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Australian fuel refiner and retailer Viva Energy (ASX: VEA) has defied a breakdown at its Geelong facility earlier this year to deliver a 150 per cent surge in underlying profit over the first half as higher margins combined with a lift in demand to support the result.
Viva Energy today posted unaudited first-half group EBITDA of between $770 million to $780 million on a replacement cost basis, more than 2.5 times the $305 million recorded in the prior corresponding period, as the Middle East conflict disrupted global oil flows and sent refining margins soaring.
The result has been driven primarily by a surge in Viva's Geelong Refining Margin (GRM) to US$21.1 per barrel for the six months to 30 June 2026, up 156 per cent from US$8.2 per barrel in the first half of FY25.
The margin spike reflects a regional shortage of refining capacity triggered by geo-political disruption across energy supply chains.
Viva Energy's margin growth aligns with Ampol (ASX: ALD) reporting in April that its Lytton refiner margin rose more than 300 per cent to US$25.45 per barrel in the first quarter of calendar 2026.
“The first half of this year was shaped by geo-political events which have caused significant disruption across the global energy markets," says Viva Energy CEO Scott Wyatt.
"While these events have severely tested traditional supply chains we have worked closely with governments, customers, and our suppliers to maintain production and supply throughout the period, leveraging Viva Energy’s integrated supply chain capability.
"Our strong financial results reflect a substantially improved refining margin environment which has been driven by a regional shortage of oil supply and refining capacity, as well as improving retail sales growth and continuing strength of our commercial businesses.
"Domestic refining has reduced dependency on international refineries and will continue to play a critical role in maintaining fuel supply security into the future."
Viva Energy's Energy & Infrastructure segment is expected to deliver EBITDA of about $353 million for the first half, a figure that already dwarfs the $93 million the segment posted for the entirety of FY25.
The Commercial & Industrial division contributed about $305 million, buoyed by favourable pre-conflict hedging and term supply arrangements, although Viva has warned those tailwinds will be "less supportive" in the second half as contracts roll over.
Convenience & Mobility, which spans the group's retail fuel and convenience network, posted EBITDA of $138 million, supported by fuel volume growth of 2.4 per cent and robust retail margins.
Viva Energy says the stronger sales reflected retail fuel availability and competitive pricing across the Viva Energy retail network, with the company describing retail fuel margins as "robust" through most of the first half.
The group result was partially offset by a fire at the Geelong Refinery's Alkylation unit in April that reduced production at the facility.
The refinery's residue catalytic cracking unit was restarted in June, restoring more than 90 per cent of capacity, but the Alkylation unit will remain offline throughout 2027 for repairs.
The elevated margins meant Viva received no payment under the federal government's Fuel Security Services Payment (FSSP) scheme during the half, as the GRM exceeded the A$15.9 per barrel threshold that triggers government support.
That marks a sharp contrast to FY25, when the government increased the FSSP collar to bolster the subsidy for domestic refining.
Viva Energy expects regional refining margins to remain above long-term averages through the remainder of its current financial year which ends in December.
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