African distributor Vivo Energy reported double-digit declines in profit for its lubricant segment and a 5% decrease in revenue from external customers for the first half of this year.
The company is a major distributor of lubricants to retail and commercial customers in Africa.
Its lubricant segment’s adjusted earnings before interest, taxes, depreciation and amortization fell 33% to $24 million for the six-month period. Gross profit dropped 27% to $32 million.
Gross cash profit declined 20% to $37 million for the first half of the year. Gross cash unit margin – which indicates incremental profit for each additional unit sold – declined 14% to $504 per 1,000 liters.
Lubricant segment revenue from external customers decreased to $238 million for the six-month period, compared to $250 million.
Sales volumes declined from 80 million liters to 73 million liters (66,000 metric tons) for the first half of this year. The company attributed the year-on-year decline in lubricant volume growth mainly “to higher product costs and strong market competition, offset by additional cross-border export sales in the commercial sector.”
The company’s lubricants segment aggregates retail, business-to-consumer, business-to-business and export lubricants operating segments.
Vivo’s retail lubricants business includes the sale of products from its service station forecourts and lubricant bays and also at oil shops, repair shops, service centers and resellers through a network of distributors. On the commercial side, the company supplies specialist lubricants to mining companies and business-to-business customers, and also exports to other African markets.