Vivo Energy profits fall on higher oil prices and supply problems
Shell's African fuel retailer Vivo Energy reported a fall in profits due to supply problems and market conditions in Morocco but said it was looking to expand across the continent.
The company's third quarter gross cash profit was down 2 per cent to $167m (£130m) compared with 2017.
A surge in oil prices hit margins in the firm's largest market Morocco but the company also blamed supply disruptions in Kenya, Uganda and Cote d'Ivoire for volume growth constraints.
Chief executive Christian Chammas also said Vivo was “keeping an eye” on expansion opportunities in Africa's two largest economies Nigeria and South Africa.
The company, which distributes and markets Shell-branded fuels and lubricants across 15 African countries, still managed its highest ever retail volumes of 1,358m litres.
Chammas said its purchase of a network of more than 225 retail stations from South Africa's Engen, due to be completed early next year, meant positive growth ahead.
He said: “We have delivered another quarter of growth and with the restructuring of the Engen acquisition are poised to start the exciting next chapter of growth for our business as our presence will expand to 23 African countries, providing access to a potential target market of over 425 million consumers.
“We continue to see strong underlying demand growth in our markets and with our differentiated business model and ongoing expansion of our retail network we are well placed to capitalise on this over the long term.”