Alon CEO Glad to See Susser Deal 'Accurately Valued'

DALLAS – Alon USA Energy Inc. CEO Paul Eisman said he was glad to see the “industry accurately value the [retail] assets” regarding Sunoco Inc. parent Energy Transfer Partners LP’s purchase of Susser Holdings Corp. for $1.8 billion announced earlier this week.

However, Eisman said he could not comment when questioned by a Wall Street analyst during the company’s 2014 first-quarter earnings conference call today about whether a similar sale will be put into motion for Alon, the Dallas-based operator of 296 convenience stores and the largest 7-Eleven licensee in the United States.

Eisman did talk about operations results at Alon USA’s retail division, though.

Despite a difficult winter quarter due to weather, Alon USA is looking forward to a much better spring season at its retail division. In fact, the chief executive said he is so confident about Alon’s retail environment improving that the company plans to build several new stores and remodel many others.

“We had severe winter weather that affected our retail division, but we are already doing better in the spring and see more improvement on the way,” Eisman said during the call.

The company's retail earnings were largely flat or down on a year-over-year basis. For its 2014 first quarter ended March 31, operating income at Alon USA’s retail segment dropped to $2.93 million vs. $4.54 million in the same period of 2013. Net sales at company-operated stores decreased by approximately $3 million to $221 million.

Merchandise sales were essentially flat at $73.33 million in Alon’s most recent quarter, while merchandise margins decreased 0.8 percent to 31.5 percent.

The one positive came in the retail fuel sales category. Alon sold 45.5 million gallons during its first quarter, a healthy 1.1-million gallon improvement year over year. Still, this strong number was offset by retail fuel margins, which declined 2 cents to 18.3 cents per gallon.

Companywide, Alon eked out a small profit of $800,000 for its latest quarter, vs. net income of $54.2 million during 2013’s first quarter.

"The financial results compared to the prior year are lower due to less favorable crude oil differentials and the resulting margins, but this was partially offset by excellent operational performance at Big Spring [refinery], where we had a total throughput of over 73,000 barrels per day,” noted Eisman.