Milder winters fuel losses at DCC

DCC Energy is hoping to further expand its core energy business into the non-heating sector — specifically via marine and aviation fuel provision — to guard against the effects of milder winter weather.

The support services group, yesterday reported a near 30% fall in full-year pre-tax profit to €133m, for the 12 months to the end of March.

Group revenue was up by 23.2% to €10.7bn; while operating profit amounted to €185m; representing a 19.4% year-on-year decline (18.3% on a constant currency basis).

The operating profit figure came within the €175m-€190m range management had predicted, but that had been their second downgrade. Profits were chiefly hit by mild weather impacting on DCC Energy’s trading levels.

That division makes up 45% of total group profits. On the plus side; the rest of DCC’s operating divisions delivered an 11% combined profit rise last year; and the group is anticipating strong operating profit recovery in its current financial year.

Both operating profit and earnings per share are expected to be up by 15% on a constant currency basis and 20% on a reported basis this year.

Last year was the first in which DCC saw a profit decline since it became a publicly listed company.

Group chief executive Tommy Breen said: “The outlook for the year to the end of Mar 2013, is set against a continued uncertain economic environment and the important assumption that there will be a return to more normal winter temperatures compared to the extremely mild winter last year, which should give rise to a strong recovery in DCC Energy’s operating profit.”

The latest annual results also show a net debt position of €128.2m. This was down from the previous year’s €45.2m tally, but was ahead of some analyst expectations of €190m.

A dividend per share of 77.89c has also been declared; 5% higher than the previous year’s figure. DCC’s adjusted earnings per share amounted to 163.51c for the year, down by nearly 20% on a reported basis.

Mr Breen said the outlook across each of DCC’s divisions is good for the current year, except its food and beverage arm, where operating profit is likely to fall on the back of the full-year impact of a logistics contract loss.

However, he added that the group — as a whole — is likely to buy more bolt-on companies.

“Our balance sheet remains in good shape and it remains a part of our strategy to grow both organically and through acquisition.”


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