Viva’s 3Q25 trading update reveals challenges still exist in its Convenience segment with a decline in tobacco gross profit. However, elsewhere in the business conditions are turning the corner. Gross profit for non-tobacco sales has increased and refinery margins are higher. Elevated refinery margins should persist for a few more quarters at least. We have reduced our Convenience and Commercial segment earnings for Viva, but lifted refining profits.

We transfer coverage of Viva Energy from Scott Hudson to Craig Woolford. In this report, we address the outlook for its convenience strategy and balance sheet position. We are positive on the refining margin outlook but expect the OTR conversions to be slower and more costly to complete.