Viva Energy Group has cut its half-year core retail earnings guidance while flagging that its refining business has been hit by weak regional profit-margins.
The company said on Monday expects underlying core earnings from its retail business for the first-half of 2019 of $275 million to $290 million, which is lower than its outlook in April of $286.9 million to $291.9 million.
The downgrade comes days after rival Caltex Australia said it expected first-half profit to be less than half of what it was a year earlier, as the petrol station owner grapples with slowing economic growth and margin pressure.
“Soft regional demand continues to weigh heavily on regional refining margins,” Viva Energy said in a statement.
Viva sees underlying earnings for its refining business at about zero to $20 million for the half.
The company reported earnings of $48.1 million at the same time in 2018.
The group’s underlying net profit is expected to be about $60 million to $80 million in the half, compared with $129.4 million a year earlier.