export
restrictions in markets.
the Unit margins
current period, increased by
together with 15%
active selling on from $540 per
the forecourts thousand
and litres
consumer-focused in H1 2020 to
promotions. $621 per
thousand
litres in H1
2021, mostly
attributable
to favourable
product mix
and
spot sales.
CONSOLIDATED RESULTS OF OPERATIONS
SUMMARY INCOME STATEMENT
Six-month Six-month
period period
ended ended
30 June 30 June
US$ million 2021 2020 Change
---------------------------- ---------- ---------- -------
Revenues 3,989 3,375 +18%
Cost of sales (3,646) (3,114) +17%
------------------------------ ---------- ---------- -------
Gross profit 343 261 +31 %
------------------------------ ---------- ---------- -------
Selling and marketing
cost (112) (105) +7%
General and administrative
cost (88) (89) -1%
Share of profit of
joint ventures and
associates 13 9 +44%
Other income/(expense) (1) 1 -200%
------------------------------ ---------- ---------- -------
EBIT 155 77 +101 %
------------------------------ ---------- ---------- -------
Finance expense -
net (29) (35) -17%
EBT 126 42 +200 %
------------------------------ ---------- ---------- -------
Income taxes (50) (29) +72%
------------------------------ ---------- ---------- -------
Net income 76 13 +485 %
------------------------------ ---------- ---------- -------
Six-month Six-month
period period
Earnings per share ended 30 ended 30
(US$) June 2021 June 2020 Change
-------------------- ----------- ----------- -------
Basic 0.06 0.01 +500%
---------------------- ----------- ----------- -------
Diluted 0.06 0.01 +500%
---------------------- ----------- ----------- -------
NON-GAAP MEASURES
Six-month Six-month
period period
ended ended
US$ million, unless 30 June 30 June
otherwise indicated 2021 2020 Change
---------------------- ---------- ---------- -------
Volumes (million
litres) 5,009 4,618 +8%
Gross cash profit 385 300 +28%
EBITDA 219 136 +61 %
Adjusted EBITDA 220 140 +57 %
ETR (%) 40 % 69% n/a
Adjusted net income 77 16 +381 %
Adjusted diluted
EPS (US$) 0.06 0.01 +500%
------------------------ ---------- ---------- -------
Non-GAAP measures are explained and reconciled on pages 11 and
12.
ANALYSIS OF CONSOLIDATED RESULTS OF OPERATIONS
Volumes Revenues
Overall volumes continued to Group revenues for H1 2021 were
recover from the impact of COVID-19 $3,989 million, compared to
and were 8% higher than the $3,375 million in H1 2020. The
previous year. The positive increase primarily reflects
momentum experienced in H2 2020 the improving demand for our
continued in H1 2021, with a products due to the easing of
number of our markets returning COVID-19 restrictions, rising
to volume growth as mobility average crude oil prices and
restrictions were gradually appreciating local currencies.
eased. Volume growth was largely Cost of sales
driven by the recovery in the Cost of sales increased by $532
Retail segment, partially offset million, or 17%, to $3,646 million
by the end of a large supply in H1 2021. The increase is
contract, in the Commercial attributable to higher purchases
segment, to one of our markets to meet demand and increased
in 2020. cost of products due to the
higher crude oil prices.
Gross profit Adjusted EBITDA
Gross profit was $343 million, Adjusted EBITDA was $220 million,
up 31% year-on-year due to higher up 57% year--on--year. The increase
unit margins and growth in volumes is mainly due to higher unit
reflecting the continuing business margins and volumes together
recovery from the impact of with a higher share of profit
COVID-19. of joint ventures and associates,
Gross cash profit partially offset by higher selling
Gross cash profit increased and marketing expenses.
by 28% year-on-year to $385 Net finance expense
million, primarily driven by Net finance expense decreased
higher volumes and unit margins by 17% to $29 million from $35
compared to the previous year. million in 2020. The decrease
Gross cash unit margins of $77 is mainly explained by a decrease
per thousand litres were higher in interest on bank borrowings
than H1 2020 ($65 per thousand in H1 2021 due to lower utilisation
litres), which was negatively of working capital facilities
affected by COVID-19 related compared to the prior year.
inventory impacts and a $5 million In addition, H1 2020 was impacted
negative impact from hyperinflation by a mark--to--market loss on
accounting. Performance has interest rate swaps. These swaps
benefitted from the positive were settled as part of the
supply and pricing environment notes offering in H2 2020, which
and a higher margin product increased the maturity profile
mix. but has led to slightly higher
Selling and marketing cost interest on long-term debt.
Selling and marketing cost increased Income taxes
by $7 million to $112 million The ETR for the six months ended
compared to H1 2020, primarily 30 June 2021 is based on management's
due to the strategic decision estimate of the annual effective
to reduce marketing costs and income tax rate of 40%. The
non-essential spending at the ETR decreased to 40% from 69%
time. Other factors include compared to the comparative
the appreciation of local currencies period in 2020 (the actual income
and higher depreciation and tax expense was used as management's
amortisation expense. best estimate in 2020). This
General and administrative cost is predominantly due to the
General and administrative cost, lower relative impact of withholding
including special items, was tax and permanent items due
broadly in line with H1 2020 to the higher earnings before
at $88 million. Increased manpower tax of $126 million (H1 2020:
costs compared to H1 2020 were $42 million).
offset by lower community spending Net income
across the Group. Net income, including the impact
Share of profit of JVs and associates of special items, was $76 million,
Share of profit of joint ventures significantly higher than H1
and associates grew by 44% to 2020 (up from $13 million).
$13 million, mainly due to a Minority interest was $5 million
higher share of profit from (2020: $5 million).
Shell and Vivo Lubricants B.V. Earnings per share
and strong performance from Basic earnings per share amounted
our joint ventures in Morocco. to 6 US cents per share (H1
The Group experienced positive 2020: 1 US cent per share).
recovery in the QSR joint ventures Adjusted diluted earnings per
as mobility restrictions were share, excluding the impact
eased, further contributing of special items, were 6 US
to the year-on-year increase. cents per share (H1 2020: 1
US cent per share).
CONSOLIDATED FINANCIAL POSITION
Total assets
====================================================================
Total assets, including the impacts of foreign currency movements,
increased by $96 million and can largely be explained by:
* $97 million increase in trade receivables driven by
the increase in revenues and a higher crude oil price
compared to FY 2020 as well as the timing of receipts
from customers. Average monthly DSO(1) for the period
was 15 days (FY 2020: 16 days);
* $29 million increase in inventories mainly due to
higher crude oil prices compared to FY 2020. Average
inventory days for the period was 25 days (FY 2020:
29 days);
* $14 million increase in right-of-use assets resulting
from lease additions, of which the majority were
retail service stations, offset by depreciation for
the period; and
* $14 million increase in PP&E mainly attributable to
additions, partially offset by depreciation for the
period.
partially offset by:
* $56 million decrease in cash and cash equivalents
mainly due to the repayment of the RCF and payment of
dividends, partially offset by cash generated from
operating activities.
Total equity and liabilities
======================================================================
Total equity and liabilities, including foreign currency movements,
increased by $96 million and can largely be explained by:
* $85 million increase in trade payables mainly
attributable to purchases at higher crude oil prices,
partially offset by the timing of payments to
suppliers. Average monthly DPO(1) for the period was
55 days (FY 2020: 54 days);
* $33 million increase in equity mainly driven by the
profit for the period, partially offset by the
payment of the 2020 final dividend amounting to $48
million; and
* $11 million increase in other liabilities primarily
due to increases in other taxes payable, partially
offset by oil fund liabilities.
partially offset by:
* $39 million decrease in borrowings mainly due to the
repayment of the RCF, partially offset by higher bank
borrowing facilities outstanding at the end of the
period.
(1) DSO and DPO are based on monthly averages and on trade elements only.
LIQUIDITY AND CAPITAL RESOURCES
ADJUSTED FREE CASH FLOW
Six-month Six-month
period ended period ended
30 June 30 June
US$ million 2021 2020
------------------------------------------------ -------------- --------------
Net income 76 13
Adjustment for non-cash items and other 106 83
Current income tax paid (59) (41)
Net change in operating assets and liabilities
and other adjustments [1] 21 (167)
------------------------------------------------ -------------- --------------
Cash flow from operating activities 144 (112)
------------------------------------------------ -------------- --------------
Net additions of PP&E and intangible assets
[2] (60) (44)
------------------------------------------------ -------------- --------------
Free cash flow 84 (156)
------------------------------------------------ -------------- --------------
Special items [3] 6 10
------------------------------------------------ -------------- --------------
Adjusted free cash flow 90 (146)
------------------------------------------------ -------------- --------------
Adjusted free cash flow of $90 million was mainly driven by the
generated net income of $76 million, the adjustments for non-cash
items of $106 million as well as the positive net change in
operating assets and liabilities and other adjustments of $21
million, partially offset by current income tax paid of $59
million. The increase in the net change in operating assets and
liabilities and other adjustments is primarily attributable to the
normalisation of the operating environment compared to H1 2020,
which was also impacted by the timing of certain payments from
2019. Net additions in PP&E and intangible assets were higher
at $60 million, compared to $44 million in H1 2020 which was
impacted by the strategic slow-down in non-essential capital
expenditure. The Group's net additions in PP&E and intangible
assets included $34 million in Growth (H1 2020: $22 million), $22
million in Maintenance (H1 2020: $19 million), and $5 million in
Special Projects (H1 2020: $3 million), offset by $1 million
proceeds from disposals [4] .
_________________
[1] Net change in operating assets and liabilities and other
adjustments includes finance expense.
[2] Excluding cash flow from acquisition of businesses.
[3] Cash impact of special items. Special items are explained and reconciled on pages 11 to 12.
[4] Proceeds from disposals of $1m were offset under Special
Projects in H1 2020.
NET DEBT AND AVAILABLE LIQUIDITY
31 December
US$ million 30 June 2021 2020
-------------------------------------- ------------- ------------
Long-term debt (note 9) 349 408
Lease liabilities 153 143
-------------------------------------- ------------- ------------
Total debt excluding bank borrowings 502 551
-------------------------------------- ------------- ------------
Bank borrowings (note 9) 294 274
Less: cash and cash equivalents (459) (515)
-------------------------------------- ------------- ------------
Net debt 337 310
-------------------------------------- ------------- ------------
31 December
US$ million 30 June 2021 2020
---------------------------------------- ------------- ------------
Cash and cash equivalents 459 515
Available undrawn credit facilities 1,342 1,563
---------------------------------------- ------------- ------------
Available short-term capital resources 1,801 2,078
---------------------------------------- ------------- ------------
Net debt increased by $27 million due to the decrease in cash
and cash equivalents and higher bank borrowings and lease
liabilities, partially offset by a decrease in long-term debt. The
decrease in cash and cash equivalents was mainly due to the
repayment of the RCF and payment of dividends. The leverage ratio
at 30 June 2021 fell to 0.77x (FY 2020: 0.86x) as a result of
higher LTM adjusted EBITDA, partially offset by higher net debt.
The available undrawn credit facilities of $1,342 million (FY 2020:
$1,563 million) comprise $300 million of the undrawn committed
multi-currency RCF and $1,042 million of undrawn, unsecured and
uncommitted short--term bank facilities extended to our operating
entities for working capital purposes. The short--term bank
facilities include a large number of uncommitted facilities
(ranging from $1 million to $359 million). Total available
short-term capital resources are $1,801 million (FY 2020: $2,078
million).
NON-GAAP FINANCIAL MEASURES
Non-GAAP measures are not defined by International Financial
Reporting Standards (IFRS) and, therefore, may not be directly
comparable with other companies' non -- GAAP measures, including
those in our industry. Non--GAAP measures should be considered in
addition to, and are not intended to be a substitute for, or
superior to, IFRS measurements.
The exclusion of certain items from non -- GAAP performance
measures does not imply that these items are necessarily
non-recurring. From time to time, we may exclude additional items
if we believe doing so would result in a more transparent and
comparable disclosure.
The Directors believe that reporting non -- GAAP financial
measures in addition to IFRS measures provides users with an
enhanced understanding of results and related trends and increases
the transparency and clarity of the core results of our operations.
Non -- GAAP measures are used by the Directors and management for
performance analysis, planning, reporting and key management
performance measures.
Term Description Term Description
------------ ------------------------------- ------------- -------------------------------
Gross cash This is a measure Gross cash Gross cash profit per
profit of gross profit after unit margin unit. Unit is defined
direct operating expenses as 1,000 litres of sales
and before non-cash volume. This is a useful
depreciation and amortisation measure as it indicates
recognised in cost the incremental profit
of sales. Reference for each additional unit
to 'cash' in this sold.
measure refers to
non-cash depreciation
and amortisation as
opposed to the elimination
of working capital
movements. Gross cash
profit is a key management
performance measure.
------------ ------------------------------- ------------- -------------------------------
EBITDA Earnings before finance Adjusted EBITDA adjusted for the
expense, finance income, EBITDA impact of special items.
income tax, depreciation This is a useful measure
and amortisation. as it provides the Group's
This measure provides operating profitability
the Group's operating and results, before non-cash
profitability and charges, and is an indicator
results before non-cash of the core operations,
charges and is a key exclusive of special items.
management performance
measure.
------------ ------------------------------- ------------- -------------------------------
Adjusted Net income adjusted Adjusted Diluted EPS adjusted for
net income for the impact of diluted the impact of special
special items. EPS items.
------------ ------------------------------- ------------- -------------------------------
Special Income or charges Adjusted Cash flow from operating
items that are not considered free cash activities less net additions
to represent the underlying flow to PP&E and intangible
operational performance assets and excluding the
and, based on their impact of special items.
significance in size This is a key operational
or nature, are presented liquidity measure, as
separately to provide it indicates the cash
further understanding available to pay dividends,
of the financial and repay debt or make further
operational performance. investments in the Group.
------------ ------------------------------- ------------- -------------------------------
Net debt Total borrowings and Leverage Net debt, including lease
lease liabilities ratio liabilities, divided by
less cash and cash last 12 months adjusted
equivalents. EBITDA.
------------ ------------------------------- ------------- -------------------------------
RECONCILIATION OF NON-GAAP MEASURES
Six-month period ended
----------------------------
US$ million , unless otherwise indicated 30 June 2021 30 June 2020
---------------------------------------------------------- ------------- -------------
Gross profit 343 261
---------------------------------------------------------- ------------- -------------
Add back: depreciation and amortisation in cost of sales 42 39
---------------------------------------------------------- ------------- -------------
Gross cash profit 385 300
---------------------------------------------------------- ------------- -------------
Volume (million litres) 5,009 4,618
---------------------------------------------------------- ------------- -------------
Gross cash unit margin ($/'000 litres) 77 65
---------------------------------------------------------- ------------- -------------
Six-month period ended
----------------------------
US$ million 30 June 2021 30 June 2020
---------------------------------------------------- ------------- -------------
EBT 126 42
---------------------------------------------------- ------------- -------------
Finance expense - net 29 35
---------------------------------------------------- ------------- -------------
EBIT 155 77
---------------------------------------------------- ------------- -------------
Depreciation, amortisation and impairment 64 59
---------------------------------------------------- ------------- -------------
EBITDA 219 136
---------------------------------------------------- ------------- -------------
Adjustments to EBITDA related to special items:
IPO(1) and Engen acquisition related expenses(2) 1 2
Hyperinflation(3) - 4
Management Equity Plan(4) - (2)
Adjusted EBITDA 220 140
---------------------------------------------------- ------------- -------------
Six-month period ended
----------------------------
US$ million 30 June 2021 30 June 2020
------------------------------------------------------- ------------- -------------
Net income 76 13
------------------------------------------------------- ------------- -------------
Adjustments to net income related to special items:
IPO [1] and Engen acquisition related expenses [2] 1 2
Hyperinflation [3] - 4
Management Equity Plan [4] - (2)
Tax on special items - (1)
Adjusted net income 77 16
------------------------------------------------------- ------------- -------------
Six-month period ended
----------------------------
US$ 30 June 2021 30 June 2020
------------------------------------- ------------- -------------
Diluted earnings per share 0.06 0.01
Impact of special items - -
------------------------------------- ------------- -------------
Adjusted diluted earnings per share 0.06 0.01
------------------------------------- ------------- -------------
For the reconciliation of adjusted free cash flow and net debt,
refer to page 10.
___________________
[1] IPO related items in 2021 and 2020 concern the IPO Share
Award Plan which are accrued for over the vesting period.
[2] On 1 March 2019 Vivo Energy Investments B.V., a subsidiary
of the Group, acquired 100% of the issued shares in Vivo Energy
Overseas Holdings Limited (formerly known as Engen International
Holdings (Mauritius) Limited). The cost of the acquisition and
related integration project expenses are treated as special
items.
[3] The impacts of accounting for hyperinflation for Vivo Energy
Zimbabwe, in accordance with IAS 29, are treated as special items
since they are not considered to represent the underlying
operational performance of the Group and based on their
significance in size and unusual nature are excluded as the local
currency depreciation against the US dollar does not align to the
published inflation rates during the period.
[4] The Management Equity Plan vested at IPO in May 2018 and was
exercisable on the first anniversary of admission for a period of
24 months. Changes in the fair value of the cash-settled
share-based plan do not form part of the core operational business
activities and performance and should, therefore, be treated as a
special item. The costs of share-based payment schemes introduced
after the IPO are not treated as special items.
ACCOUNTING AND REPORTING DEVELOPMENTS
The following amendments and new interpretations to the
standards effective for annual periods beginning on or after 1
January 2021 have been applied in preparing the interim condensed
consolidated financial statements and have no material impact for
the Group:
- Amendments to IFRS 16 COVID-19 related rent concessions (May 2020)
- Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7)
The impact of the decision made by the IFRS IC in April 2021 on
the treatment of cloud computing costs is under assessment. There
are no other standards, amendments and interpretations which are
effective for the financial year beginning on 1 January 2021 that
have a material impact on the interim condensed consolidated
financial statements of the Group.
RISKS AND UNCERTAINTIES
Risk management is embedded in the operational responsibilities
of our teams and is an integral part of our overall governance,
planning and decision-making. The Group continues to be exposed to
a number of risks and has an established and structured approach to
identify, assess and manage those risks. Details of the principal
risks facing the Group's businesses were included on pages 62 to 69
of the 2020 Annual Report and Accounts and are set out below, with
all of these remaining applicable.
-- Partner reputation and relationships
-- Criminal activity, fraud, bribery and compliance risk
-- Oil price fluctuations
-- Currency exchange risk
-- Health and safety
-- Economic and governmental instability
-- Product availability and supply
-- Business concentration risk
-- Information technology risk
-- Acquisition integration
-- Climate change
-- Epidemic
-- Credit management
-- Human resources and talent management
The Board of Directors has assessed the continuous impacts of
COVID-19 on these principal risk factors over the first six months
of 2021 and the expected impact for the remaining six months of the
year. In our last Annual Report and Accounts, as well as our market
communications in 2020 and 2021, we detailed our response to
COVID-19. We continuously adapt the management of our critical
operational and finance activities, enabling the Group to manage
risks as they arise or evolve. All mitigation plans remain
applicable for the duration of the pandemic and are adapted to the
evolving business environment and measures taken by authorities in
the countries where we operate.
Africa is currently facing a third wave of COVID-19 and the
World Health Organization (WHO) has warned that its spread is
accelerating such that it could soon surpass the peak of the second
wave of early 2021. The largest recorded increases in case numbers
have been experienced primarily in the countries of southern and
eastern Africa, including Zambia and Uganda, but also in Tunisia.
Furthermore, vaccination programmes in the majority of our
operating countries are in their early stages. Consequently, the
pandemic continues to slow the recovery of these economies, which
has an impact on government finances (increasing government debts)
as well as local companies and individual financial security. These
negative trends may impact our exposure to credit risks.
On a more positive note, the lower volatility observed in the
oil markets, and currencies for some of the countries where we
operate, is expected to continue throughout 2021, which reduces our
related risk exposure, in particular on stock losses.
Climate change continues to attract increased attention, with
new reporting requirements coming into force in 2021. The recently
created ESG & Climate Management Committee, chaired by the CEO,
has the r esponsibility to guide the Group 's climate change
response, ensuring the Group is able to meet regulatory
requirements linked to climate--related risks and opportunities
disclosure required under the TCFD while beginning to embed climate
change into decision making in the Group.
A specific focus has been placed on GHG (greenhouse gas) e missi
ons (CO(2) equivalent in kilotonnes ) reporting this year. GHG
emissions are being added to the standard scope of the internal
audit mandates in our operating countries. This includes a
systematic review of the carbon emissions-related data
identification, collection, consolidation and reporting in each
operating country with the objective to review the traceability of
the data source to provide reasonable assurance on the reported
data quality, integrity, completeness and consistency.
We have not observed any significant changes in our exposure to
the other principal risk factors. As part of the Group's risk
management framework we continue to consider changes in the nature,
likelihood and impact of existing risks, as well as new and
emerging risks.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six-month period ended 30 June 2021
Table of contents
Consolidated interim statement of comprehensive income
Consolidated interim statement of financial position
Consolidated interim statement of changes in equity
Consolidated interim statement of cash flows
Notes to the interim condensed consolidated financial
statements
1. ..... General information
2. ..... Basis of preparation
3. ..... Financial instruments by category 2
4. ..... Segment reporting
5. ..... Finance income and expense
6. ..... Income taxes
7. ..... Earnings per share
8. ..... Inventories
9. ..... Borrowings
10. .. Net change in operating assets and liabilities and other
adjustments
11. .. Contingencies
12. .. Related parties
13. .. Events after balance sheet period
Responsibility statement
Independent review report to Vivo Energy plc
CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME
Six-month period
ended
-------------------
30 June 30 June
US$ million Notes 2021 2020
------------------------------------------- ------ --------- --------
Revenues 4 3,989 3,375
Cost of sales (3,646) (3,114)
-------------------------------------------- ------ --------- --------
Gross profit 4 343 261
-------------------------------------------- ------ --------- --------
Selling and marketing cost (112) (105)
General and administrative cost (88) (89)
Share of profit of joint ventures and
associates 13 9
Other income/(expense) (1) 1
-------------------------------------------- ------ --------- --------
EBIT 4 155 77
-------------------------------------------- ------ --------- --------
Finance income 5 5
Finance expense (34) (40)
-------------------------------------------- ------ --------- --------
Finance expense - net 5 (29) (35)
EBT 4 126 42
-------------------------------------------- ------ --------- --------
Income taxes 6 (50) (29)
-------------------------------------------- ------ --------- --------
Net income 4 76 13
-------------------------------------------- ------ --------- --------
Net income attributable to:
------------------------------------------- ------ --------- --------
Equity holders of Vivo Energy plc 71 8
Non-controlling interest (NCI) 5 5
-------------------------------------------- ------ --------- --------
76 13
------------------------------------------- ------ --------- --------
Other comprehensive income (OCI)
------------------------------------------- ------ --------- --------
Items that may be reclassified to profit
or loss
Currency translation differences (3) (48)
Net investment hedge gain/(loss) 5 (3)
Items that are never reclassified to
profit or loss
Re-measurement of retirement benefits 1 (4)
Income tax relating to retirement
benefits - 1
Change in fair value of financial
instruments through OCI, net of tax 2 1
Other comprehensive income, net of
tax 5 (53)
-------------------------------------------- ------ --------- --------
Total comprehensive income 81 (40)
-------------------------------------------- ------ --------- --------
Total comprehensive income attributable
to:
------------------------------------------- ------ --------- --------
Equity holders of Vivo Energy plc 77 (38)
Non-controlling interest (NCI) 4 (2)
-------------------------------------------- ------ --------- --------
81 (40)
------------------------------------------- ------ --------- --------
Earnings per share (US$) 7
-------------------------------------------- ------ --------- --------
Basic 0.06 0.01
Diluted 0.06 0.01
-------------------------------------------- ------ --------- --------
The notes are an integral part of these interim
condensed consolidated financial statements.
NON-GAAP FINANCIAL MEASURES [1]
Six-month period
ended
-------------------
30 June 30 June
US$ million , unless otherwise indicated 2021 2020
------------------------------------------- ------ --------- --------
EBITDA 219 136
Adjusted EBITDA 220 140
Adjusted net income 77 16
Adjusted diluted EPS (US$) 0.06 0.01
-------------------------------------------- ------ --------- --------
(1) Refer to the non-GAAP financial measures definitions and
reconciliations to the most comparable IFRS measures on pages 11
and 12.
CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
31 December
US$ million Notes 30 June 2021 2020
---------------------------------------- ------ ------------- ------------
Assets
---------------------------------------- ------ ------------- ------------
Non-current assets
Property, plant and equipment 903 889
Right-of-use assets 215 201
Intangible assets 218 222
Investments in joint ventures and
associates 238 231
Deferred income taxes 52 46
Financial assets at fair value through
other comprehensive income 13 12
Other assets 117 117
---------------------------------------- ------
1,756 1,718
---------------------------------------- ------ ------------- ------------
Current assets
Inventories 8 509 480
Trade receivables 441 344
Other assets 186 200
Income tax receivables 13 11
Cash and cash equivalents 459 515
---------------------------------------- ------ ------------- ------------
1,608 1,550
---------------------------------------- ------ ------------- ------------
Total assets 3,364 3,268
---------------------------------------- ------ ------------- ------------
Equity
Share capital 633 633
Share premium 4 4
Retained earnings 285 252
Other reserves (125) (122)
Attributable to equity holders of
Vivo Energy plc 797 767
Non-controlling interest 48 45
845 812
---------------------------------------- ------ ------------- ------------
Liabilities
---------------------------------------- ------ ------------- ------------
Non-current liabilities
Lease liabilities 125 119
Borrowings 9 354 412
Provisions 103 104
Deferred income taxes 83 72
Other liabilities 156 165
---------------------------------------- ------ -------------
821 872
---------------------------------------- ------ ------------- ------------
Current liabilities
Lease liabilities 28 24
Trade payables 1,133 1,048
Borrowings 9 289 270
Provisions 19 16
Other financial liabilities 2 9
Other liabilities 191 171
Income tax payables 36 46
---------------------------------------- ------ ------------- ------------
1,698 1,584
---------------------------------------- ------ ------------- ------------
Total liabilities 2,519 2,456
---------------------------------------- ------ ------------- ------------
Total equity and liabilities 3,364 3,268
---------------------------------------- ------ ------------- ------------
The notes are an integral part of these interim condensed
consolidated financial statements.
CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
For the six-month period ended 30 June 2021
---------------------------- ---------------------------------------------------------------------------------------------------------
Attributable to equity holders of Vivo Energy plc
--------
Other reserves
Equity
settled
Reserves Currency Fair incentive
Share Share Retained [1] (, Retirement translation value schemes Total
US$ million capital premium earnings [2]) benefits difference reserves [3] Total NCI equity
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Balance at 1 January 2021 633 4 252 (54) (2) (79) 3 10 767 45 812
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Net income - - 71 - - - - - 71 5 76
Other comprehensive income - - - (1) 1 4 2 - 6 (1) 5
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Total comprehensive income - - 71 (1) 1 4 2 - 77 4 81
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Share-based expense - - - - - - - 2 2 - 2
Share awards transactions - - 6 (5) - - - (6) (5) - (5)
Net impact of IAS 29 [4] - - 4 - - - - - 4 - 4
Dividends paid [5] - - (48) - - - - - (48) (1) (49)
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Balance at 30 June 2021 633 4 285 (60) (1) (75) 5 6 797 48 845
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
For the six-month period ended 30 June 2020
---------------------------- --------------------------------------------------------------------------------------------------------------------
Attributable to equity holders of Vivo Energy plc
--------
Other reserves
Equity
settled
Currency Fair incentive
Share Share Retained Retirement translation value schemes Total
US$ million capital premium earnings Reserves1 benefits difference reserves (3) Total NCI equity
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Balance at 1 January 2020 633 4 199 (54) 2 (43) 2 8 751 53 804
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Net income - - 8 - - - - - 8 5 13
Other comprehensive income - - - - (3) (44) 1 - (46) (7) (53)
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Total comprehensive income - - 8 - (3) (44) 1 - (38) (2) (40)
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Share-based expense - - - - - - - 1 1 - 1
Net impact of IAS 29 4 - - (6) - - - - - (6) - (6)
Dividends paid/declared - - - - - - - - - (3) (3)
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
Balance at 30 June 2020 633 4 201 (54) (1) (87) 3 9 708 48 756
---------------------------- -------- -------- --------- ---------- ----------- ------------ --------- ---------- ------ ---- -------
The notes are an integral part of these interim condensed
consolidated financial statements.
__________________________
[1] Included in reserves is a merger reserve ($82m) relating to
the premium on shares issued as part of the consideration of the
acquisition of Vivo Energy Overseas Holdings Limited, formerly
known as Engen International Holdings (Mauritius) Limited in March
2019.
[2] Included in reserves is a cost of hedging reserve ($1m)
reclassified from currency translation difference reserve. Reserves
include $5m related to market purchases of ordinary shares of the
Company to satisfy option exercises under the Company's IPO Share
Award
Plan and Long-Term Incentive Plan ('LTIP').
[3] Equity settled incentive schemes include the LTIP and the
IPO Share Award Plan (fully vested in 2021).
[4] The net impact on retained earnings as a result of the
index-based adjustments in Zimbabwe under IAS 29 'Financial
Reporting in Hyperinflationary Economies'.
[5] The dividends paid to the equity holders of Vivo Energy plc
were paid out of distributable reserves.
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
Six-month period ended
-------------------------
30 June 30 June
US$ million Notes 2021 2020
---------------------------------------------- ------ ------------ -----------
Operating activities
Net income 76 13
Adjustment for:
Income taxes 50 29
Amortisation, depreciation and impairment 64 59
Net gain on disposal of PP&E and intangible
assets - (1)
Share of profit of joint ventures
and associates (13) (9)
Dividends received from joint ventures
and associates 5 5
Current income tax paid (59) (41)
Net change in operating assets and
liabilities and other adjustments 10 21 (167)
Cash flows from operating activities 144 (112)
---------------------------------------------- ------ ------------ -----------
Investing activities
Acquisition of businesses, net of
cash acquired - (9)
Purchases of PP&E and intangible assets (61) (45)
Proceeds from disposals of PP&E and
intangible assets 1 1
---------------------------------------------- ------ ------------ -----------
Cash flows from investing activities (60) (53)
---------------------------------------------- ------ ------------ -----------
Financing activities
Proceeds from long-term debt - 110
Repayments of long-term debt (60) (41)
Net (repayments)/proceeds (of)/from
bank and other borrowings 19 99
Repayment of lease liabilities (17) (14)
Dividends paid (49) (2)
Interest paid (30) (28)
Cash flows from financing activities (137) 124
---------------------------------------------- ------ ------------ -----------
Effect of exchange rate changes on
cash and cash equivalents (3) (16)
---------------------------------------------- ------ ------------ -----------
Net decrease in cash and cash equivalents (56) (57)
---------------------------------------------- ------ ------------ -----------
Cash and cash equivalents at beginning
of period 515 517
---------------------------------------------- ------ ------------ -----------
Cash and cash equivalents at end of
period 459 460
---------------------------------------------- ------ ------------ -----------
The notes are an integral part of these interim condensed
consolidated financial statements.
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
1. General information
Vivo Energy plc ('Vivo Energy' or the 'Company'), a public
limited company, was incorporated on 12 March 2018 in the United
Kingdom. The Company is registered in England and Wales and is
limited by shares (Registration number 11250655) under the
Companies Act 2006. The Company is listed on the London Stock
Exchange Main Market for listed securities and the Main Board of
the securities exchange operated by the Johannesburg Stock Exchange
by way of secondary inward listing. References to 'Vivo Energy' or
the 'Group' mean the Company and its subsidiaries and subsidiary
undertakings. These interim condensed consolidated financial
statements as at and for the six-month period ended 30 June 2021
comprise of the Company, its subsidiaries and subsidiary
undertakings, joint ventures and associates.
Vivo Energy distributes and sells fuel and lubricants to retail
and commercial consumers in Africa and trades under brands owned by
the Shell and Engen groups of companies and, for aviation fuels
only, under the Vitol Aviation brand. Furthermore, Vivo Energy
generates revenue from Non-fuel retail activities including
convenience retail and quick service restaurants by leveraging on
its retail network.
2. Basis of preparation
The Company's interim condensed consolidated financial
statements have been prepared in accordance with the UK-adopted
International Accounting Standard 34, 'Interim Financial Reporting'
and the Disclosure Guidance and Transparency Rules (DTR) sourcebook
of the United Kingdom's Financial Conduct Authority. The interim
condensed consolidated financial statements have been prepared
under the historical cost convention unless otherwise
indicated.
These interim condensed financial statements should be read in
conjunction with the annual financial statements for the year ended
31 December 2020, which have been prepared in accordance with
International Accounting Standards in conformity with the
requirements of the Companies Act 2006 and the International
Financial Reporting Standards (IFRS) pursuant to Regulation EC No.
1606/2002 as it applies in the European Union.
The Group has considered the impact of COVID-19 and the current
economic environment in relation to the going concern basis of
preparation for the interim condensed consolidated financial
statements. The impact of COVID-19 as experienced in the prior year
is not expected to be as severe in the current period. A detailed
analysis assessing the Group's financial and operating performance
indicates positive future trends and growth for the Group with
increasing sales volumes, gross cash profit and positive cash
inflows. The Group maintains sufficient liquidity headroom, through
operating cash generation as well as committed and uncommitted
credit facilities, to sustain future business operations. The
Directors therefore continue to consider it appropriate to adopt
the going concern basis of accounting in preparing interim
condensed consolidated financial statements. At the time of
approving the interim condensed consolidated financial statements,
the Directors maintain a reasonable expectation that the Group will
have adequate resources to continue in operational existence for
the foreseeable future.
The preparation of the interim condensed consolidated financial
statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the
disclosure of contingent assets and liabilities at the end of the
reporting period and the reported amounts of revenues and expenses
during the reporting period. Actual results may vary from these
estimates. The estimates and underlying assumptions, as disclosed
in the 2020 Annual Report and Accounts, are reviewed on an ongoing
basis. During the period there were no changes to estimates which
require significant judgement by management and no new significant
judgements or estimates have been identified.
In preparing the interim condensed consolidated financial
statements, the Group has considered the impact that climate change
may have on key accounting judgements and estimates including asset
useful economic lives and asset valuations and impairments. The
Group continues to introduce initiatives designed to reduce the
carbon emissions from its direct operations and develop alternative
product offerings, the Group considers that the transition towards
a low-carbon economy in its primary markets will be over a longer
time period than will be seen in the UK and the European Union. As
a result, the Group considers that the market for oil products
across Africa will continue to grow within its medium -- term
planning horizons and this assumption is embedded within the
Group's five-year strategic business plan which in turn supports a
number of key forward-looking accounting judgements and
estimates.
The interim condensed consolidated financial statements follow
the same accounting policies as those in the Vivo Energy plc 2020
Annual Report. There has been no impact as a result of preparing
the interim condensed consolidated financial statements under the
International Accounting Standards as adopted by the United
Kingdom.
New standards, amendments and interpretations
The Group has applied a number of amendments to IFRS standards
issued by the IASB that are mandatorily effective for annual
periods beginning on or after 1 January 2021. The Group's financial
statements have been prepared in accordance with these standards,
which have no material impact on the consolidated interim financial
statements of the Group:
- Amendments to IFRS 16 COVID-19 related rent concessions (May 2020)
- Interest Rate Benchmark Reform Phase 2 (Amendments to IFRS 9, IAS 39 and IFRS 7)
The impact of the decision made by the IFRS IC in April 2021 on
the treatment of cloud computing costs is under assessment. There
are no other IFRS standards, amendments or IFRS IC interpretations
that are not yet effective which would be expected to have a
material impact on the Group.
3. Financial instruments by category
The table below sets out the Group's classification of each
class of financial assets and financial liabilities and their fair
values for the current and the comparative period:
30 June 2021
---------------------------- ------------------------------------------------ -----------------------------
Total
US$ million Measured at amortised cost Measured at FVTOCI carrying value Fair value
---------------------------- --------------------------- ------------------- ---------------- -----------
Financial assets
---------------------------- --------------------------- ------------------- ---------------- -----------
Trade receivables ([1]) 441 - 441 441
Cash and cash equivalents 459 - 459 459
Financial assets at FVTOCI - 13 13 13
Other assets ([2]) 125 - 125 125
Total 1,025 13 1,038 1,038
----------------------------- --------------------------- ------------------- ---------------- -----------
30 June 2021
----------------------------- ---- --- -------------- ----------- -------------------------------
Measured
at amortised Measured Total
US$ million cost at FVTPL carrying value Fair value
------------------------------ ---- ------------------ ----------- ---------------- -------------
Financial liabilities
------------------------------ ---- ------------------ ----------- ---------------- -------------
Trade payables 1,133 - 1,133 1,133
Borrowings 643 - 643 669
Other liabilities [3] 212 - 212 212
Lease liabilities 153 - 153 153
Other financial liabilities - 2 2 2
Total 2,141 2 2,143 2,169
------------------------------------ -------------- ----------- ---------------- -------------
31 December 2020
------------------------------ ---- ------------------------------- -------------------------------
Measured
at amortised Measured Total
US$ million cost at FVTOCI carrying value Fair value
------------------------------ ---- ------------------ ----------- ---------------- -------------
Financial assets
------------------------------ ---- ------------------ ----------- ---------------- -------------
Trade receivables(1) 344 - 344 344
Cash and cash equivalents 515 - 515 515
Financial assets at FVTOCI - 12 12 12
Other assets(2) 127 - 127 127
Total 986 12 998 998
------------------------------ ---- ------------------ ----------- ---------------- -------------
31 December 2020
----------------------------- --------------------------- ------------------ -------------------------------
Total
US$ million Measured at amortised cost Measured at FVTPL carrying value Fair value
----------------------------- --------------------------- ------------------ ---------------- -------------
Financial liabilities
----------------------------- --------------------------- ------------------ ---------------- -------------
Trade payables 1,048 - 1,048 1,048
Borrowings 682 - 682 707
Other liabilities(3) 215 - 215 215
Lease liabilities 143 - 143 143
Other financial liabilities - 9 9 9
------------------------------ --------------------------- ------------------ ---------------- -------------
Total 2,088 9 2,097 2,122
------------------------------ --------------------------- ------------------ ---------------- -------------
______
[1] Trade receivables include credit secured receivables of $219m (2020: $180m).
[2] Other assets exclude the following elements that do not
qualify as financial instruments: prepayments, VAT
and duties receivable and other government benefits receivable.
[3] Other liabilities exclude the elements that do not qualify as financial instruments.
The Group has classified equity investments as financial
instruments at FVTOCI (without recycling). These investments are
measured using inputs for the assets or liabilities that are in the
absence of observable market data, based on net asset value of the
related investments (level 3 in the IFRS 13 'Fair Value
Measurement' hierarchy) which management considers to best
represent the fair value of the associated investment given its
nature. Since the value is based on the net asset value of the
related investment, no sensitivity analysis is presented. There
were no changes made during the period to valuation methods or the
processes to determine classification and no transfers were made
between the levels in the fair value hierarchy.
4. Segment reporting
The Group operates under three reportable segments: Retail,
Commercial and Lubricants.
Retail segment - Retail fuel is aggregated with Non-fuel
revenue. Both operating streams derive revenue from retail
customers who visit our retail sites. Retail fuel and Non-fuel
revenues are aggregated as the segments are managed as one unit and
have similar customers. The economic indicators that have been
addressed in determining that the aggregated segments have similar
economic characteristics are that they have similar expected future
financial performance and similar operating and competitive
risks.
Commercial segment - Commercial fuel, LPG, Aviation and Marine
are aggregated in the Commercial segment as the operating segments
derive revenues from commercial customers. The segments have
similar economic characteristics. The economic indicators that have
been addressed are the long-term growth and average long-term gross
margin percentage.
Lubricants segment - Retail, B2C, B2B and Export Lubricants are
the remaining operating segments. Since these operating segments
meet the majority of aggregation criteria, they are aggregated in
the Lubricants segment.
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision makers.
The Directors monitor the operating results of the business units
separately for the purpose of making decisions about resource
allocation, segment performance assessment and interacting with
segment managers.
The following tables present revenues and profit information
regarding the Group's operating segments:
Six-month period ended 30 June 2021
------------------------------------------------
US$ million Retail Commercial Lubricants Consolidated
----------------------------------------- ------- ----------- ----------- -------------
Revenue from external customers 2,604 1,167 218 3,989
Gross profit 217 81 45 343
Add back: depreciation and amortisation 27 13 2 42
Gross cash profit 244 94 47 385
Adjusted EBITDA 124 58 38 220
----------------------------------------- ------- ----------- ----------- -------------
Six-month period ended 30 June 2020
------------------------------------------------
US$ million Retail Commercial Lubricants Consolidated
----------------------------------------- ------- ----------- ----------- -------------
Revenue from external customers 2,094 1,109 172 3,375
Gross profit 152 76 33 261
Add back: depreciation and amortisation 24 13 2 39
Gross cash profit 176 89 35 300
Adjusted EBITDA 69 46 25 140
----------------------------------------- ------- ----------- ----------- -------------
Six-month period ended
----------------------------
US$ million 30 June 2021 30 June 2020
---------------------------------------- ------------- -------------
Share of profit of joint ventures and
associates included in segment EBITDA
---------------------------------------- ------------- -------------
Lubricants 8 6
Commercial 3 1
Retail 2 2
Total 13 9
---------------------------------------- ------------- -------------
The amount of revenues from external customers by location of
the customers is shown in the table below.
Six-month period ended
----------------------------
US$ million 30 June 2021 30 June 2020
---------------------------------------------- ------------- -------------
Revenue from external customers by principal
country
---------------------------------------------- ------------- -------------
Kenya 707 616
Morocco 666 498
Senegal 335 229
Other 2,281 2,032
---------------------------------------------- ------------- -------------
Total 3,989 3,375
---------------------------------------------- ------------- -------------
The amount of non-current assets held by country is shown in the
table below.
US$ million 30 June 2021 31 December 2020
------------------------------------------------------------------ -------------- -----------------
Non-current assets by principal country (excluding deferred tax)
------------------------------------------------------------------ -------------- -----------------
Morocco 251 245
The Netherlands 248 232
Kenya 158 153
Other 1,047 1,042
------------------------------------------------------------------ -------------- -----------------
Total 1,704 1,672
------------------------------------------------------------------ -------------- -----------------
Reconciliation of non-GAAP measures
Non-GAAP measures are not defined by International Financial
Reporting Standards and, therefore, may not be directly comparable
with other companies' non-GAAP measures, including those in the
Group's industry. Non--GAAP measures should be considered in
addition to, and are not intended to be a substitute for, or
superior to, IFRS measurements. The exclusion of certain items
(special items) from non-GAAP performance measures does not imply
that these items are necessarily non-recurring. From time to time,
we may exclude additional items if we believe doing so would result
in a more transparent and comparable disclosure.
The Directors believe that reporting non-GAAP financial measures
in addition to IFRS measures, as well as the exclusion of special
items, provides users with enhanced understanding of results and
related trends and increases the transparency and clarity of the
core results of operations. Non-GAAP measures are used by the
Directors and management for performance analysis, planning,
reporting and are used in determining senior management
remuneration. Further explanation of all non-GAAP measures can be
found on page 11.
Six-month period ended
US$ million 30 June 2021 30 June 2020
-------------------------------------------- ------------- -------------
EBT 126 42
-------------------------------------------- ------------- -------------
Finance expense - net 29 35
-------------------------------------------- ------------- -------------
EBIT 155 77
-------------------------------------------- ------------- -------------
Depreciation, amortisation and impairment 64 59
-------------------------------------------- ------------- -------------
EBITDA 219 136
-------------------------------------------- ------------- -------------
Adjustments to EBITDA related to special
items:
IPO(1) and Engen acquisition related
expenses(2) 1 2
Hyperinflation(3) - 4
Management Equity Plan(4) - (2)
Adjusted EBITDA 220 140
-------------------------------------------- ------------- -------------
Six-month period ended
US$ million 30 June 2021 30 June 2020
---------------------------------------- ------------- -------------
Net income 76 13
---------------------------------------- ------------- -------------
Adjustments to net income related to
special items:
IPO [1] and Engen acquisition related
expenses [2] 1 2
Hyperinflation [3] - 4
Management Equity Plan [4] - (2)
Tax on special items - (1)
Adjusted net income 77 16
---------------------------------------- ------------- -------------
Six-month period ended
US$ 30 June 2021 30 June 2020
---------------------------------------- ------------- -------------
Diluted earnings per share (note 7) 0.06 0.01
Impact of special items - -
Adjusted diluted earnings per share 0.06 0.01
---------------------------------------- ------------- -------------
_______________
[1] IPO related items in 2021 and 2020 concern the IPO Share
Award Plan which are accrued for over the vesting period.
[2] On 1 March 2019 Vivo Energy Investments B.V., a subsidiary
of the Group, acquired 100% of the issued shares in Vivo Energy
Overseas Holdings Limited (formerly known as Engen International
Holdings (Mauritius) Limited). The cost of the acquisition and
related integration project expenses are treated as special
items.
[3] The impacts of accounting for hyperinflation for Vivo Energy
Zimbabwe, in accordance with IAS 29, are treated as special items
since they are not considered to represent the underlying
operational performance of the Group and based on their
significance in size and unusual nature are excluded as the local
currency depreciation against the US dollar does not align to the
published inflation rates during the period.
[4] The Management Equity Plan vested at IPO in May 2018 and was
exercisable on the first anniversary of admission for a period of
24 months. Changes in the fair value of the cash-settled
share-based plan do not form part of the core operational business
activities and performance and should, therefore, be treated as a
special item. The costs of share-based payment schemes introduced
after the IPO are not treated as special items.
The Group defines headline earnings per share as earnings based
on net income attributable to owners of the Group, before items of
a capital nature, net of income tax as required for companies
listed on the Johannesburg Stock Exchange.
Six-month period ended
----------------------------
US$ million , unless otherwise indicated 30 June 2021 30 June 2020
------------------------------------------------------- ------------- -------------
Headline earnings per share
Net income attributable to owners 71 8
Re-measurements:
Net gain on disposal of PP&E and intangible assets - (1)
Headline earnings 71 7
--------------------------------------------------------- ------------- -------------
Weighted average number of ordinary shares (million) 1,265 1,266
Headline earnings per share (US$) 0.06 0.01
Diluted number of shares (million) 1,265 1,266
Diluted headline earnings per share (US$) 0.06 0.01
--------------------------------------------------------- ------------- -------------
ETR 40% 69%
--------------------------------------------------------- ------------- -------------
5. Finance income and expense
Six-month period ended
----------------------------
US$ million 30 June 2021 30 June 2020
-------------------------------------------------------------------- ------------- -------------
Finance expense
Interest on bank and other borrowings and on lease liabilities [1] (21) (23)
Interest on long-term debt including amortisation of set-up fees (10) (13)
Net impact of hyperinflation [2] - (1)
Foreign exchange loss (1) -
Accretion expense net defined benefit liability (1) (1)
Other (1) (2)
-------------------------------------------------------------------- ------------- -------------
(34) (40)
-------------------------------------------------------------------- ------------- -------------
Finance income
Interest from cash and cash equivalents 5 3
Foreign exchange gain - 2
-------------------------------------------------------------------- ------------- -------------
5 5
-------------------------------------------------------------------- ------------- -------------
Finance expense - net (29) (35)
-------------------------------------------------------------------- ------------- -------------
________
[1] Includes an amount of $8m (2020: $6m) finance expense for
leases with respect to IFRS 16 'Leases' and was paid during the
period.
[2] Represents the net non-monetary impact from the application of IAS 29 'Financial Reporting in Hyperinflationary Economies'.
6. Income taxes
Income tax expense is recognised based on management's estimate
of the annual effective income tax rate of 40% for the six-month
period ended 30 June 2021 (69% for the six-month period ended 30
June 2020, which was based on the actual year to date tax expense).
The effective tax rate used for the six-month period ended 30 June
2021 is in line with management's estimated annual income tax rate
for the year, as no significant items impacting the effective
annual income tax rate have been identified. The decrease of the
ETR is primarily due to a lower relative impact of the permanent
items and the withholding tax as a result of higher earnings before
tax.
7. Earnings per share
Basic and diluted earnings per share were computed as
follows:
Six-month period ended
----------------------------
US$ million , unless otherwise indicated 30 June 2021 30 June 2020
------------------------------------------------------ ------------- -------------
Basic earnings per share
Net income 76 13
Attributable to owners 71 8
Weighted average number of ordinary shares (million) 1,265 1,266
------------------------------------------------------ ------------- -------------
Basic earnings per share ( US$ ) 0.06 0.01
------------------------------------------------------ ------------- -------------
Six-month period ended
----------------------------
US$ million , unless otherwise indicated 30 June 2021 30 June 2020
------------------------------------------ ------------- -------------
Diluted earnings per share
Earnings attributable to owners 71 8
Diluted number of shares (million) 1,265 1,266
------------------------------------------ ------------- -------------
Diluted earnings per share ( US$) 0.06 0.01
------------------------------------------ ------------- -------------
Six-month period ended
----------------------------
US$ 30 June 2021 30 June 2020
------------------------------------- ------------- -------------
Adjusted diluted earnings per share
Diluted earnings per share 0.06 0.01
Impact of special items - -
------------------------------------- ------------- -------------
Adjusted diluted earnings per share 0.06 0.01
------------------------------------- ------------- -------------
8. Inventories
Cost of sales as disclosed on the face of the consolidated
statement of comprehensive income include the total expense for
inventory for the period amounting to $3,468m (H1 2020: $2,974m).
The carrying value of inventory represents the lower of cost or net
realisable value. Provisions for write-downs of inventories to the
net realisable value amounted to $7m (2020: $8m).
9. Borrowings
US$ million Drawn on Interest rate Maturity 30 June 2021 31 December 2020
---------------------------- ------------ --------------------------- ----------- ------------- -----------------
Notes [1] 24/09/2020 5.125% 24/09/2027 349 349
VEI BV Revolving Credit Libor/Euribor +
Facility [2] 27/02/2019 1.25%/1.75% - 59
Bank borrowings 294 274
------------------------------------------ --------------------------- ----------- ------------- -----------------
643 682
----------------------------------------- --------------------------- ----------- ------------- -----------------
Current 289 270
Non-current 354 412
643 682
----------------------------------------- --------------------------- ----------- ------------- -----------------
_______________
[1] The amounts are net of financing costs. Notes amount is
$350m (2020: $350m); financing costs are $1m (2020: $1m).
[2] The amount included financing cost of circa $1m.
Current borrowings consist of bank borrowings which carry
interest rates between 1.5% and 16.5% per annum.
The fair value of the notes is approximately $375m based on
quoted market prices at the end of the reporting period. The
carrying amounts of the Group's other non-current and current
borrowings approximate the fair value. In September 2020, the Group
issued $350m notes with a coupon rate of 5.125% paid semi-annually.
The notes are fully redeemed at maturity. In May 2018, the Company
established a multi-currency RCF of $300m. At 30 June 2021 the RCF
was undrawn (2020: $59m). The majority of the RCF matures in May
2023.
Besides the RCF, the Group has various unsecured short-term bank
facilities extended to operating entities for working capital
purposes. The undrawn, unsecured short-term bank facilities of
$1,042m include a large number of uncommitted facilities held with
a number of different banks. Most of these facilities are subject
to an annual renewal process.
The tables below provide an analysis of cash and non-cash
movements in borrowings for the period:
2021
----------------------------------------- --------------- ---------------- ------
US$ million Long-term debt Bank borrowings Total
----------------------------------------- --------------- ---------------- ------
1 January 408 274 682
----------------------------------------- --------------- ---------------- ------
Repayment of long-term debt [1] (60) - (60)
Proceeds/(repayment) of bank borrowings - 19 19
Foreign exchange movements - 1 1
Other2 1 - 1
----------------------------------------- --------------- ---------------- ------
30 June 349 294 643
----------------------------------------- --------------- ---------------- ------
2020
----------------------------------------- --------------- ---------------- ------
US$ million Long-term debt Bank borrowings Total
----------------------------------------- --------------- ---------------- ------
1 January 371 229 600
----------------------------------------- --------------- ---------------- ------
Proceeds from long-term debt(3) 517 - 517
Repayment of long-term debt1 (492) - (492)
Proceeds/(repayment) of bank borrowings - 26 26
Foreign exchange movements 7 8 15
Other(2) 5 11 16
----------------------------------------- --------------- ---------------- ------
31 December 408 274 682
----------------------------------------- --------------- ---------------- ------
___________
(1) Includes repayments of the Term Loan and RCF.
(2) Other includes financing costs and non-cash items.
(3) Mainly represents the issuance of fully redeemable notes to
the amount of $350m on 24 September 2020 and RCF drawdowns.
Key covenants
The below key covenants relate to the VEI BV Revolving Credit
Facility:
-- Within 150 calendar days after the Group's year-end, its
audited annual consolidated financial statements, unaudited annual
non-consolidated financial statements and the unaudited annual
Group accounts of each operating unit must be provided to the
lender. Within 90 days after each half of each financial year, the
unaudited non-consolidated financial statements, unaudited
consolidated financial statements and unaudited Group accounts for
each operating unit for the financial half-year must be provided to
the lender.
-- The financial covenants are minimum interest cover of 4x and
maximum debt cover of 3x. With each set of financial statements, a
financial covenants compliance certificate has to be provided
indicating the debt and interest cover. The loan carries some
customary negative pledges such as on asset sale, securities over
assets, mergers and guarantees subject in each case to some
exemptions and permitted baskets. It also has a change of control
clause triggering repayment if an entity, other than permitted
ones, takes control of the Company.
The below key covenants relate to the VEI BV Notes:
-- The financial covenants are a minimum fixed charged cover of
2x. The Notes carry customary restrictive covenants such as on
asset sale, securities over assets, mergers and guarantees subject
in each case to some exemptions and permitted baskets, and a
maintenance of listing covenant. It also has a change of control
clause giving each noteholder a put right if an entity, other than
permitted ones, takes control of the Company.
No covenants were breached in the last applicable period.
10. Net change in operating assets and liabilities and other
adjustments
Six-month period ended
------------------- ----------------------------
US$ million 30 June 2021 30 June 2020
------------------- ------------- -------------
Trade receivables (101) 101
Trade payables 94 (413)
Inventories (32) 121
Other assets 14 1
Other liabilities 17 2
Provisions 3 (6)
Other 26 27
------------------- ------------- -------------
21 (167)
------------------- ------------- -------------
11. Contingencies
Contingent liabilities and legal proceedings
The Group may from time to time be involved in a number of legal
proceedings. The Directors prepare a best estimate of its
contingent liabilities that should be recognised or disclosed in
respect of legal claims in the course of the ordinary business.
Furthermore, in many markets there is a high degree of complexity
involved in the local tax and other regulatory regimes. The Group
is required to exercise judgement in the assessment of any
potential exposures in these areas.
As announced in March, the Royal Cabinet's review of the Conseil
de la Concurrence's ('CDC') investigation of the fuel marketing
industry concluded that the CDC investigation "was marked by
numerous procedural irregularities" and experienced "an obvious
deterioration in the climate of deliberations". A new President has
now been appointed to lead the CDC. We continue to believe that we
have conducted our operations in accordance with applicable
competition laws, rules and regulations.
In the ordinary course of business, the Group is subject to a
number of contingencies arising from litigation and claims brought
by governmental, including tax authorities, and private parties.
The operations and earnings of the Group continue, from time to
time, to be affected to varying degrees by political, legislative,
fiscal and regulatory developments, including those relating to the
protection of the environment and indigenous groups in the
countries in which they operate. The industries in which the Group
is engaged are also subject to physical risks of various types.
There remains a high degree of uncertainty around these
contingencies, as well as the potential effect on future
operations, earnings, cash flows and the Group's financial
condition.
The Group is not currently aware of any other litigations,
claims, legal proceedings or other contingent liabilities that
should be disclosed.
12. Related parties
The Group has a number of related parties including joint
arrangements and associates, shareholders, directors and Executive
Committee members. No related party transactions have been entered
into during the period which might reasonably affect any decisions
made by the user of these interim condensed consolidated financial
statements except as disclosed below.
Six-month period ended 30 June 2021
------------------------------------------------------
US$ million Joint ventures and associates Shareholders Total
------------------------------------------------------- ------------------------------ ------------- ------
Sales of products and services, and other income 10 15 25
Purchase of products and services, and other expenses 158 442 600
-------------------------------------------------------- ------------------------------ ------------- ------
Six-month period ended 30 June 2020
------------------------------------------------------
US$ million Joint ventures and associates Shareholders Total
------------------------------------------------------- ------------------------------ ------------- ------
Sales of products and services, and other income 11 39 50
Purchase of products and services, and other expenses 135 338 473
-------------------------------------------------------- ------------------------------ ------------- ------
The following table presents the Group's outstanding balances
with related parties:
30 June 2021
-----------------------------------------------------------------------------------------
US$ million Joint ventures and associates Shareholders Total
----------------------------------- ------------------------------ ------------- ------
Receivables from related parties 50 3 53
Payables to related parties (65) (162) (227)
----------------------------------- ------------------------------ ------------- ------
Total (15) (159) (174)
----------------------------------- ------------------------------ ------------- ------
31 December 2020
---------------------------------- ------------------------------------------------------
US$ million Joint ventures and associates Shareholders Total
---------------------------------- ------------------------------ ------------- ------
Receivables from related parties 53 2 55
Payables to related parties (51) (160) (211)
Total 2 (158) (156)
----------------------------------- ------------------------------ ------------- ------
The receivables from related parties arise from sale
transactions and loans to joint ventures. Receivables are due two
months after the date of sales, are unsecured in nature and bear no
interest. Loans to joint ventures are interest bearing and secured
by the entire issued share capital of the joint venture. An
expected credit loss of $1m (2020: Nil) was recognised in relation
to a joint venture receivable.
The payables to related parties arise mainly from purchase
transactions at arm's length, including a supplier agreement with
Vitol Supply, and are typically due two months after the date of
purchase. These payables bear no interest.
13. Events after balance sheet period
Subsequent to the end of the period, the Board approved an
interim dividend of 1.7 US cents per share, amounting to
approximately $21.5 million. The dividend is expected to be paid on
10 September 2021 to shareholders of record at close of business on
13 August 2021. The dividend will be paid out of distributable
reserves as at 30 June 2021.
RESPONSIBILITY STATEMENT
The Directors confirm that these interim condensed consolidated
financial statements have been prepared in accordance with IAS 34
'Interim Financial Reporting', as adopted by the United Kingdom and
give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Group. The Interim Report
includes a fair review of the information required by DTR 4.2.7 and
DTR 4.2.8, namely:
-- An indication of important events that have occurred during
the first six months of the financial year and their impact on the
condensed set of financial statements, and a description of the
principal risks and uncertainties for the remaining six months of
the financial year; and
-- Disclosure of related party transactions that have taken
place in the first six months of the current financial year and
that have materially affected the financial position or performance
of the entity during that period; and any changes in the related
party transactions described in the last annual report that could
have a material impact on the financial position or performance of
the entity in the first six months of the current financial
year.
The Directors of Vivo Energy plc are listed on pages 78 and 79
of the Vivo Energy plc 2020 Annual Report and Accounts dated 2
March 2021, with the exception of Johan Depraetere who retired from
the Board on 5 March 2021, there were no further changes in the
period. A list of current directors is maintained on the Vivo
Energy plc website:
http://investors.vivoenergy.com/group-overview/board-of-directors
.
By order of the Board
Doug Lafferty
Chief Financial Officer
26 July 2021
Adrian de Souza
Group General Counsel
26 July 2021
INDEPENDENT REVIEW REPORT TO VIVO ENERGY PLC
Report on the interim condensed consolidated financial
statements
Our conclusion
We have reviewed Vivo Energy plc's interim condensed
consolidated financial statements (the "interim financial
statements") in the Interim Report of Vivo Energy plc for the
6-month period ended 30 June 2021 (the "period").
Based on our review, nothing has come to our attention that
causes us to believe that the interim financial statements are not
prepared, in all material respects, in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial
Reporting', and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
What we have reviewed
The interim financial statements comprise:
-- the consolidated interim statement of financial position as at 30 June 2021;
-- the consolidated interim statement of comprehensive income for the period then ended;
-- the consolidated interim statement of cash flows for the period then ended;
-- the consolidated interim statement of changes in equity for the period then ended; and
-- the explanatory notes to the interim financial statements.
The interim financial statements included in the Interim Report
of Vivo Energy plc have been prepared in accordance with UK adopted
International Accounting Standard 34, 'Interim Financial
Reporting', and the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority.
Responsibilities for the interim financial statements and the
review
Our responsibilities and those of the Directors
The Interim Report, including the interim financial statements,
is the responsibility of, and has been approved by the Directors.
The Directors are responsible for preparing the Interim Report in
accordance with the Disclosure Guidance and Transparency Rules
sourcebook of the United Kingdom's Financial Conduct Authority. Our
responsibility is to express a conclusion on the interim financial
statements in the Interim Report based on our review. This report,
including the conclusion, has been prepared for and only for the
company for the purpose of complying with the Disclosure Guidance
and Transparency Rules sourcebook of the United Kingdom's Financial
Conduct Authority and for no other purpose. We do not, in giving
this conclusion, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior
consent in writing.
What a review of interim financial statements involves
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and, consequently, does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion. We have read the other information
contained in the Interim Report and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the interim financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants
London
26 July 2021
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END
IR SEAFAMEFSESW
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July 27, 2021 02:00 ET (06:00 GMT)
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