Morningstar | Better Coles Express interest alignment and right to price fuel supports fair value
There is a lot to like about Viva Energy's business. The firm enjoys a strategically advantaged infrastructure base from which to refine, store, and distribute fuel across Australia. It has a market-leading position in Victoria, and near-market-leading positions in most other Australian states. It is the second-largest refined fuel supplier in Australia at 14.2 billion litres or 24% share of the 60 billion litre market overall, second only to largest player Caltex Australia Limited with approximately 27% share. It is also one of the most vertically integrated players in the country with the second-highest refining capacity, second-most comprehensive pipeline infrastructure, the highest number of fuel terminals, and third-largest number of retail sites. Nonetheless, while the pipeline and terminal infrastructure enjoy some competitive advantage, we don't think these are sufficient to justify an economic moat.Viva Energy Group Ltd. Viva Energy Group Ltd is an Australia-based integrated downstream petroleum company. The Company operates across three business segments: Retail, Fuels and Marketing; Refining; and Supply, Corporate and Overheads. Retail, Fuels and Marketing segment consists of retail and commercial operations. Retail, which supplies and markets fuel products and lubricants through a national network sites. Commercial, which supplies of fuel, lubricants and specialty products to commercial customers. Refining segment owns and operates the Geelong Refinery, in Victoria, which converts imported and locally sourced crude oil into petroleum products including gasoline, diesel, jet fuel, aviation gasoline, gas, solvents, bitumen and other specialty products. Supply, Corporate and Overheads segment owns contracted access to a national infrastructure network comprising terminals, retail sites, storage tanks, depots and pipelines positioned across metropolitan and regional Australia.
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