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Couche-Tard posts stronger Q1 net, to sell European aviation fuel business

Published: 10:00 03 Sep 2014 EDT

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Alimentation Couche-Tard (TSE:ATD.B), a Canadian convenience store and gasoline station operator, reported a 5.7 percent rise in its fiscal first-quarter profit, and agreed to sell the aviation fuel business it inherited in its acquisition of Norwegian oil giant Statoil ASA’s retail operations. Shares jumped in morning trades.

Net income rose to $269.5 million, or $0.47 per share, in the three-month period ended July 20, from $255 million, or $0.45 per share, a year earlier, the Laval, Quebec-based company said in a statement today. That beat analysts' expectation of $0.44 per share.

However, revenues of $9.2 billion were more than $100 million shy of what analysts had called for.

“Although higher fuel margins have certainly contributed to our excellent results, driven by both improved supply contract terms and favorable market conditions during the quarter, what stands out above all is the continued strong performance of our teams which enabled us to post strong organic growth on all fronts,” chief executive officer Alain Bouchard said in the statement.

The company also boosted its quarterly dividend by 12.5 percent to $0.045.

Road transportation fuel gross margins at company operated stores in the United States rose about 19 percent to 23 cents per gallon, compared with 19.4 cents per gallon a year earlier.

Shares rose 3.7 percent to C$34.48 at 9:40 a.m. in Toronto, expanding this year's gains to 29 percent.

Earlier today, Couche-Tard said  it has agreed to sell its aviation fuel business to Air BP, one of the world's top suppliers of aviation fuel products and services. The terms of the deal were not disclosed by Couche-Tard.

The deal is expected to be completed by the end of 2014. Air BP is a subsidiary of energy industry giant BP Plc (NYSE:BP).

Couche-Tard acquired the SFR Aviation fuel business via its $2.8 billion takeover of Statoil Fuel and Retail in 2012, which gave it a major foothold in Europe.

Couche-Tard said SFR Aviation supplies fuel products to bulk customers, airliners, general aviation and military aircraft in nine countries across Northern Europe. 

Currently, the Couche-Tard network includes 6,243 convenience stores throughout North America, of which 4,478 are units with fuel outlets.

In Europe, the retail network is made up of 2,250 stores, a majority of which have fuel and convenience products; the remaining stores are unmanned automated fueling stations.

Couche-Tard operates key fuel terminals and fuel depots in eight countries. Including employees at Statoil branded franchise stations, about 17,500 people work in its retail network, terminals and service offices across Europe.

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