Vivo Lube Earnings Rose in 2023

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Vivo Lube Earnings Rose in 2023

Vivo Energy, which distributes lubricants to retail and commercial customers across Africa, reported a 10% increase in earnings for its lubricants segment in 2023 and a 5% uptick in sales revenue from external customers, the company said in its annual report.

The lubricant segment’s adjusted earnings before interest, taxes, depreciation and amortization fell to $63 million in 2023, compared to $70 million in 2022. The segment’s gross profit declined 6% to $82 million last year.

The gross cash unit margin per 1,000 liters in the lubricant segment decreased by 2% last year to $593, compared to $608, which the company said was mainly due to a higher cost of product. Unit margin is the profit per unit after deducting product manufacturing or packaging costs and variable selling expenses from the product’s sales price.

Sales volumes decreased to 147 million liters (132,000 metric tons) in 2023, a 1% decrease from 149 million liters. The decrease was mainly due to an economic slowdown in some of the company’s markets, Vivo said in its annual report’s analysis of consolidated results of operations section.

Lubricants segment sales revenue from external customers rose 5% to $500 million last year, compared to $478 million.

Through a 50:50 joint venture with Shell, called SVL, Vivo has access to and operates blending plants in Morocco and Kenya, and has interests in blending operations in Tunisia, Cote d’Ivoire, Ghana and Guinea.

For the annual report, the lubricants segment aggregates retail, business-to-consumer, business-to-business and export lubricants operating segments.

Vivo’s retail lubricants business involves 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 B2B customers, and also exports to other African markets.