Rubis (RUI) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 group sales rose 2% year-over-year to €1,630m, driven by strong volume growth in Africa and Europe, with a 7% increase in distribution volumes year-over-year and 5% growth year-to-date.

• Gross margin faced significant pressure due to volatile oil prices and delayed pricing adjustments in Kenya, especially in regulated African markets.

• Support & Services gross margin fell 25% year-over-year due to lower bitumen trading activity.

• Photosol's secured renewable portfolio reached 1 GW, with operational assets up 22% and a project pipeline expanding to 5.2 GW.

• The sale of Rubis Terminal was completed, generating an €83m net capital gain and enabling a €0.75 exceptional dividend.

Financial highlights

• Q3 2024 Energy Distribution revenue: €1,613m (+2% year-over-year); Support & Services: €258m (+2%).

• Gross margin for energy distribution was down 1% year-over-year, with unit margins down 7%.

• LPG volumes up 2%, fuel up 8%, bitumen up 18% year-over-year; bitumen gross margin fell 10%.

• EBITDA guidance for 2024 was revised to €675–725 million due to margin pressure and delays in Kenya's pricing formula adjustment.

• Net income Group share guidance remains at €340–375 million, including €83m capital gain from Rubis Terminal disposal.

Outlook and guidance

• Margin pressure from oil price volatility is expected to be short-term; profitability should improve if product prices rise.

• Dividend per share is expected to grow versus 2023, with a €0.75 interim dividend following the Rubis Terminal sale.

• The company remains confident in a future adjustment to Kenya's pricing formula, potentially by year-end or next year.

• Caribbean region performance expected to remain strong; bitumen trading opportunities reduced.

• Guidance revision reflects oil price volatility, delayed pricing in Kenya, and lower bitumen trading.