Half Year 2026 Viva Energy Group Ltd Earnings Call

August 25, 2026

Speaker #1: Thank you for standing by, and welcome to the Viva Energy Australia Half-Year Results 2026 conference call. All participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad.

Operator: Thank you for standing by, and welcome to the Viva Energy Australia Half Year Results 2026 conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Scott Wyatt, Chief Executive Officer. Please go ahead.

Operator: Thank you for standing by, and welcome to the Viva Energy Australia Half Year Results 2026 conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Scott Wyatt, Chief Executive Officer. Please go ahead.

Speaker #1: I would now like to hand the conference over to Mr. Scott Wyatt, Chief Executive Officer. Please go ahead.

Speaker #2: Good morning, and thank you for joining us to discuss our 2026 first half results. With me on the call are Karen Petic, our Chief Financial Officer; Denny Urdesperia, our EGM of Commercial; Jennifer Gray, our Chief Strategy Officer; and Theresa Rendo, our New Retail CEO.

Scott Wyatt: Yeah. Good morning, and thank you for joining us to discuss our 2026 H1 results. With me on the call is Carolyn Pedic, our Chief Financial Officer, Danny Behravanpour, our EGM of Commercial, Jennifer Gray, our Chief Strategy Officer, and Teresa Rendo, our new Retail CEO. On the call, Carolyn and I will share the group results, while Jen and Teresa will provide more commentary on our retail convenience businesses, and then you'll be available to answer any questions around commercial. As foreshadowed in our quarterly trading update, we've delivered record earnings this half, supported with strong performances in all of our business units. These results reflect a substantially improved refining margin environment driven by events in the Middle East, but also improving retail sales growth and continuing strength of our commercial businesses.

Scott Wyatt: Yeah. Good morning and thank you for joining us to discuss our 2026 H1 results. With me on the call is Carolyn Pedic, our Chief Financial Officer, Danny Urtizberea, our EGM of Commercial, Jennifer Gray, our Chief Strategy Officer, and Teresa Rendo, our new Retail CEO. On the call, Carolyn and I will share the group results, while Jen and Teresa will provide more commentary on our retail convenience businesses, and then you'll be available to answer any questions around commercial. As foreshadowed in our quarterly trading update, we've delivered record earnings this half, supported with strong performances in all of our business units. These results reflect a substantially improved refining margin environment driven by events in the Middle East but also improving retail sales growth and continuing strength of our commercial businesses.

Speaker #2: On the call, Carolyn and I will share the group results, while Jen and Theresa will provide more commentary on our retail convenience businesses. Then you'll be available to answer any questions around commercial.

Speaker #2: As foreshadowed in our quarterly trading update, we've delivered record earnings this half, supported by strong performances in all of our business units.

Speaker #2: These results reflect a substantially improved refining margin environment, driven by events in the Middle East, but also improving retail sales growth and continuing strength of our commercial businesses.

Speaker #2: The improvements in our underlying business are very encouraging, and we expect to be able to continue building on this as we cycle through this extraordinary period.

Scott Wyatt: The improvements in our underlying business are very encouraging, and we expect to be able to continue building on this as we cycle through this extraordinary period. Despite significant volatility, I'm very pleased with the way we've managed the significant inventory and supply exposures and maintained capital discipline throughout the period. The resulting strong cash conversion has strengthened our balance sheet with net debt reducing from AUD 2.1 billion at the end of 2025 to AUD 1.7 billion at the end of June. In recognition of these results, the board has determined an interim fully franked dividend of AUD 0.0773 per share, representing a 70% payout of CNM and CNI NPAT on a replacement cost basis, which is, of course, at the top end of the company's dividend policy.

Speaker #2: Despite significant volatility, I'm very pleased with the way we've managed the significant inventory and supply exposures, and maintained capital discipline throughout the period. The resulting strong cash conversion has strengthened our balance sheet, with net debt reducing from $2.1 billion at the end of '25 to $1.7 billion at the end of June.

Speaker #2: In recognition of these results, the Board has determined an interim, fully franked dividend of 7.73 cents per share, representing a 70% payout of CNM and CNI NPAT on a replacement cost basis.

Speaker #2: Which is, of course, at the top end of the company's dividend policy. In line with our policy, the contribution of the E&I business will be assessed at the conclusion of the financial year.

Scott Wyatt: In line with our policy, the contribution of the ENI business will be assessed at the conclusion of the financial year. That said, we expect the ENI business to continue performing well through the H2. Notwithstanding these excellent financial results and an improvement in our personal safety performance, it is important to acknowledge that we had a significant process safety incident in April, which resulted in a fire within the gasoline complex. We are fortunate that no one was seriously hurt and that the fire was safely contained by the professional actions of our response teams, but this is indeed a serious incident which we are determined to learn from. As we've previously confirmed, the refinery is expected to maintain operations at more than 90% of its normal operating capacity until the unit is repaired or replaced.

Speaker #2: That said, we expect the E&I business to continue performing well through the second half. Notwithstanding these excellent financial results and an improvement in our personal safety performance, it is important to acknowledge that we had a significant process safety incident in April, which resulted in a fire within the gasoline complex.

Speaker #2: We are fortunate that no one was seriously hurt and that the fire was safely contained by the professional actions of our response teams. However, this is indeed a serious incident from which we are determined to learn.

Speaker #2: As we've previously confirmed, the refinery is expected to maintain operations at more than 90% of its normal operating capacity until the unit is repaired or replaced.

Speaker #2: We are assessing technology solutions and will work with our insurers to determine the best pathway forward over the coming months. Given this is a long-term investment decision, our approach will also be influenced by the government refining retention policy, which is currently under development. I'll cover this in a little bit more detail later in the presentation.

Scott Wyatt: We are assessing technology solutions and will work with our insurers to determine the best pathway forward over the coming months. Given this is a long-term investment decision, our approach will also be influenced by the government refining retention policy which is currently under development, and which I will cover in a little bit more detail later in the presentation. The H1 of this year was obviously shaped by the geopolitical events which have caused significant disruption across the global energy markets. While these events have severely tested traditional supply chains, we have worked closely with governments, customers, and our suppliers to maintain production and supply throughout the period, leveraging Viva Energy's integrated supply chain capability. Our trading relationship with Vitol, coupled with our domestic refining capability, provides important diversification of supply, which reduces risk of supply disruption and provides critical earnings protection during periods of high volatility.

Speaker #2: The first half of this year was obviously shaped by the geopolitical events which, of course, caused significant disruption across the global energy markets. While these events have severely tested traditional supply chains, we have worked closely with governments, customers, and our suppliers to maintain production and supply throughout the period.

Speaker #2: Leveraging Viva Energy's integrated supply chain capability, our trading relationship with retail, coupled with our domestic refining capability, provides important diversification of supply, which reduces the risk of supply disruption and provides critical earnings protection during periods of high volatility.

Speaker #2: Our refining business benefited from higher regional refining margins, and the term supply arrangements with retail insulated the company from the extreme, surprise escalations over the period.

Scott Wyatt: Our refining business benefited from higher regional refining margins and the term supply arrangements with Vitol insulated the company from the extremes of price escalations over the period. Underscoring the importance of domestic refining to the country's energy security framework, the government updated the Fuel Security Services Payment scheme to provide more protection during periods of low regional refining margin and is engaging with us on a new program to retain refining through the next decade. As part of this program, we successfully completed commissioning of the ultra-low sulfur gasoline project at the beginning of the year. Yet again, our commercial business delivered an exceptional performance through a period of significant disruption and volatility. This reflects the diversity of our various businesses within commercial, the quality of our customer base, and the strength of our infrastructure and supply chains.

Speaker #2: Underscoring the importance of domestic refining to the country's energy security framework, the government updated the Fuel Security Services Payment Schemes, which provide more protection during periods of low regional refining margins, and is engaging with us on a new program to retain refining through the next decade.

Speaker #2: As part of this program, we successfully completed commissioning of the ultra-low sulphur gasoline project at the beginning of the year. Yet again, our Commercial business delivered an exceptional performance through a period of significant disruption and volatility.

Speaker #2: This reflects the diversity of our various businesses within Commercial, the quality of our customer base, and the strength of our infrastructure and supply chains.

Speaker #2: Sales volumes lifted to 5.9 billion liters, driven by strong demand across the portfolio, lifting underlying EPADA to around $250 million for the half. Both CNI and CNM benefited from advantageous term supply arrangements that were in place prior to the conflict in the Middle East, and which have insulated the business from elevated and volatile prices across the period.

Scott Wyatt: Sales volumes lifted to 5.9 billion liters, driven by strong demand across the portfolio, lifting underlying EBITDA to around AUD 250 million for the half. Both CNI and CNM benefited from advantaged term supply arrangements that were in place prior to the conflict in the Middle East, and which have insulated the business from elevated and volatile prices across the period. After allocating these benefits and other initiatives to manage costs and margin, CNI earnings lifted to AUD 305 million for the half. Notwithstanding the effects of the fire at Geelong Refinery, our ENI business delivered an EBITDA of AUD 354 million for the period, underpinned by exceptionally strong regional refining margins.

Speaker #2: After allocating these benefits and other initiatives to manage costs and margin, CNI earnings lifted to $305 million for the half. Notwithstanding the effects of the fire at the long refinery, our E&I business delivered EBITDA of $354 million for the period, underpinned by exceptionally strong regional refining margins.

Speaker #2: GRM for the half averaged over $21 per barrel, which is in line with the GRM recorded for July and is expected to remain strong for the remainder of the year.

Scott Wyatt: GRM for the half averaged over AUD 21 per barrel, which is in line with the GRM recorded for July and is expected to remain strong for the remainder of the year. Operating costs were elevated during the half due to measures taken to stabilize operations and recover from the loss of the alkylation unit. However, we expect these costs to moderate as we adapt to a new operating setup. Before I hand over to Jen and Teresa, let me just touch on the fuel security measures recently announced by the federal government. Collectively, these represent a significant investment in critical energy infrastructure to improve fuel security and support domestic refining and together offer opportunities for Viva Energy to further strengthen its infrastructure positions.

Speaker #2: Operating costs were elevated during the half due to measures taken to stabilize operations and recover from the loss of the Oculation unit; however, we expect these costs to moderate as we adapt to a new operating setup.

Speaker #2: Before I hand over to Jen and Theresa, let me just touch on the fuel security measures recently announced by the federal government. Collectively, these represent a significant investment in critical energy infrastructure to improve fuel security and support domestic refining, and together offer opportunities for Viva Energy to further strengthen its infrastructure positions.

Speaker #2: Right now, we are heavily engaged with government on policy development to provide long-term investment certainty for the refining sector, which we expect to provide more certain returns than provided under the current EPSP framework.

Scott Wyatt: Right now, we are heavily engaged with government on policy development to provide long-term investment certainty for the refining sector, which we expect to provide more certain returns than provided under the current FSSP framework. Together with the development of government-funded storage, we anticipate these programs to strengthen our refining operations and accelerate the development of our energy hub at Geelong. We expect consultation engagement to materially progress through the remainder of this year. Let me now hand over to Jen to talk about our convenience business.

Speaker #2: Together with the development of government-funded storage, we anticipate these programs can strengthen our refining operations and accelerate the development of our energy hub at Geelong.

Speaker #2: We expect consultation engagement to materially progress through the remainder of this year. Let me now hand over to Jen to talk about our Convenience business.

Speaker #3: Thanks, Scott. I'll start with our trading performance on slide 11. The first half result shows a material improvement in Convenience and Mobility—we're going to see that increasing to $139 million from $74 million compared to the prior corresponding period.

Jennifer Gray: Thanks, Scott. I will start with our trading performance on slide 11. The H1 result shows a material improvement in the Convenience and Mobility with visits increasing to 139 million from 74 million compared to the prior corresponding period. The first part of the bridge normalizes the benefits from five period acquisitions, including Liberty Oil convenience and the transition to own fuel supply in South Australia, as well as an adjustment that recognizes poor industry trading conditions in 2025. The second part sets out the underlying trading performance with improvements supported by higher fuel sales, stronger retail fuel margins, and an allocation of supply benefits achieved during this period. Total retail fuel volumes increased by around 2%, with diesel the primary driver of this growth. Margins were partially offset by a one-off excise reduction that was passed through to the market in full immediately.

Speaker #3: The first half of the bridge normalizes the benefits from prior period acquisitions, including Liberty Oil Convenience and the transition to own fuel supply in South Australia.

Speaker #3: As well as an adjustment that recognizes core industry trading conditions in 2025. The second part sets out the underlying trading performance, with improvements supported by higher fuel sales, stronger retail fuel margins, and an allocation of supply benefits achieved during this period.

Speaker #3: Total retail fuel volumes increased by around 2%, with diesel the primary driver of this growth. Margins were partially offset by a one-off excise reduction that was passed through to the market in full immediately.

Speaker #3: In Convenience, total sales were lower, reflecting the continued year-on-year decline in tobacco. Importantly, tobacco sales remained stable over a 12-month period. Sales excluding tobacco increased by 1.3%, supported by increased customer visits and more coordinated promotional activity.

Jennifer Gray: In convenience, total sales were lower, reflecting the continued year-on-year decline in tobacco. But importantly, tobacco sales remained stable over a 12-month period. Sales excluding tobacco increased by 1.3%, supported by increased customer visits and a more coordinated promotional activity. These benefits were partially offset by inflationary pressures, including wages and rent, together with other costs such as the year-on-year impact of legacy electricity contracts that expired mid-2025. Overall, the results show that the earnings base is improving. The next phase is to build on the momentum through better retail execution, greater control of the supply chain, and disciplined investment in the network. During the H1, we made progress against the five priorities through which we are building a stronger and more scalable retail operating platform. Together, these priorities are designed to improve the customer proposition, strengthen execution, and establish a platform for sustainable earnings growth.

Speaker #3: These benefits were partially offset by inflationary pressures, including wages and rent, together with other costs such as the year-on-year impact of legacy electricity contracts that expired mid-2025.

Speaker #3: Overall, the results show that the earnings base is improving. The next phase is to build on the momentum through better retail execution, rate control of the supply chain, and disciplined investment in the network.

Speaker #3: During the half, we made progress against the five priorities through which we are building a stronger and more scalable retail operating platform. Together, these priorities are designed to improve the customer proposition, strengthen execution, and establish a platform for sustainable earnings growth.

Speaker #3: First, under 'Team and Customer Obsessed,' we passed through the full excise reduction promptly, providing customers with relief during a period of elevated fuel prices.

Jennifer Gray: First, under team and customer obsessed, we passed through the full excise reduction promptly, providing customers with relief during a period of elevated fuel prices. We also rolled out Flybuys across OTR, aligning loyalty and customer data across the OTR and Reddy Express networks, and addressing a specific pain point for customers at our converted locations. Under retail excellence, we appointed a new retail CEO and have continued to strengthen the broader leadership capability of the business. We also maintain strong retail fuel supply through a period of significant market disruption and demand uncertainty. Our efficient supply chain is progressing to plan. Distribution capability has now been established across the eastern seaboard, and we are on track to exit from the Coles product supply agreement by the end of November.

Speaker #3: We also rolled out Flybuys across OTR, aligning loyalty and customer data across the OTR and Ready Express networks, and addressing a specific pain point for customers at our converted locations.

Speaker #3: Under Retail Excellence, we have appointed a new retail CEO and have continued to strengthen the broader leadership capability within the business. We also maintained strong retail fuel supply through a period of significant market disruption and demand uncertainty.

Speaker #3: Our efficient supply chain is progressing to plan. Distribution capability has now been established across the eastern seaboard, and we are on track to exit from the coal's product supply agreements by the end of November.

Speaker #3: We've also focused on the curation of our offer, starting with a review of the product range, simplifying our offer, and improving its relevance to customers.

Jennifer Gray: We've also focused on the curation of our offer, starting with a review of the product range, simplification of our offer, and improving its relevance to customers. We've sourced the first private label products ahead of launch in H2, initially focused on everyday categories such as milk and water, addressing a key gap in our offer. Finally, under the right network and format, we've adapted the 2026 development program to focus capital on highest return opportunity, which I'll cover in more detail on the following slide. Our network strategy is focused on having the right format in the right location, supported by disciplined returns lead capital allocation. We have adapted the 2026 development program in response to evolving market conditions. The program continues to be led by opening new OTR stores paired with conversions where the economics are compelling.

Speaker #3: We've sourced the first private label products ahead of launch in the second half, initially focused on everyday categories such as milk and water, addressing a key gap in our offer.

Speaker #3: Finally, under the right network and format, we've adapted the full-year '26 development program to focus capital on the highest-return opportunities, which I'll cover in more detail on the following slide.

Speaker #3: Our network strategy is focused on having the right format and the right locations, supported by disciplined, returns-led capital allocation. We have adapted the full-year '26 development program in response to evolving market conditions.

Speaker #3: The program continues to be led by opening new OTR stores, paired with conversions where the economics are compelling. For the full year '26, we expect to deliver 20 to 25 new OTR stores, supported by a smaller number of conversions to both OTR and Liberty formats.

Jennifer Gray: For 2026, we expect to deliver 20 to 25 new OTR stores, supported by a smaller number of conversions to both OTR and Liberty formats. We're also progressing the conversion of 25 to 30 stores to an unattended self-service format. These are predominantly locations where the shop sales do not support continued investments in a fully attended store, but where the fuel site itself remains attractive. We're trialing an unattended format that retains a customer proposition through features such as a small kiosk vending and collection capability, while materially lowering the operating costs of the site. Customer acceptance across the three trial locations has been encouraging with improved fuel sales and site performance, with payback periods aligned with industry norms. We will apply the learnings from these trials as we progress the 2026 conversion program.

Speaker #3: We're also progressing the conversion of 25 to 30 stores to an unattended self-service format. These are predominantly locations where the shop sales do not support continued investment in a fully attended store, but where the fuel site itself remains attractive.

Speaker #3: We are trialling an unattended format that retains a customer proposition through features such as a small kiosk, vending, and collection capability, while materially lowering the operating costs of the site.

Speaker #3: Customer acceptance across the three trial locations has been encouraging, with improved fuel sales and site performance, and payback periods aligned with industry norms. We will apply the learnings from these trials as we progress the 2026 conversion program.

Speaker #3: Establishing an independent supply chain is a critical enabler for our next phase of convenience growth. Distribution capability is now operational across South Australia, the Northern Territory, Victoria, Tasmania, Queensland, and New South Wales.

Jennifer Gray: Establishing an independent supply chain is a critical enabler for our next phase of convenience growth. Distribution capability is now operational across South Australia, the Northern Territory, Victoria, Tasmania, Queensland, and New South Wales. Western Australia remains on track for November, which will allow us to complete the national rollout and exit of the Coles product supply agreement by the end of November 2026. Our integrated supply chain gives us greater control over ranging promotions, forecasting, and inventory, and allows us to respond more quickly to customer trends, creating a platform for private label and higher margin growth. The early operational indicators are encouraging. Store deliveries are reducing and lead times for new products are becoming materially shorter. We expect the more meaningful financial benefits to emerge progressively from 2027 as we optimize operations.

Speaker #3: Western Australia remains on track for November, which will allow us to complete the national rollout and exit of the coal product supply agreement by the end of November 2026.

Speaker #3: Our integrated supply chain gives us great control over ranging, promotions, forecasting, and inventory, and allows us to respond more quickly to customer trends, creating a platform for private label and higher-margin growth.

Speaker #3: The early operational indicators are encouraging. Store deliveries are reducing, and lead times for new products are becoming materially shorter. We expect the more meaningful financial benefits to emerge progressively from 2027 as we optimize operations.

Speaker #3: It's now my pleasure to hand over to Theresa to take you through the retail earnings growth roadmap.

Jennifer Gray: Now, my pleasure to hand over to Teresa to take you through the retail earnings growth roadmap.

Speaker #4: Thanks, Jen. Our efforts over recent periods have really remained focused on both organizing and stabilizing our end-to-end Convenience and Mobility business, including bringing it to self-sufficiency from transitional arrangements.

Teresa Rendo: Thanks, Jen. Our efforts over recent periods have really remained focused on both organizing and stabilizing our end-to-end Convenience and Mobility business, including bringing it to self-sufficiency from transitional arrangements. As we look forward, we have a structured roadmap to unlock earnings growth across retail. In H2, our sequencing of near-term execution is broadly focused on progressing initiatives that have already commenced and are in trial, ahead of medium-term scale benefits that include supply, range, buying, and network through FY27. If we look at our workstreams, and starting with our team and customer obsessed, we are well progressed in how we organize our team as one Viva Energy Retail team, removing duplication and working consistently, with further unlock to be realized in H2.

Speaker #4: As we look forward, we have a structured roadmap to unlock earnings and growth across retail. In half two, our sequencing of near-term execution is broadly focused on progressing initiatives that have already commenced and are in trial.

Speaker #4: Ahead of medium-term scale benefits that include supply, range, buying, and network through FY27. If we look at our work streams, and starting with our team and customer-obsessed approach, we are well progressed in how we organize our team as one Viva Energy Retail team, removing duplication and working consistently, with further unlock to be realized in half two.

Speaker #4: Further to this, we have a clear plan to deepen customer engagement through data-led personalization and by unlocking those customers who are active within our database, starting with Flybuys.

Teresa Rendo: Further to this, we have a clear plan to deepen customer engagement through data-led personalization and unlocking those customers that are active within our database, starting with Flybuys. Retail excellence is our second pillar, and we are centered on strengthening leadership, systems, and processes to lift execution, efficiency, and consistency. My initial observations after four weeks is that the uplift that exists in this space and the efficiency gains are both real and measurable. The efficiency of our supply chain is key. As Jen has already shared, our immediate focus is to have a supply chain that we can fully scale from December 2026 and into 2027, where we will unlock synergy from being just in case on our stock to just in time.

Speaker #4: Retail excellence is our second pillar, and we are centered on strengthening leadership, systems, and processes to lift execution, efficiency, and consistency. My initial observation after four weeks is that the uplift that exists in this space and the efficiency gains are both real and measurable.

Speaker #4: The efficiency of our supply chain is key. As Jen has already shared, our immediate focus is to have a supply chain that we can fully scale from December 2026 and into 2027, where we will unlock synergy from being just in case on our stock to just in time.

Speaker #4: Through embedding a new operating model, we will progress increased control over end-to-end supply and focus that to match demand, so that we carry less safety stock in our stores.

Teresa Rendo: Through embedding a new operating model, we will progress increased control of our end-to-end supply and focus that to match demand so that we carry less safety stock in our stores. Curation of our offer is another key unlock. We are buoyed by our recent quick-win trials that advance our product range review disciplines, better segment our ranges, expand our private label penetration, and grow where we under-index in category. This will improve productivity per square meter, basket penetration, and overall health of inventory. Lastly is the right network and format. It includes continuing our pipeline of network expansion and format optimization that Jen has shared, but more so ensuring that we better embed the learnings in this space to drive down CapEx and improve performance.

Speaker #4: Curation of our offer is another key unlock. We are buoyed by our recent quick-win trials that advance our product range review disciplines, better segment our ranges, expand our private label penetration, and grow where we under-index in category.

Speaker #4: This will improve productivity per square meter, basket penetration, and overall health of inventory. Lastly, there is the right network and format. This includes continuing our pipeline of network expansion and format optimization that Jen has shared, but more so ensuring that we better embed the learnings in this space to drive down capex and improve performance.

Speaker #4: If I was to summarize where we've been and where we're going, the clear message is that FY26 is about completing the retail foundation platform, while FY27 will convert that platform into better execution, improved customer outcomes, and sustained growth.

Teresa Rendo: If I was to summarize on where we've been and where we're going, the clear message is that FY26 is about completing the retail foundation platform, while FY27 will convert that platform into better execution, improved customer outcomes, and sustained growth. We recognize that much of this work is still in delivery. Our focus is on disciplined execution and clear measurement of all benefits, underpinned with a robust retail scorecard. I will now hand over to Carolyn to discuss our financial performance.

Speaker #4: We recognize that much of this work is still in delivery. Our focus is on disciplined execution and clear measurement of all benefits, underpinned with a robust retail scorecard.

Speaker #4: I will now hand over to Carolyn to discuss our financial performance.

Speaker #1: Great, thanks, Theresa. I'll start on slide 17. So, Group EBITDA on a replacement cost basis was $774 million, and that compares with $305 million in the prior corresponding period.

Carolyn Pedic: Great. Thanks, Teresa. I will start on slide 17. Group EBITDA on a replacement cost basis was AUD 774 million. That compares with AUD 305 million in the prior corresponding period, with all three business segments delivering strong earnings growth. NPAT on a replacement cost basis increased to AUD 371 million, despite higher depreciation associated with the commissioning of the ultra-low sulfur gasoline unit and other recently completed investments. Importantly, the strong earnings performance also drove underlying free cash flow of AUD 449 million, reducing net debt to AUD 1.7 billion at 30 June. On slide 18, you can see that operating free cash flow was AUD 604 million. This strong cash conversion was an important contributor to the significant reduction in net debt during the H1.

Speaker #1: With all three business segments delivering strong earnings growth, NPASH on a replacement cost basis increased to $371 million, despite higher depreciation associated with the commissioning of the ultra-low sulfur gasoline unit and other recently completed investments.

Speaker #1: Importantly, the strong earnings performance also drove underlying free cash flow of $449 million, reducing net debt to $1.7 billion at 30 June. Now, on slide 18, you can see that operating free cash flow was $604 million.

Speaker #1: This strong cash conversion was an important contributor to the significant reduction in net debt during the half. And, given we report on a pre-AASB 16 basis, EBITDA continues to remain a good proxy for underlying operating cash generation, with underlying operating free cash flow closely tracking EBITDA.

Carolyn Pedic: Given we report on a pre-AASB 16 basis, EBITDA continues to remain a good proxy for underlying operating cash generation, with underlying operating free cash flow closely tracking EBITDA. Net CapEx was AUD 123 million in the H1. Most 2026 CapEx is weighted towards the H2 and relates to new retail stores, store conversions, and other scheduled project activity across the business. While expenditure is weighted towards the H2, our approach remains disciplined and focused on attractive returns. Today, we reaffirm 2026 CapEx guidance of AUD 350 million to AUD 400 million, which remains materially below 2025. As you can see on the next slide, net debt closed the H1 at AUD 1.7 billion, down more than AUD 350 million during the period.

Speaker #1: Net capex was $123 million in the first half. Most FY26 capex is weighted towards the second half and relates to new retail stores, store conversions, and other scheduled project activity across the business.

Speaker #1: While expenditure is weighted towards the second half, our approach remains disciplined and focused on attractive returns. Today, we reaffirm FY26 capex guidance of $350 million to $400 million.

Speaker #1: Which remains materially below FY25. Now, as you can see on the next slide, net debt closed the first half at $1.7 billion, down more than $350 million during the period.

Speaker #1: This contributed to gearing of 1.5 times total net debt to EBITDA, and that compares with approximately three times for FY25. Elevated first half earnings have supported this outcome, and our focus remains firmly on managing leverage at around two times through the cycle.

Carolyn Pedic: This contributed to gearing of 1.5x total net debt to EBITDA, and that compares with approximately 3x at 2025. Elevated H1 earnings have supported this outcome, and our focus remains firmly on managing leverage at around 2x through the cycle. At 30 June, we have had a really strong liquidity position, supported by substantial undrawn committed facilities and cash on hand, providing significant financial flexibility. Moving to slide 21, this sets out our capital management framework, which remains unchanged. It also sets out the priorities we communicated in the 2025 results. The H1 saw disciplined investment and strong cash generation, supported by a material improvement in the balance sheet. Against that backdrop, the board determined an interim dividend at the top of the policy.

Speaker #1: At 30 June, we have had a really strong liquidity position, supported by substantial undrawn committed facilities and cash on hand, providing significant financial flexibility.

Speaker #1: Now moving to slide 21, this sets out our capital management framework, which remains unchanged. It also sets out the priorities we communicated in the FY25 results.

Speaker #1: The first half saw disciplined investment and strong cash generation, supported by a material improvement in the balance sheet. Against that backdrop, the Board determined an interim dividend at the top of the policy.

Speaker #1: On slide 22, this shows our progress against those capital management priorities we set out, and those were set out in February. The FY26 capex guidance remains at $350 million to $400 million, again materially below FY25.

Carolyn Pedic: On slide 22, this shows our progress against both capital management priorities we set out, and those were set out in February. The 2026 CapEx guidance remains AUD 350 million to AUD 400 million, again, materially below 2025. We improved convenience inventory management in retail, and we reduced inventory levels by approximately AUD 300 million during the H1. In retail, the supply chain rollout remains on track, and we have reworked the network development plan to focus on capital on the highest return opportunities. Discussions with the federal government on FSSP phase 2 to address the refinery's earnings profile are progressing. Our surplus land review continues, with previously identified sales opportunities being considered alongside the federal government's recent fuel security announcements, including the proposed Minimum Stockholding Obligations and Sovereign Fuel Reserve initiatives. Finally, gearing has significantly improved as it has benefited from very strong H1 earnings and favorable cash flow.

Speaker #1: We improved convenience inventory management in retail, and we reduced inventory levels by approximately $300 million during the half. In retail, the supply chain rollout remains on track, and we have reworked the network development plan to focus capital on the highest return opportunities.

Speaker #1: Discussions with the federal government on FSSP phase two, to address the refineries' earnings profile, are progressing. Our surplus land review continues, with previously identified sales opportunities being considered alongside the federal government's recent fuel security announcements, including the proposed minimum stockholding obligations and sovereign fuel reserve initiative.

Speaker #1: And finally, gearing has significantly improved as it has benefited from very strong first-half earnings and favorable cash flow. Our focus again remains on maintaining leverage at approximately two times through the cycle.

Carolyn Pedic: Our focus again remains on maintaining this bridge at approximately 2x through the slide. On slide 23, we can see that the board has determined an interim fully franked dividend of AUD 7.73 cents per share. This represents a 70% payout ratio of replacement cost of input from the Convenience and Mobility and Commercial and Industrial segments, and is at the top end of the company's dividend policy range of 50% to 70%. Consistent with our dividend policy, the Energy and Infrastructure segment is assessed on a full year basis. The dividend outcome reflects a strong performance in H1 and a material improvement in the balance sheet. The dividend will be paid on 30 September 2026 to shareholders on the register at 7 September 2026. Our dividend reinvestment plan remains active and is not underwritten.

Carolyn Pedic: Our focus again remains on maintaining this bridge at approximately 2x through the slide. On slide 23, we can see that the board has determined an interim fully franked dividend of AUD 7.73 cents per share. This represents a 70% payout ratio of replacement cost of input from the Convenience and Mobility and Commercial and Industrial segments and is at the top end of the company's dividend policy range of 50% to 70%. Consistent with our dividend policy, the Energy and Infrastructure segment is assessed on a full year basis. The dividend outcome reflects a strong performance in H1 and a material improvement in the balance sheet. The dividend will be paid on 30 September 2026 to shareholders on the register at 7 September 2026. Our dividend reinvestment plan remains active and is not underwritten.

Speaker #1: Now, on slide 23, we can see that the Board has determined an interim fully franked dividend of $7.73 per share. This represents a 70% payout ratio of replacement cost impact from the Convenience and Mobility and Commercial and Industrial segments, and is at the top end of the company's dividend policy range of 50% to 70%.

Speaker #1: And, consistent with our dividend policy, the Energy and Infrastructure segment is assessed on a full-year basis. So, the dividend outcome reflects strong performance in the first half and a material improvement in the balance sheet.

Speaker #1: The dividend will be paid on 30 September 2026 to shareholders on the register at 7 September 2026. Our dividend reinvestment plan remains active and is not underwritten.

Speaker #1: Eligible shareholders can reinvest their dividends into shares at a 1.5% discount. I'll hand back to Scott to provide an update on the outlook.

Carolyn Pedic: Eligible shareholders can reinvest their dividends into shares at a 1.5% discount. I will hand back to Scott to provide an update on the outlook.

Speaker #2: Thanks, Carolyn. Let me close the presentation by just making a few comments about the outlook for the business through the remainder of the year.

Scott Wyatt: Thanks, Carolyn. Let me close the presentation by just making a few comments about the outlook for the business through the remainder of the year. As mentioned earlier, we enter the H2 with a stronger balance sheet and a clear focus on disciplined execution. While international markets remain volatile, we expect this to benefit our refining and commercial businesses with the continued strength in regional refining margins and our fuel supply arrangements. We are setting ourselves up to optimize production and work around the alkylation unit while we assess long-term options to replace this capability. In the interim, we expect to be able to maintain production above 90% of our normal capacity and maximize the opportunity of the strong refining and margin environment that we see. Our commercial business continues to perform well and typically excels in the volatile market conditions that currently persist.

Speaker #2: As mentioned earlier, we entered the second half with a stronger balance sheet and a clear focus on disciplined execution. While international markets remain volatile, we expect this to benefit our refining and commercial businesses, with continued strength in regional refining margins.

Speaker #2: And our fuel supply arrangements. We are setting ourselves up to optimize production and work around the alkylation unit while we assess long-term options to replace this capability.

Speaker #2: In the interim, we expect to maintain production at about 90% of our normal capacity and maximize the opportunity presented by the strong refining and margin environment that we see.

Speaker #2: Our commercial business continues to perform well and typically excels in the volatile market conditions that currently persist. The team is very focused on achieving our long-term aspirations to organically grow this business and has made further progress on this agenda despite the current environment.

Scott Wyatt: The team are very focused on achieving our long-term aspirations to organically grow this business and have made further progress on this agenda despite the current environment. The retail business has delivered a strong underlying performance, and I am pleased with the progress we are making to restore growth after a challenging couple of years. It is really exciting to have Teresa join us, and she is already making a very positive impact after a short time in the role. I expect us to move quickly from here to build momentum now that we have largely completed the integration of our various retail businesses. We will, of course, have much more to share at our Investor Day in Sydney on 9 November, where we will provide a deeper update on strategy and meet its medium-term priorities. But for now, let me open up to your questions.

Speaker #2: The retail business has delivered a strong underlying performance, and I'm pleased with the progress we're making to restore growth after a challenging couple of years.

Speaker #2: It's really exciting to have Theresa join us, and she's already making a very positive impact after a short time in the role. I expect us to move quickly from here to build momentum, now that we have largely completed the integration of our various retail businesses.

Speaker #2: We will, of course, have much more to share at our event today in Sydney on the 9th of November, where we will provide a deeper update on strategy and medium-term priorities.

Speaker #2: But for now, let me open up to your questions.

Speaker #3: Thank you. If you wish to ask a question, please press the star key followed by the number one on your telephone keypad. If you wish to cancel your request, please press star two. And if you're on a speakerphone, please pick up the handset to ask your question.

Operator: Thank you. If you wish to ask a question, please press the star key followed by the number 1 on your telephone keypad. If you wish to cancel your request, please press star 2, and if you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Mark Wiseman from Macquarie Group. Please go ahead.

Speaker #3: Your first question comes from Mark Wiseman from Macquarie Group. Please go ahead.

Speaker #4: Oh, good day, Scott and team. Thanks for the update here. Obviously, we've seen a strong set of results, but quite a large divergence between Amples and Vivas.

Mark Wiseman: Hi. Good day, Scott and team. Thanks for the update here. Obviously, we have seen a strong set of results, but quite a large divergence between Ampol's and Viva Energy's, and part of that goes back to the supply chain models that you each run. I understand Vitol created the entity and brings a lot of value to the relationship in terms of sourcing and securing supply. I just wonder if you could talk us through as you come up to this renewal with Vitol in 2028, what levers are available to you, to reduce the dependence on Vitol and start to stand up your own supply chain and enjoy some of those benefits over time, and how long could that take?

Speaker #4: And part of that goes back to the supply chain models that you each run. I understand Vital created the entity and brings a lot of value to the relationship in terms of sourcing and securing supply.

Speaker #4: But I just wonder if you could talk us through, as you come up to this renewal with Vital in 2028, what levers are available to you to reduce the dependence on Vital and start to stand up your own supply chain?

Speaker #4: And enjoy some of those benefits over time. And how long could that take?

Speaker #2: Yeah, thanks, Mark. I mean, obviously, the relationship with Vital has been in place for what will be 10 years in 2028. It is the model that was set up at the creation of Viva Energy.

Scott Wyatt: Yeah. Thanks, Mark. Obviously, the relationship with Vitol has been in place for what will be 10 years in 2028. It is the model that was set up at the creation of Viva Energy. Look, it has performed well over that time. I think, look, even in the H1 that we have just had, you can see that it has delivered significant value. If you look at the contribution from our term supply agreements in the H1 across, which has been allocated to both retail and commercial, it is about AUD 110 million of value that has been created over that time, and that is obviously, without us running our own trading operations in Singapore. So, it does provide important support, which is mostly particularly valuable during periods of high volatility like we have just been through, and that was the case during the early days of the Ukraine crisis as well.

Speaker #2: And look, it has performed well over that time. And I think, look, even in the half that we've just had, you can see it has delivered significant value if you look at the contribution from our term supply agreements in the first half, which has been allocated to both retail and commercial.

Speaker #2: It's about $110 million of value that's been created over that time, and that's obviously without us running our own trading operations in Singapore.

Speaker #2: So it does provide important support, which is particularly valuable during periods of high volatility, like we've just been through. That was the case during the early days of the Ukraine crisis as well.

Scott Wyatt: So, it does provide important support, which is mostly particularly valuable during periods of high volatility like we have just been through, and that was the case during the early days of the Ukraine crisis as well. But look, as you point out, the agreement, it comes up for renewal in 2028. It is an option that Vitol have, but it is an option that we will sit down and formally review with them ahead of that time. It has been in place for a long time, and it has continued to evolve over that time in terms of how we work together as well. So we will certainly take the opportunity to explore how a renewal might look and what we would want from that with them over the next year. So that is a bit in front of us, Mark, but certainly a rush in our mind.

Speaker #2: But look, as you point out, the agreement comes up for renewal in 2028. It's an option that Vitol will have, but it's an option that we'll sit down and formally review with them.

Scott Wyatt: But look, as you point out, the agreement, it comes up for renewal in 2028. It is an option that Vitol have, but it is an option that we will sit down and formally review with them ahead of that time. It has been in place for a long time, and it has continued to evolve over that time in terms of how we work together as well. So we will certainly take the opportunity to explore how a renewal might look and what we would want from that with them over the next year. So that is a bit in front of us, Mark, but certainly a rush in our mind. It comes from a point of view of, it has been a very strong, good relationship that we have had. As I have just said, delivered important value during critical periods.

Speaker #2: Ahead of that time, it has been in place for a long time, and there's certainly— and has continued to evolve over that time in terms of how we work together as well.

Speaker #2: So, we'll certainly take the opportunity to explore how a renewal might look, and what we would want from that, with them over the next year.

Speaker #2: So that's a bit in front of us, Mark, but certainly a rush in our mind. But it comes from a point of view of it's been a very strong, good relationship that we've had.

Scott Wyatt: It comes from a point of view of, it has been a very strong, good relationship that we have had. As I have just said, delivered important value during critical periods.

Speaker #2: And as I've just said, delivered important value during critical periods.

Speaker #4: Okay. Thanks Scott. Just.

Mark Wiseman: Okay. Thanks, Scott. Cheers.

Speaker #3: Thank you. Your next question comes from Tom Allen from UBS. Please go ahead.

Operator: Thank you. Your next question comes from Tom Allen from UBS. Please go ahead.

Speaker #2: Hey Tom.

Scott Wyatt: Hey, Tom.

Speaker #3: Pardon me, Tom, your line is now live.

Speaker #5: Good morning, Scott, Carolyn, and the broader team. Apologies about that. I'd just like to understand if I can just get more on the economics that you're targeting on the unattended offer.

Operator: Pardon me, Tom. Your line is now live.

Tom Allen: Good morning, Scott, Carolyn, and the broader team. Apologies about that.

Tom Allen: Good morning, Scott, Carolyn, and the board team. Apologies about that.

Scott Wyatt: Sure.

Tom Allen: I would just like to understand, if I can, just more on the economics that you are targeting on the unattended offer. I think genuine comments on the call were that the payback periods are aligned with industry norms. Are we right to assume about AUD 300,000 in CapEx and AUD 350,000 in incremental EBITDA per site in the way that we apply our modeling for this opportunity going forward?

Speaker #5: I think, Jen, your comments on the call were that the payback periods are aligned with industry norms. So, are we right to assume about $300,000 in capex and $350,000 in incremental EBITDA per site in the way that we apply our modeling for this opportunity going forward?

Speaker #6: I think that would be a fair assumption, yes.

Jennifer Gray: I think that would be a fair assumption, yes.

Speaker #5: Easy, play on. Okay. In C&I, we've seen some growth in petrol and diesel on PCP. Should we expect more growth here, just as large fuel users who may have historically sought to save a few cents per litre on fuel costs by accessing regional and spot markets now potentially look to lock away a more reliable source of long-term supply with a fuel supplier like Viva?

Tom Allen: Easy, play on. In C&I, we have seen some growth in petrol and diesel on PCP. Should we expect more growth here just as large fuel users who may have historically sought to save a few cents per liter on fuel costs by accessing regional and spot markets now potentially look to lock away a more reliable source of long-term supply with a fuel supplier like Viva Energy? I just ask because C&I has been a real strength to the business. I would like to understand if there is more growth that could come through here.

Speaker #5: I just ask because C&I has been a real strength to the business. I'd like to understand if there's more growth that could come through here.

Speaker #2: Thanks, Tom. I've had that today.

Scott Wyatt: Thanks, Tom. I will hand that to Danny.

Speaker #7: Yeah, that might be the case, obviously, as you do always see some very different behaviors from one segment to the other. Certainly, there will be some more growth available, in particular in aviation, but business has been significantly disrupted in the first half.

Denis Urtizberea: Well, that might well be the case. Obviously, as you do, we see some very different behaviors from one segment to the other. Certainly, there would be some more growth available, in particular in aviation. That business has been significantly disrupted in the H1. How people are going to play and what kind of contracting arrangement that we look for in the future is a bit of a question mark at the moment. The market has stabilized. It is not very clear who is going to play how in the near future. But overall, the business is still growing, and the fundamentals of our business definitely look very strong.

Danny Urtizberea: Well, that might well be the case. Obviously, as you do, we see some very different behaviors from one segment to the other. Certainly, there would be some more growth available, in particular in aviation. That business has been significantly disrupted in the H1. How people are going to play and what kind of contracting arrangement that we look for in the future is a bit of a question mark at the moment. The market has stabilized. It is not very clear who is going to play how in the near future. But overall, the business is still growing, and the fundamentals of our business definitely look very strong.

Speaker #7: How people are going to play and what kind of contracting arrangement they will look for in the future is a bit of a question mark at the moment.

Speaker #7: The market has stabilized. It's not very clear who is going to play how in the near future. But overall, the business is still growing, and the fundamentals of our business definitely look very strong.

Speaker #7: And certainly, this period of volatile environment is benefiting us and encourages a number of people who would normally treat that a bit more transactionally to look at their business from a more strategic lens.

Denis Urtizberea: Certainly, this period of volatile environment is benefiting us, and encourages a number of people who would normally transact a bit more transactionally to look at their business from a more strategic lens, and certainly prefer to deal with us in those circumstances. That is probably the reason why, as Scott was mentioning, a higher cost environment is usually beneficial to commercial, because we are not encouraging people to pay transactionally. Does that answer your question?

Danny Urtizberea: Certainly, this period of volatile environment is benefiting us, and encourages a number of people who would normally transact a bit more transactionally to look at their business from a more strategic lens, and certainly prefer to deal with us in those circumstances. That is probably the reason why, as Scott was mentioning, a higher cost environment is usually beneficial to commercial, because we are not encouraging people to pay transactionally. Does that answer your question?

Speaker #7: And certainly, they prefer to deal with us in those circumstances. So that’s probably the reason why Scott was mentioning a higher cost environment. It’s usually beneficial to commercial, because it’s not encouraging people to play transactionally.

Speaker #7: I'll answer your question.

Speaker #5: It does. It does. Thank you. And if I could just sneak one more in—Scott, you've shared some color in the release today on the opportunities for Viva.

Tom Allen: It does. Thank you. If I could just sneak one more. Scott, you have shared some color in the release today on the opportunities for Viva arising from the government's AUD 14.8 billion Fuel Security reforms. Just on refining retention, how should we frame the scope of outcomes here? Is it more likely that we see another adjustment to the FSSP support level, or perhaps is it more likely a commonwealth subsidy on the growth investment like we saw for the ultra-low sulfur gasoline project? Similarly, how should we scope the funding requirements for Viva to support building or supporting the Australian Fuel Security Reserve and meeting the new MSOs obligations?

Speaker #5: Arising from the government's $14.8 billion fuel security reforms, just on refining retention, how should we frame the scope of outcomes here? Is it more likely that we see another adjustment to the FSSP support level, or perhaps is it more likely a Commonwealth subsidy on the growth investment, like we saw for the ultra-low sulfur gasoline project?

Speaker #5: And similarly, how should we scope the funding requirements for Viva to support building or supporting the Australian fuel reserve and meeting the new MSL obligations?

Speaker #2: Yeah, thanks, Tom. There’s a few questions on that one. Look, I mean, the FSSP—the current scheme—has obviously, I mean, it’s been a milestone program, really, I think, back in 2021.

Scott Wyatt: Yeah. Thanks, Tom. There's a few questions in that one. The FSSP, the current scheme has obviously It's been a milestone program, really. I think back in 2021, it was set up to provide the support that's necessary for us to continue refining. As we've covered before, it unfortunately hasn't kept up with the cost of doing business in Australia, and there's been periods where it hasn't provided the level of support that we really needed to maintain positive cash in that part of the business. It was particularly pleasing to see the federal government update that at the beginning of this year, and I think that helps set us up to navigate the next few years until the end of that agreement in 2030.

Speaker #2: It was set up to provide the support that was necessary for us to continue refining. And as we've covered before, it unfortunately hasn't kept up with the cost of doing business in Australia, and there's been periods where it's been—yeah, it hasn't provided the level of support that we really needed to maintain positive cash in that part of the business.

Speaker #2: It was particularly pleasing to see the federal government update that at the beginning of this year, and I think that helps set us up to navigate the next few years until the end of that agreement in 2030.

Speaker #2: So, a new arrangement—which we're currently in discussions about—takes us well beyond 2030, into the next decade, potentially through to the end of the decade.

Scott Wyatt: A new arrangement, which we're currently in discussions with, takes us well beyond 2030 into the next decade, potentially through to the end of the decade. It's a very long To say it's a way in the future, it goes for a considerable period of time. I don't think the current FSSP really provides a framework that's going to be robust enough over that period and provide a necessary return on capital through what will be a pretty uncertain time for refining.

Scott Wyatt: A new arrangement, which we're currently in discussions with, takes us well beyond 2030 into the next decade, potentially through to the end of the decade. It's a very long to say it's a way in the future, it goes for a considerable period of time. I don't think the current FSSP really provides a framework that's going to be robust enough over that period and provide a necessary return on capital through what will be a pretty uncertain time for refining.

Speaker #2: It's a very long—it's a way in the future. It goes for a considerable period of time. So I don't think the current FSSP really provides a framework that's going to be robust enough over that period and provide a necessary return on capital through what will be a pretty uncertain time for refining.

Speaker #2: So, I think it's going to have... it'll have to be a variation on FSSP that also provides a component that delivers that capital return.

Scott Wyatt: I think it will have to be a variation on FSSP that also provides a component that delivers that capital return, to allow us to make that sort of commitment, move forward with confidence from an investment perspective, and ensure that whatever investments we make in refining is going to stand up relative to other investment opportunities that we have across the rest of the business, because those are the choices that we have. That's kind of at a high level the broad framework that we would be looking for, and that's how we're engaging with government at this point in time. Obviously, now we've got also government fuel storage being will likely be built and then lifting an MSOs. They're two different programs. The government storage program will obviously be a program that's funded by government.

Speaker #2: To allow us to make that sort of commitment, move forward with confidence from an investment perspective, and ensure that whatever investments we make in refining are going to stand up relative to other investment opportunities that we have.

Speaker #2: Across the rest of the business, because those are the choices that we have. So that's kind of, at a high level, the broad framework that we would be looking for.

Speaker #2: And that's how we're engaging with government at this point in time. Obviously, we've now also got government fuel storage likely to be built, and then lifting in MSOs.

Speaker #2: Now, I mean, the two different programs—the government storage program will obviously be a program that's funded by the government. And the way the consultation paper has been framed, it will be looking for industry to provide services to both build storage and store product on behalf of the government over a long-term commitment.

Scott Wyatt: The way the consultation paper's been framed is we're looking to industry to provide services to both build storage and store product on behalf of government over a long-term commitment. I think that's potentially attractive for us, particularly around our refining business, to further strengthen that business. Additional storage does provide economic benefits to the refinery, but potentially, and with government funding, I think a potentially attractive investment proposition. MSOs is ultimately a cost on industry to fund, obviously reflects the size of the business that we have. That's a little bit more challenging to navigate in the sense that it is an additional cost. We would need to see good commercial benefits from building that storage to support the business that we have, and a pathway to recovering that cost from the market.

Speaker #2: So I think that's potentially attractive for us, particularly around our refining business, to further strengthen that business, provide additional storage, does provide economic benefits to the refinery, but potentially—and with government funding—I think it's a potentially attractive investment proposition.

Speaker #2: MSOs are ultimately a cost on the industry to fund and, obviously, they reflect the size of the business that we have. That's a little bit more challenging to navigate in the sense that it is an additional cost. We would need to see good commercial benefits from building that storage to support the business that we have.

Speaker #2: And a pathway to recovering that cost from the market. I think that's a bit to work through and better understand, and look at the opportunities that we have around the country where we can actually make good use of any funding that might be available to support the development of storage to meet the MSO obligations.

Scott Wyatt: I think that is a bit to work through and better understand and look at the opportunities that we have around the country where we can actually make good use of any funding that might be available to support the development of storage to meet the MSO obligations. That, I think, will be something that will come out of the consultation process that has just been kicked off, which we will obviously participate in and watch closely.

Speaker #2: So I think it will be something that comes out of the consultation process. It's just been kicked off, so we'll obviously participate and watch closely.

Speaker #5: Thanks, Scott. I appreciate that detail.

Tom Allen: Thanks, Scott. Appreciate that detail.

Speaker #6: Thank you, Martin from ANP. Please go ahead.

Operator: Thank you. Your next question comes from Adam Martin from E&P. Please go ahead.

Speaker #7: Good morning, Scott. Jen, Theresa, Caroline, Dennis. First question, just on retail fuel margins in July and August—they're quite low. We're getting some industry feedback that Viva is trialing different things around pricing.

Adam Martin: Morning, Scott, Jen, Teresa, Carolyn, Dennis. Just first question just on retail fuel margins in July, August. They are quite low, getting some industry feedback that Viva is trialing different things around pricing. Can you perhaps talk through that? Does that relate to that allocated supply benefit as well in CNM, please?

Adam Martin: Morning, Scott, Jen, Teresa, Carolyn, Danny. Just first question just on retail fuel margins in July, August. They are quite low, getting some industry feedback that Viva is trialing different things around pricing. Can you perhaps talk through that? Does that relate to that allocated supply benefit as well in CNM, please?

Speaker #7: Can you perhaps talk through that? Does that relate to that allocated supply benefit as well in Q2, please?

Speaker #8: Yeah, I think the interesting thing when you look across July and August fuel margins is to remember that we actually had an excise revaluation across both July and August.

Jennifer Gray: Yeah, I think the interesting thing when you look across July and August fuel margins is to remember that we actually had an excise revaluation across both July and August. If you are comparing AIP data to retail board prices, that will not be reflected in that data. I think it would also be fair to say that we saw, after a period of quite constrained demand through March and April, certainly plenty of product in the market. That naturally played out across retail forecourts. From our perspective, we continue to offer a competitive price for our customers, and we continue to do that, thinking about the segments we are operating in. We are very fortunate to have a low-cost channel to market through our Liberty Oil convenience offer and a best-in-class loyalty and docket redemption offer through our Shell OTR Reddy Express offer.

Speaker #8: And if you're comparing AIP data to retail board prices, that won't be reflected in that data. I think it would also be fair to say that we saw, after a period of quite constrained demand through March and April, certainly plenty of product in the market.

Speaker #8: And that naturally played out across retail forecourts. From our perspective, we continue to offer a competitive price for our customers, and we continue to do that, thinking about the segments we're operating in.

Speaker #8: So we’re very fortunate to have a low-cost channel to market through our Liberty Oil Convenience offer, and a best-in-class loyalty and docket redemption offer through our Shell OTR Ready Express offer.

Speaker #8: And that's how we think about our pricing strategies for fuel across the network we operate.

Jennifer Gray: That is how we think about our pricing strategy for fuel across the network we operate.

Speaker #7: Okay, thanks. That's good color. Just on refining, Scott, just thinking about cost and insurance and that post, are there any costs that we should think about in the next 12 months that are outside insurance, or any differences in the way you're going to run the refinery?

Adam Martin: Okay. Thanks. That is good color. Just on refining, Scott, just thinking about costs and insurance and that post, are there any costs that we should think about next 12 months that are outside insurance or any differences in the way you are going to run the refinery? Just trying to think about OpEx or maintenance CapEx, that sort of stuff, please.

Speaker #7: Just trying to think about opex or maintenance capex, that sort of stuff, please.

Speaker #2: That are not really. I think, obviously, in the aftermath of the incident and managing this lower production through that period is where we brought production back online.

Scott Wyatt: No, not really. I think, look, obviously, in the aftermath of the incident and the managing this lower production through that period, as we brought production back online, we did incur additional costs, both in terms of managing the incident and managing a pretty inefficient production period through that H1. So that is a bit reflected in the higher OpEx in the H1. We have done a lot of work to stabilize operations and get comfortable running the plant in a different mode than what we would traditionally do. We obviously need to do that for the long term as we work through the replacement of the unit. So there is still a little bit more to do to really settle that down, but we are well advanced, and I expect to get to pretty optimal production mode through the course of the next month or two.

Speaker #2: We did incur additional costs, both in terms of managing the incident and managing a pretty inefficient production period through that first half. So, that's a bit reflected in the higher opex in the first half.

Speaker #2: We have done a lot of work to stabilize operations and get comfortable running the plant in a different mode than what we would have traditionally done.

Speaker #2: And we obviously need to do that for the long term as we work through the replacement of the units. So there's still a little bit more to do to really settle that down, but we're well advanced, and I expect to get to pretty optimal production mode through the course of the next month or two.

Speaker #2: So I think, yeah, I think that the main impact is to refining, is really what we've called out. And the way to think about it is that production will be somewhat less than 100%, but if you work on that sort of guidance, that sort of covers all of the factors that go into running in the mode that we’ll be running in for an extended period of time.

Scott Wyatt: I think the main impact as to refining is really what we have called out and the way to think about it is that production will be somewhat less than 100%. If you work on that sort of guidance, that sort of covers all of the factors that go into running in the mode that we will be running in for an extended period of time.

Speaker #7: Okay, thank you. That's all from me.

Adam Martin: Okay. Thank you. That is all from me.

Speaker #6: Thank you. Your next question comes from Robco from MS. Please go ahead.

Operator: Thank you. Your next question comes from Rob Koh from NS. Please go ahead.

Speaker #4: Yes, good morning. Can I ask about the refinery? If you could give us any steer on how we should be thinking about insurance recovery, looking at the financials?

Rob Koh: Yes, good morning. Can I ask about the refinery, if you could give us any steer on how we should be thinking about insurance recovery? Looking at the financials, looks like the impairments and disposals is around AUD 20 million, AUD 25 million. Is that the right number we should be thinking?

Speaker #4: Looks like the impairments and disposals are around $20 to $25 million. Is that the right number we should be thinking?

Speaker #8: Thanks, Rob. So the number that you're looking at—that's just a historical, written-down value of the assets that were damaged in the fire.

Scott Wyatt: Yeah.

Scott Wyatt: Carolyn.

Carolyn Pedic: Thanks, Rob. The number that you are looking at, that is just a historical written-down value of the assets that were damaged in the fire. That is not instructive when thinking about a replacement of a unit, which, as Scott shared, we are working through the details on. That should be viewed separately.

Speaker #8: So that's not instructive when thinking about a replacement of a unit, which Scott shared we're working through the details on. So that should be utilized separately.

Speaker #4: Yeah. Yeah. Okay. And then, thinking about eventual replacement of the alkylation unit and the other government policies, can you talk to any ability to increase capacity or increase production of diesel, or even incorporation of renewable diesel into the mix?

Rob Koh: Yeah. Okay. Thinking about the eventual replacement of alkylation unit and the other government policies, can you talk to any ability to increase capacity or increase production of diesel or even incorporation of renewable diesel into the mix?

Speaker #2: Yeah. I mean, we're certainly, Rob, certainly looking at what's the right technology solution to move forward with the replacement of the alkylation capability that we had to see, the opportunity to look at new technologies, and also with a mindset of what's the right production to serve us well into the next decade, when obviously demands are going to be reshaped—particularly, probably, a decline in gasoline demand over that period.

Scott Wyatt: Yeah, we are certainly, Rob, looking at what is the right technology solution to move forward with the replacement of the alkylation capability that we had. Certainly an opportunity to look at new technologies, and also with a mindset of what is the right production that will serve us well into the next decade, when obviously demands are going to be reshaped, particularly probably a decline in gasoline demand over that period. It is a bit work in progress, but certainly very much on our mind about the selection of the technology. As you probably know, we have been working on projects to process biogenic feedstocks and produce lower carbon fuels through our refinery. Geelong, those projects remain really very interesting to us, and I think with the right policy settings around particularly demand side policies for lower carbon fuels, they are projects that I think can be commercially sensible for us to progress.

Speaker #2: So that's a bit of work in progress, but certainly very much on our mind about the selection of the technology. We have, as you probably know, been working on projects to process biogenic feedstocks and produce lower carbon fuels through our refinery. Those projects remain really very interesting to us.

Scott Wyatt: Geelong, those projects remain really very interesting to us, and I think with the right policy settings around particularly demand side policies for lower carbon fuels, they are projects that I think can be commercially sensible for us to progress. That is quite dependent from the work we need to do around the alkylation unit. But I think if we are going to run the refinery for another through the end of 2040, having capacity to produce lower carbon fuels is a sensible and attractive set of projects for us to be looking at.

Speaker #2: And I think, with the right policy settings around particularly demand-side policies for lower-carbon fuels, the projects that I think can be commercially sensible for us to progress—that is quite independent from the work we need to do around the alkylation unit.

Scott Wyatt: That is quite dependent from the work we need to do around the alkylation unit. But I think if we are going to run the refinery for another through the end of 2040, having capacity to produce lower carbon fuels is a sensible and attractive set of projects for us to be looking at.

Speaker #2: But I think we're going to run the refinery through the end of 2040. Having capacity to produce lower carbon fuels is a sensible and attractive set of projects for us to be looking at.

Speaker #4: Okay, great. Thank you very much.

Rob Koh: Okay, great. Thank you very much.

Speaker #6: Thank you. Your next question comes from Gordon Ramsay from RBC Capital Markets. Please go ahead.

Operator: Thank you. Your next question comes from Gordon Ramsay from RBC Capital Markets. Please go ahead.

Speaker #7: Well, thank you for delivering a solid result today. Scott, just following up on your comment on guidance for the refinery production volumes. I'm just trying to get my head around why you're not at 100%, assuming just the alkylation unit was damaged and you can import alkylate and blend.

Gordon Ramsay: Well, thank you for delivering a solid result today. Scott, just following up on your comment on guidance on the refinery production volumes. I am just trying to get my head around why you are not at 100%, assuming just the alkylation unit was damaged and you can import alkylate and blend. Am I missing something?

Speaker #7: Am I missing something?

Speaker #2: No, I think it's a proxy, Gordon, for a range of impacts from losing the alkylation unit. I think the main impact is that the alkylation unit processes gas, and particularly LPG, and turns that into alkylate, which is used in high-octane fuels such as premium fuels and add gas.

Scott Wyatt: No, I think it is a proxy, Gordon, for a range of impacts from losing the alkylation unit. I think the main impact is that the alkylation unit processes gas, and particularly LPG, and turns that into alkylate, which is used in high octane fuels such as premium fuels and avgas. We therefore have a surplus of LPG at the current time that we need to manage, and that does have knock-on impacts to optimal production across the plant. There are projects that we are working on at the moment to allow us to manage that gas balance better than we otherwise will be able to set us up to be able to do that over the long term. So I think we get closer and closer to 100% as we get the capacity installed.

Speaker #2: We therefore have a surplus of LPG at the current time that we need to manage, and that does have knock-on impacts to optimal production across the plant.

Speaker #2: There are projects that we're working on at the moment to allow us to manage that gas balance better than we otherwise would be, instead of just stuff to be able to do that over the long term.

Speaker #2: So I think we get closer and closer to 100% as we get the capacity installed. But obviously, we lose the margin associated with what we gain from producing alkylate, producing high-octane fuels.

Scott Wyatt: But obviously we lose the margin associated with produce that we gain from producing alkylate, producing high octane fuels. That is not a production impact necessarily per se, but the guides we have given is a proxy for all the different effects that come from running a refinery without the alkylation unit. So it is a simple measure, Gordon, and it is one that we will reassess as we get clearer on the long-term impairments to what extent that there are any, and then if we need to update guidance because we have got a clear review, we will. But for now, that is the best guidance we can give.

Speaker #2: Now, that's not a production impact necessarily, per se, but the guidance we've given is a proxy for all the different effects that come from running the refinery without the alkylation unit.

Speaker #2: So, it's not—it's a simple measure, Gordon, and one that we'll reassess as we get clearer on the long-term impairments, to the extent that there are any. And if we need to update guidance because we've got a clearer view, we will.

Speaker #2: But for now, that's the first guidance we can give.

Speaker #7: Okay, thanks, Scott. And then just moving on to the portfolio review, you said you're evaluating surplus land sale opportunities. Is that mainly retail sites, or does it include other assets?

Gordon Ramsay: Okay, thanks, Scott. Then just moving on to the portfolio review. You said you were evaluating surplus land sale opportunities. Is that mainly retail sites or does it include other assets?

Speaker #2: No. The retail sites are all leasehold. So we certainly manage that portfolio of assets, but more as a leasehold decision, and as leases come up—do we want to renew, and how do we develop those sites?

Scott Wyatt: No, the retail sites are all leasehold, so we certainly manage that portfolio of assets, but more as a leasehold decision. As leases come up, do we want to renew and how do we develop those sites. So that is less of a divestment opportunity. So it is mostly land associated with our operating facilities around terminals and the refining business, the surplus land that we are unlikely to use. As Carolyn said, we are just reevaluating that at the current time to understand what land we might need for any storage opportunities that we wish to pursue. So I think that is obviously a new consideration that we just need to take into account. But otherwise, yeah, there is certainly surplus land around our major facilities, particularly that is highly valuable and not necessary to support our long-term business.

Speaker #2: So that's less of a divestment opportunity. But it's mostly land associated with our operating facilities around terminals and refining business, surplus land that we are unlikely to use.

Speaker #2: Now, as Carolyn said, we're just re-evaluating that at the current time to understand what land we might need for any storage opportunities that we wish to pursue.

Speaker #2: So, that's—I think that's obviously a new consideration that we just need to take into account. But otherwise, yeah, there is certainly surplus land around our major facilities, particularly this highly valuable land, and it's not necessary to support our long-term business.

Speaker #7: Do you have any sense of the value of that in round figures? Is it material?

Gordon Ramsay: Any feel for the value of that in round figures? Is it material?

Speaker #2: It's material, but we haven't—I mean, we're in early days. We're still working through how we would, what we would look to sell, over what timeframe, and at what value.

Scott Wyatt: It's material, but we haven't. It's early days, we're still working through what we would look to sell, over what time frame and what value. I think that's one for another update, Gordon.

Speaker #2: So, I think that's one for another update, Gordon.

Speaker #7: Okay. And then just lastly, I'm just following up on the question about the virtual supply arrangement expiring in 2028. Where do you sit at the moment with the Shell naming rights?

Gordon Ramsay: Okay. Just lastly, I'm just following the question on the oil supply arrangement expiring 2028. Where do you sit at the moment with the Shell naming rights? Is there a time frame on that? Can you just explain the mechanics? Is it the option on their side or yours or both?

Speaker #7: Is there a timeframe on that? And can you just explain the mechanics? Is it an option on their side, or yours, or both?

Speaker #3: It's BLM, sorry. So, the Shell brand's license agreement is due to expire in 2029, and that optionality would be through a mutual agreement.

Denis Urtizberea: Shell branding.

Danny Urtizberea: Shell branding.

Scott Wyatt: It'd be our. Oh, sorry. The Shell brands license agreement is due to expire in 2029. That optionality, it would be through a mutual agreement.

Speaker #7: Got it. Okay. Thank you.

Gordon Ramsay: Got it. Okay, thank you.

Speaker #6: Thank you. Your next question comes from Ewan Minogue from Bar and Joey. Please go ahead.

Operator: Thank you. Your next question comes from Uwan Minogue from Barrenjoey. Please go ahead.

Speaker #4: Good morning, team. Congratulations on the result. Can you just talk us through what refining margins you've been seeing through August so far, and whether you've seen any reduction in crude premia and hence an improvement in margins?

Uwan Minogue: Good morning, team. Congratulations on the result. Can you just talk us through what refining margins you have been seeing through August so far and whether you have seen any reduction in crude premiums and hence improvement in margins?

Ewa Minogue: Good morning, team. Congratulations on the result. Can you just talk us through what refining margins you have been seeing through August so far and whether you have seen any reduction in crude premiums and hence improvement in margins?

Speaker #2: Yeah, I think obviously the July result reflects – obviously reflects the market, also reflects the performance of the site through that period without the alkylation unit, and also reflects the crude premia that were in place through that time.

Scott Wyatt: Yeah. I think, look, obviously the July result reflects market, also reflects the performance of the site through that period about the alkylation unit, and also reflects the crude premiums that were in place through that time. You might recall that we have previously talked about experiencing higher crude premiums in Q3 as we started purchasing for those, which was at the early part of Q2. Crude premiums were certainly elevated through the course of the early part of Q3. That is obviously reflected in those results as well. That is all moderated quite a bit since that point in time. So the pressure on crude premiums has reduced. We are getting obviously better at optimizing and running the plant around the alkylation unit as well. Some of those effects will reduce as we go forward.

Speaker #2: And you might recall that we've previously talked about experiencing higher crude premiers in quarter three as we started as we started purchasing for those, which was sort of early part of quarter two.

Speaker #2: So, crude premia were certainly elevated through the course of the early part of quarter three, and that's obviously reflected in those results as well.

Speaker #2: And that's all moderated quite a bit since that. So the pressure on crude premiums has reduced. And we're getting, obviously, better at optimizing and running the plant around the alkylation unit as well.

Speaker #2: Some of those effects will reduce as you go forward.

Speaker #4: All right. Thanks, guys.

Uwan Minogue: Great. Thanks, guys.

Ewa Minogue: Great. Thanks, guys.

Speaker #6: Thank you. Your next question comes from Michael Samotis from Jefferies. Please, go ahead.

Operator: Thank you. Your next question comes from Michael Simotas from Jefferies. Please go ahead.

Speaker #5: Hi, good morning everyone. Thanks for taking my question. The first one from me is, I just want to understand the convenience retail earnings bridge that you've outlined on slide 11.

Michael Simotas: Good morning, everyone. Thanks for taking my question. First one from me is, I just want to understand the convenience retail earnings bridge that you have outlined on slide 11. I have two questions on that. The first one is the fuel margin normalization bucket of AUD 31 million to normalize the H1 2025 number. Can you just talk us through that? I just want to understand the allocated supply benefits and whether the result would have been effectively AUD 56 million worse, if not for that Vitol agreement, giving you a fortuitous position on your term supply. Because if we adjust for that, the H1 underlying performance would have been down quite significantly on the H2 of 2025.

Speaker #5: And two questions I've got on that. The first one is that fuel margin normalization bucket of $31 million to normalize the first half '25 number.

Speaker #5: Can you just talk us through that? And then, I just want to understand the allocated supply benefits, and whether the result would have been effectively $56 million worse if not for that Vito agreement giving you a fortuitous position on your term supply. Because if we adjust for that, the first half underlying performance would have been down quite significantly on the second half of '25.

Speaker #2: Yeah, sure. Michael, maybe I'll just try and address that. So the first part of that bridge, which you touched on, is to recognize that the first half last year was obviously a disappointing period of time from a performance point of view, and particularly around the returns that we were generating from fuels during that period in the first quarter.

Scott Wyatt: Yeah, sure, Michael, maybe I can try and address that. The first part of that bridge, which you touched on, is to recognize that the H1 last year was obviously a disappointing period of time from a performance point of view, and particularly around the returns that we were generating from fuels during that period in the Q1. So we have normalized that to give it more apples-for-apples comparison, but also brought back the volume that would have been, so the margin that we would have generated had we owned Liberty business throughout that particular period, and also the margin uplift associated with the transition from BP supply to Viva supply over that period. Again, just to build an apples-for-apples starting point for H1. So that is what is in the 31.

Speaker #2: So we've normalized that to give a bit more of an apples-for-apples comparison, but also brought back the impact of the volume that would have been—so the margin that we would have generated had we owned the Liberty business throughout that particular period.

Speaker #2: And also the margin uplift associated with the transition from BP supply to Viva supply over that period—again, just to build an apples-to-apples starting point for the first half.

Speaker #2: So that's what's in the 31. There's two, you're right. There's obviously a benefit that's been allocated to both the Commercial business and the Retail business from the supply benefits that we've incurred, captured from the term supply arrangements.

Scott Wyatt: You are right, there is obviously a benefit that has been allocated to both the commercial business and the retail business from the supply benefits that we have captured from the term supply arrangements. We do not have a business unit that covers supply. We typically allocate that to the business units, which is what we have done in this case. Roughly half has gone to retail and half to commercial. That was obviously material during the H1, given that the term agreement had been struck prior to the Middle East. On one level, that is unlikely to repeat going forward. That said, we still have term supply arrangements in place. We are still operating in a period of high volatility, and we expect that term agreement to still provide some benefit moving forward. The other one-off in there, which I would call out, which will not repeat is the excise reduction that occurred.

Speaker #2: We don't have a business unit that covers supply, so we typically allocate that to the business units, which is what we've done in this case.

Speaker #2: So roughly half has gone to retail and half to commercial. That was obviously material during the first half. Given that the term agreement had been struck prior to the Middle East, I think there's—so, periodic on one level—that is, you could argue that's unlikely to repeat going forward.

Speaker #2: That said, we still have term supply arrangements in place. We're still operating in a period of high volatility, and we expect that term agreement to still provide some benefit.

Speaker #2: Moving forward, the other one-off in there, which I would call out—and which is not repeated, which won't repeat—is the excise, the reduction.

Scott Wyatt: The other one-off in there, which I would call out, which will not repeat is the excise reduction that occurred. We passed that on in full. That is obviously a significant cost to the business, which obviously is a one-off and does not repeat. If you want to look at those two things as being unlikely to repeat, you need to add them both together. Does that make sense?

Speaker #2: That occurred. We passed that on in full, so that's obviously a significant cost to the business, which is what often doesn't repeat. So, if you want to look at those two things as being unlikely to repeat, you need to add them both together.

Scott Wyatt: We passed that on in full. That is obviously a significant cost to the business, which obviously is a one-off and does not repeat. If you want to look at those two things as being unlikely to repeat, you need to add them both together. Does that make sense?

Speaker #2: So that makes sense.

Speaker #5: Yeah. Or we could add the $53 million of fuel margin and the fuel excise together, because first quarter margins were very strong in the market, right?

Michael Simotas: Yeah. Or we could add the AUD 53 million of fuel margin and the fuel excise together, because Q1 margins were very strong in the market run.

Speaker #2: Yeah, yeah, I hear that too. Yeah. And obviously July and August have been softer, although we obviously had some reverse benefit from excise going back up through the revaluation of stock that we would have been holding at that time as well.

Scott Wyatt: Yeah. I hear that, too. And obviously July/August has been softer, although we obviously had some reverse benefit from excise going back up given the revaluation of stock that we would have been holding at that time as well. We are entering into a seasonally stronger period in the back end of the year. Typically, that has been our strongest period for retail fuel margins as well. I would not give up on that yet. I would more look at the supply benefits and the excise as being elements of that bridge that are less likely to repeat going forward.

Scott Wyatt: Yeah. I hear that, too. And obviously July and August has been softer, although we obviously had some reverse benefit from excise going back up given the revaluation of stock that we would have been holding at that time as well. We are entering into a seasonally stronger period in the back end of the year. Typically, that has been our strongest period for retail fuel margins as well. I would not give up on that yet. I would more look at the supply benefits and the excise as being elements of that bridge that are less likely to repeat going forward.

Speaker #2: And we're entering into a seasonally stronger period in the back end of the year. In retail, that's typically been our strongest period for retail fuel margins as well.

Speaker #2: So I wouldn't give up on that yet. I think I would more look at the supply benefits and the excise as being elements of that bridge that are less likely to repeat going forward.

Speaker #5: Yeah. So, all told with that, I guess when we saw the quarterly update a couple of weeks ago, the market was quite pleased with convenience retail outcomes because it looked like you'd bounced off the bottom.

Michael Simotas: Okay. So all told with that, I guess when we saw the quarterly update a couple of weeks ago, the market was quite pleased with convenience retail outcomes because it looked like you have bounced off the bottom.

Speaker #5: Has the convenience retail business bottomed now, and should we expect it to grow from here, or is there still work to do?

Scott Wyatt: Probably need a bit of buying.

Michael Simotas: Has the convenience retail business bottomed now, and we should expect it to grow from here, or is there still work to do?

Speaker #2: Yeah. Look, I think it's definitely a turning point, Michael. I think a lot of what we've done over the last two years has been very heavily focused on integrating the businesses, standing up ERPs and supply chains. It was a very distracting time for the business during a period that was also, from a macro perspective, heavily impacted by cost-of-living pressures and tobacco sales decline.

Scott Wyatt: Yeah, look, I think it is definitely a turning point, Michael. I think a lot we have done the last two years has been very heavily focused on integrating the businesses, standing up ERPs and supply chains, and a very distracting time for the business during a period that was also, from a macro perspective, heavily impacted by cost of living pressures and tobacco sales declines. It has not been the easiest environment to operate a retail business, and particularly for us, given the transitions we are going through. Now we are at a point where really that is now largely all behind us. ERP is in place and stabilized, supply chain, we have still got WA to get done, but we are pretty much done on that. Tobacco, we have certainly reached the bottom, and we start to cycle out of that now in July.

Speaker #2: So, it hasn't been the easiest environment to operate a retail business, and particularly for us given the transitions we're going through. Now, we're at a point where that is now largely all behind us.

Speaker #2: So, ERP's in place and stabilized. Supply chain is still work to get done, but we're pretty much done on that. Tobacco, we've certainly reached the bottom and we sort of start to cycle – we start to cycle out of that now in July.

Speaker #2: So we should see, therefore, convenience sales in aggregate—both including tobacco—moving forward from here and starting to deliver year-on-year growth. And I think a lot of momentum has been built, or a lot of focus has been built, by June and her time in the role, and now with Theresa coming on board, I think we've genuinely got time and capacity now to focus on the things that impact customers and drive sales growth going forward.

Scott Wyatt: So should see, therefore, convenience sales in aggregate, both including tobacco, moving forward from here and starting to deliver year-on-year growth. I think a lot of momentum that has been built, or I think focus has been built by Jennifer Gray and her time in the role, and now with Teresa Rendo coming on board, I think we have genuinely got time and capacity now to focus on the things that impact customers and drive sales growth going forward. So, I genuinely believe it is a turning point where we are. I think there is still a lot to do, no doubt about it, but the lot to do is all driven by opportunities and significant value that we can see that we can add to the retail business. Teresa Rendo, you have been here for four weeks now, so maybe you can add your reflections.

Speaker #2: So yeah, I generally believe it's a turning point where we are, and I think there's still a lot to do—no doubt about it.

Speaker #2: But the lot to do is all driven by opportunities and significant value that we can see we can add to the retail business.

Speaker #2: Theresa, you've been here four weeks now, so maybe you can add your reflections.

Speaker #3: I think you've summed it up really well, Scott. What I would say, Michael, is it has been a period, from what I can see, of absolute stabilization and ownership of the end-to-end retail business. There is certainly a lot of unlock that exists in just being good retailers.

Teresa Rendo: I think you have summed that up really well, Scott. What I would say, Michael, is it has been a period from what I can see of absolute stabilization and ownership of our end-to-end retail business. There is certainly a lot of unlock that exists in just being good retailers, which is all about discipline and retail scorecards. We can see that down to the site level, and we certainly have a number of initiatives that are now

Speaker #3: Which is all about discipline, and retail scorecards. We can see that down to site level, and we certainly have a number of initiatives that are now.

Michael Simotas: Just quickly on refining as well, just following on from Gordon's question. Being pretty clear on volume and utilization. Looks like in July you have left some margin on the table as well. Can you work towards adjusting product slates to get margins to where they would have otherwise been and just have the volume impact? Or is there likely to be an ongoing margin drag as well?

Speaker #5: Awesome. Quickly on refining as well—just following on from Gordon's question. Being pretty clear on volume and utilization, it looks like in July you've left some margin on the table as well.

Speaker #5: Can you work towards sort of adjusting the product slate to get margins to where they would have otherwise been, and just have the volume impact?

Speaker #5: Or is there likely to be an ongoing margin drag as well?

Speaker #2: No, there's always—look, Michael, there's always a danger of printing one month's refining numbers anyway, as you know. And, yeah, I think the comparison with Ample's will always be different, right?

Scott Wyatt: No, there is always a danger in printing one month's refining margin numbers anyway, as you know. I think, and the comparison with Ampol will always be different. Different refineries operate different crude sets and different premium through periods. So there is a bit of a, and as you can see, our history of that moves around quite a bit. So, as I said before, I acknowledge that we have got a period where crude premiums were elevated, operating wasn't perfect. We are getting better at that, and that will definitely improve going forward. The refining margin environment remains very strong. So I think my view is that that is going to be with us for quite some time. There is a long tail to the situation in the Middle East and the region. Refining margins will benefit from that.

Speaker #2: The different refineries can operate in different crude sets and different premieres through a period. So there's a bit of a—you can see our history—that moves around quite a bit.

Speaker #2: So, as I said before, I acknowledge that we've got a period where crude premia were elevated. Operating wasn't perfect. We're getting better at that, and that will definitely improve.

Speaker #2: Going forward, the refining margin environment remains very strong. So, I think, in my view, that's going to be with us for quite some time.

Speaker #2: There's a long tail to the situation in the Middle East and the region. Refining margins will benefit from that, and in July I think, despite the challenge we've had with the alkylation unit, it's in a good place to really make good benefit from that environment and deliver another really strong result in the second half.

Scott Wyatt: And Geelong, I think despite the challenge we have had with the alkylation unit, is in a good place to really make good benefit from that environment and deliver another really strong result in the H2. I think that is still a very exciting business to be in at this point in time. We have got the ability to still generate good returns.

Speaker #2: So I think that's still a very exciting business to be in at this point in time, and I think we've got the ability to still generate good returns.

Speaker #5: Yeah. I agree. Thank you.

Michael Simotas: Yeah, I agree. Thank you.

Speaker #1: Thank you. Your next question comes from Craig Wilford from MSG Marquee. Please go ahead.

Operator: Thank you. Your next question comes from Craig Woolford from MST Marquee. Please go ahead.

Speaker #4: Good morning, Scott, Caroline, and team. I just wanted to start with a question on the convenience business. There was a comment on one of the slides about reducing the capex for the OTR conversions—could you help me understand that?

Craig Woolford: Good morning, Scott, Carolyn, and team. I just wanted to first question on the convenience business. Just try to understand, there was a comment on one of the slides about reducing the CapEx for the OTR conversions. What elements have been reduced, and is there any update on the performance of the converted OTR sites?

Speaker #4: What elements have been reduced, and is there any update on the performance of the converted OTR sites?

Speaker #3: So, I think maybe if I can talk to the reduction of capital, I think we have become much cleverer at understanding which pieces of the OTR offer resonate, and how we can achieve that in the conversion of a Coles Express.

Jennifer Gray: I think maybe if I can talk to the reduction of capital. I think we have become much cleverer at understanding which pieces of the OTR offer resonate and how we can achieve that in conversion of a Coles Express. Where the sites we originally did, we have turned every site into the most perfect OTR it could be. There are some aspects of those conversions that are costly, and probably not hugely value accretive. An excellent example of that would be, the inclusion of an internal toilet is very important. The location of that internal toilet is probably less important. Thinking about how we can be really disciplined in how we convert a Reddy into an OTR has been something we have put a lot of focus on this year.

Speaker #3: And where the sites we originally did, we've turned every site into the most perfect OTR it could be. There are some aspects of those conversions that are costly and probably not hugely value accretive. An excellent example of that would be the inclusion of an internal toilet as very important.

Speaker #3: The location of that internal toilet is probably less important. So, thinking about how we can be really disciplined in how we convert a ready into an OTR has been something we've put a lot of focus on this year.

Speaker #3: So, making sure that we can deliver the same OTR look, feel, and offer to our customers, but in a very cost-effective way. So, a lot of time and effort has gone into that.

Jennifer Gray: Making sure that we can deliver the same OTR look, feel, and offer to our customers, but in a very cost-effective way. A lot of time and effort has gone into that. I think when we think about the performance of the conversions, we have learned a lot over the 12 to 18 months that those conversions have been operating, and we understand really now where that offer resonates. I think it might be a good opportunity, Teresa has been with us before, to let her talk about how she is viewing that offer.

Speaker #3: I think, when we think about the performance of the conversions, we've learned a lot over the sort of 12 to 18 months that those conversions have been operating.

Speaker #3: And we understand really now where that offer resonates. And I think it might be a good opportunity—Theresa's been with us for a few weeks—to let her talk about how she's viewing that offer.

Speaker #6: So, Craig, if I may—and I'm just a simple retailer and shopkeeper, by the way—but when I look at the results of these conversions, they are quite mixed.

Teresa Rendo: Look, Craig, I am just a simple retailer and shopkeeper, by the way. When I look at the results of these conversions, they are quite mixed. To Jen's point, we have put in very quickly a process that is a more robust framework that matches brand to site and the communities we serve. In the very simplest of terms, though, as we look at their performance, there is a real opportunity for segmentation of our portfolio, which is that match piece. There is also a lot of work that we can do in better consideration of how we serve within the box. What is really pleasing is for even the sites that are not quite to where we expect them, the issue is not with the site, it is with the range and the service. If I am to use an example, OTR has twice as many SKUs as Reddy.

Speaker #6: And to Jen's point, we have put in place very quickly a process that is a more robust framework that matches brand to site and the communities we serve.

Speaker #6: In the very simplest of terms, though, as we look at their performance, there is a real opportunity for segmentation of our portfolio, which is that match piece.

Speaker #6: But there's also a lot of work that we can do in better consideration of how we serve within the box, and really, what's really pleasing is even for the sites that aren't quite to where we expect them, the issue's not with the site.

Speaker #6: It's with the range and the service. So if I'm to use an example, OTR has twice as many SKUs as Ready. So, in a metro location where we might have majors around us, it means that we have a lot of unproductive SKUs.

Teresa Rendo: In a metro location where we might have majors around us, it means that we have a lot of unproductive SKUs. We have done one very quick trial in a site locally to us that we can visit quite often where we have reduced over 800 SKUs in that site, and it has increased sales by double digit early days, let me say. What is really pleasing you should be quite buoyed from is the opportunity sits in the box, not in its structure. There are some real quick wins to be gathered up and to be rolled out in our learnings across what we have converted to date, but more broadly to our entire network. I am very encouraged by what I see and the opportunities that sit before us.

Speaker #6: We've done one very quick trial at a site locally to us, which we can visit quite often, where we have reduced over 800 SKUs in that site.

Speaker #6: And it has increased sales by double digits—early days, let me say. So what is really pleasing, and what you should take—you should be quite fluid from—is that the opportunity sits in the box, not in its structure.

Speaker #6: And there are some real quick wins to be gathered up and to be rolled out in our learnings across what we have converted to date.

Speaker #6: But more broadly to our entire network. So I've seen—I'm very encouraged by what I see in the opportunities that sit before us.

Speaker #4: Yeah, definitely looking forward to hearing more in November. Just one other question: if I'm looking at the slide that's got the breakdown on the refinery business and the performance, the operating costs increased quite significantly from 1H25 to 1H26.

Craig Woolford: Yeah, definitely looking forward to hearing more in November. Just one other question. If I am looking at the slide that has got the breakdown on the refinery business and the performance, the operating costs increased quite significantly from H1 2025 to H1 2026. Just trying to get a sense of how much of that is true cost increases and how much relates to the fire.

Speaker #4: I'm just trying to get a sense of how much of that is due to true cost increases and how much relates to the fire.

Speaker #2: So, this is the appearance to the back. Is it on refining?

Scott Wyatt: This is the pinch of the back is on refining?

Speaker #4: Yeah. So the operating costs, excluding energy costs, went from $145.5.

Craig Woolford: Yeah. The operating costs, excluding energy costs, went from AUD 145.5 to-

Speaker #2: And dollars per barrel?

Scott Wyatt: It costs AUD 10 per barrel.

Speaker #4: Yeah. Yeah. I mean, yeah, that's right. Obviously, production was up a bit—up about 10 to 12 percent—and cost per barrel.

Craig Woolford: Yeah, that is right. Obviously, production was up a bit and up about 10%, 12% in cost per barrel.

Speaker #2: Yeah, I mean, I think, no—I think that, look, yeah, the only—I mean, as I’ve called out, we acknowledge there's definitely some elevated costs in the first half, driven by the impact of the fire.

Scott Wyatt: Yeah, as I have called out, we acknowledged there is definitely some elevated costs in the H1 driven by the impact of the fire. Outside of that, apart from just production, which was still pretty solid through the period, our cost has been pretty in line. To the extent there is a cost increase there, it is really just the fire-related, which I said before, should normalize going forward.

Speaker #2: But outside of that, apart from just production, which was still pretty solid through the period, our cost has been pretty in line with what we have. So I think, yes, just really to say there's a cost increase there, it's really just the fire-related, which I said before would normalize going forward.

Speaker #4: Yeah. Perfect. Thanks, Scott.

Craig Woolford: Yeah, perfect. Thanks, Scott.

Speaker #1: Thank you. Your next question comes from Scott Ryle from Rimmer Equity Research. Please go ahead.

Operator: Thank you. Your next question comes from Scott Ryall, from Rimor Equity Research. Please go ahead.

Speaker #5: Hi. Thank you very much. Hey Scott, you've given a good amount of detail on the refining process already. Can you just clarify for me—and apologies if I've missed it earlier.

Scott Ryall: Hi. Thank you very much. Hey, Scott, you've given a good amount of detail on the refining process already. Can you just clarify for me, and apologies if I've missed it earlier, what's the timing that you're expecting in terms of the next wave of refining into the next decade, the agreement with government?

Speaker #5: What's the timing that you're expecting in terms of the next wave of refining into the next decade, and the agreement with government?

Speaker #2: Well, look, I mean, our expectation is there will be the Refining Retention Program materially progressed before the end of the year. And, whilst that's not that far away now, that would still be our objective.

Scott Wyatt: Well, our expectation is that it will be see the refining retention program materially progress before the end of the year. Whilst that's not that far away now, that would be still our objective and certainly the pace at which we're working at with government. It wasn't my expectation that it would be finalized or put into legislation by the end of the year. That will always carry through to next year, but I expect to have a pretty clear view about where it's heading with some certainty by then. It's important that we do because we've obviously got decisions to make around the replacement of the alkylation unit. That's going to be a multi-year program to replace.

Speaker #2: And certainly, the pace at which we're working with government, it wasn't my expectation that it would be finalized or put into legislation by the end of the year.

Speaker #2: That will always carry through to the next year. But I expect to have a pretty clear view about where it's heading with some certainty by then. It's important that we do, because we've obviously got decisions to make around the replacement of the alkylation unit.

Speaker #2: That's going to be a multi-year program to replace. We can't really move forward with that decision without the knowledge about where the next where what happens beyond the end of the decade because we're obviously if we kick off the replacement of the alkalation unit next year, it will be getting pretty close to the end of this decade before it's finished.

Scott Wyatt: We can't really move forward with that decision without the knowledge about what happens beyond the end of the decade, because obviously, if we kick off the replacement of the alkylation unit next year, we'll be getting pretty close to the end of this decade before it's finished. Obviously you want to have a runway to get a return on that decision. So it kind of all comes together for us over the next 6 months. It's an important period to land.

Speaker #2: And obviously, you want to have a runway to get a return on that decision, so it all kind of comes together for us over the next six months.

Speaker #2: It's an important period to land. I think, unfortunately, it's a very important decision for the government as well. I think that we're aligned on the need and the benefit of retaining refining capacity, both for the country and for our business.

Scott Ryall: Okay.

Scott Wyatt: Fortunately, I think it's a very important decision for government as well. I think that we're aligned on the need and the benefit of retaining refining capacity both for the country and for our business. It's really the basis on what's the economic basis on which that outcome can be achieved.

Speaker #2: It's really the basis on what's the economic basis in which those outcomes can be achieved.

Speaker #5: Okay, great. And then my second one is just for Denise, if that's all right. I just wonder, in the last six months, with all the different impacts and challenges that you've no doubt faced in running your business, has there been any volumes or products that you have not been able to 100% fulfill for customers?

Scott Ryall: Okay, great. My second one is just for Denis, if that is all right. I just wonder in the last 6 months, with all the different impacts and challenges that you have no doubt faced in running your business, has there been any volumes or products that you have not been able to 100% fulfill for customers? Connected to that, do you see any opportunities to step into perhaps some adjacent supply chains that you might not have played in, but for the disruption that we have seen in global supply chains in some of those petrochemical products? Can you just talk to how you are seeing the environment for opportunity going forward as well?

Scott Ryall: Okay, great. My second one is just for Danny, if that is all right. I just wonder in the last 6 months, with all the different impacts and challenges that you have no doubt faced in running your business, has there been any volumes or products that you have not been able to 100% fulfill for customers? Connected to that, do you see any opportunities to step into perhaps some adjacent supply chains that you might not have played in, but for the disruption that we have seen in global supply chains in some of those petrochemical products? Can you just talk to how you are seeing the environment for opportunity going forward as well?

Speaker #5: And connected to that, do you see any opportunities to step into perhaps some adjacent supply chains that you might not have played in, but for the disruption that was seen in global supply chains in some of those petrochemical products?

Speaker #5: Can you just talk to, kind of, how you're seeing the environment for opportunity going forward as well?

Speaker #2: Yes, maybe this addresses the first part of your question. We take a lot of pride in how we have demonstrated the robustness of our supply chain, and no customers had to suffer from any shortage of products.

Denis Urtizberea: Okay, maybe to the first part of your question. We take a lot of pride on how we have demonstrated the robustness of our supply chain, and no customers had to suffer from any shortage of products during the crisis. There was certainly a lot of tension, because the crisis happened at the beginning of the seeding season, so that it has been quite difficult in Australia. At the end, we have demonstrated again the robustness of our supply chain. Whether there would be opportunity, and that comes back to the question earlier about the quality of the relation and the value of our relation with Vitol. A number of mitigation plans have been put in place at any point in time to make sure our customers received the product they needed. We had a weekly or biweekly communication with our top customers.

Danny Urtizberea: Okay, maybe to the first part of your question. We take a lot of pride on how we have demonstrated the robustness of our supply chain, and no customers had to suffer from any shortage of products during the crisis. There was certainly a lot of tension, because the crisis happened at the beginning of the seeding season, so that it has been quite difficult in Australia. At the end, we have demonstrated again the robustness of our supply chain. Whether there would be opportunity, and that comes back to the question earlier about the quality of the relation and the value of our relation with Vitol. A number of mitigation plans have been put in place at any point in time to make sure our customers received the product they needed. We had a weekly or biweekly communication with our top customers.

Speaker #2: During the crisis, there was certainly a lot of tension because the crisis happened at the beginning of the seeding season. So, it has been quite local in Australia.

Speaker #2: But at the end, we have demonstrated again the robustness of our supply chain. Whether there would be opportunity, and that comes back to the question earlier about the quality of the relationship and the value of our relationship with Vitor.

Speaker #2: A number of mitigation plans have been put in place at any point in time to make sure our customers receive the product they needed.

Speaker #2: We had a weekly or biweekly communication with our top customers. Actually, I want to take this opportunity to thank our customers for their outstanding collaboration during that crisis.

Denis Urtizberea: I actually want to take that opportunity to thank all our customers for their outstanding collaboration during that crisis. Do we need further sourcing of supply for the future, or are there any other opportunities related to the crisis? I do not think so. Nevertheless, we are still looking at any opportunity for connecting segments of, you mentioned petrochemical. We continue to develop our strategies for our specialties, and if any opportunity comes to us, we will certainly consider that. Whether there would be a massive change because of this crisis, I do not think so. We have said for a number of years, we are a bit of business, and we are bit of business through diversification, and we will continue to operate that way.

Danny Urtizberea: I actually want to take that opportunity to thank all our customers for their outstanding collaboration during that crisis. Do we need further sourcing of supply for the future, or are there any other opportunities related to the crisis? I do not think so. Nevertheless, we are still looking at any opportunity for connecting segments of, you mentioned petrochemical. We continue to develop our strategies for our specialties, and if any opportunity comes to us, we will certainly consider that. Whether there would be a massive change because of this crisis, I do not think so. We have said for a number of years, we are a bit of business, and we are bit of business through diversification, and we will continue to operate that way.

Speaker #2: Do we need further sources, or are there any other opportunities related to the crisis? I don't think so. Nevertheless, are we still looking at any opportunity for connected segments, as you mentioned with petrochemicals?

Speaker #2: We'll continue to develop our strategies for our specialties. And any opportunity that comes to us, we'll certainly consider that, whether there is a massive change because of this crisis.

Speaker #2: I don't think so. We have said for a number of years, we have built our business, and we have built it to be resilient through diversification.

Speaker #2: And we'll continue to operate that way.

Speaker #5: Okay, great. Thank you. That's all I had.

Scott Ryall: Okay, great. Thank you. That is all I had.

Speaker #1: Thank you. There are no further questions at this time. I'll now hand back to Scott Wyatt for any closing remarks.

Operator: Thank you. There are no further questions at this time. I will now hand back to Scott Wyatt for any closing remarks.

Speaker #2: Yeah, look, thanks again for joining us this morning to discuss our first-time results. As I mentioned earlier, I am very proud of the way we responded to the Middle East crisis to maintain supply through what's been a very uncertain period.

Scott Wyatt: Well, thanks again for joining us this morning to discuss our H1 results. As I mentioned earlier, I am very proud of the way we have responded to the Middle East crisis to maintain supply through what has been a very uncertain period, at the same time, deliver an exceptional set of results. We go into the H2 a stronger balance sheet and some good momentum in all parts of our business. I expect Commercial and Refining to continue to perform well, and for our Retail business to return to growth as we embed the foundational work that we have now completed, and Teresa Rendo brings a sharp retail focus to the business. We will have a lot more to share with you in November at our investor day, and look forward to seeing you all there. Thanks again.

Speaker #2: And at the same time, deliver an exceptional set of results. We do enter the second half with a stronger balance sheet and some good momentum in all parts of our business.

Speaker #2: I expect Commercial, Wind Refining to continue to perform well and for our Retail business to return to growth as we embed the foundational work that we've now completed, and Theresa brings a sharp retail focus to the business.

Speaker #2: We'll have a lot more to share with you in November at our Investor Day, and we look forward to seeing you all there. Thanks again.

Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.

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Half Year 2026 Viva Energy Group Ltd Earnings Call

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