Viva Energy Group <VEA.AX> said on Monday it hoped to start preliminary design work on Australia's first gas import terminal before the end of this year as it worked to diversify away from a refining market that it expected to remain difficult.
The owner of Australia's second-largest refinery had said in June it wanted to diversify earnings at its Geelong refinery site in Victoria, beginning with a liquefied natural gas (LNG) import terminal.
Chief Executive Scott Wyatt acknowledged in a statement that the refining business had been very challenging throughout 2020 so far and warned that margins would remain "uncertain and challenging" over the remainder of the year and 2021.
Wyatt added that operating losses in the refining business were "unsustainable" and that Viva was continually assessing the short- and long-term viability of this part of the business.
His comments came as Viva reported a near 33% slump in first-half underlying net profit after tax on a replacement cost basis to A$34.3 million ($24.6 million), as fuel demand was battered due to the coronavirus crisis.
The company also confirmed its intention to return all remaining proceeds from the divestment of its interest in Waypoint REIT to shareholders, including a capital return and special dividend worth A$530 million.
(Reporting by Shashwat Awasthi in Bengaluru and Sonali Paul in Melbourne; Editing by Rashmi Aich)
