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Alon, Delek US Earn Record Profits

DALLAS and BRENTWOOD, Tenn. -- Both Alon USA Energy Inc. and Delek US Holdings Inc. reported stronger 2012 fiscal fourth-quarter earnings this morning, and the similarities between the two separate earnings calls definitely didn’t end there.

Both Alon and Delek's retail divisions reported higher net profits during the fourth quarter as well. Dallas-based Alon earned $77 million in merchandise sales in its latest quarter vs. $72 million during the same quarter in 2011. The operator of ALON convenience stores/gas stations and the largest 7-Eleven licensee in the United States also achieved a 32.7-percent merchandise margin in its latest quarter, compared to a 32-percent margin in the same quarter the prior year.

"We had strong results with impressive top-line growth in our retail division," Alon USA President and CEO Paul Eisman said during the company's earnings call today. "Merchandise sales rose 6 percent."

Results were also strong for Alon's retail bottom line. Net operating income rose significantly to $5.37 million, a tenfold increase compared to just a $530,000 profit during the retail segment's 2011 fourth quarter.

Alon operated 298 locations as of Dec. 31, a slight decline from 302 at the end of 2011.

Meanwhile at Brentwood, Tenn.-based Delek, which operates c-stores under various banners including MAPCO Express, MAPCO Mart, East Coast and Delta Express, merchandise margin improved to 29.6 percent in its 2012 fourth quarter vs. 29.2 percent in the same time period in 2011. Total merchandise sales declined slightly to $90.3 million from $90.5 million the prior year. However, the difference was accounted for by the fact that as of Dec. 31, Delek operated 373 c-stores vs. 377 at the end of 2011.

As for Delek's bottom line, the company's retail division earned $8.7 million during its latest quarter, compared to $8.5 million a year prior.

Delek’s management did not discuss its retail division -- beyond earnings figures -- during in its earnings call, except to note that it opened six new stores in 2012, and plans to open the same number in 2013.

More similarities between the companies' earnings reports are evident in overall company profits. Both achieved record profits in their latest quarter and full year 2012. Alon earned $22.1 million in its Q4 2012, compared to a loss of $12.9 million in the same quarter last year. For all of 2012, Alon reported a $79.1 million profit vs. $42.5 in net earnings in 2011.

"2012 was a remarkable and important year for us," noted Eisman. "We are convinced our best days are ahead of us."

Delek's 2012 Q4 overall earnings rose to $64.3 million, a huge rise when considering the company lost $6 million in 2011's Q4. As for the entire 2012, Delek recorded net income of $272.8 million vs. $158.3 million in 2011.

"An improved balance sheet allows us to keep investing in our business." Delek Chairman, President and CEO Uzi Yemin stated during the earnings call. "We are optimistic about the future."

Yemin added that Delek management will continually try to increase shareholder dividends, as well as declare additional special dividends when possible.

A final similarity between the two companies is that both spun off oil and logistics assets into master limited partnerships late in 2012. In their respective earnings calls, both Eisman and Yemin said they were pleased with how their new companies, Alon USA Partners LP and Delek Logistics LP respectively, are performing thus far.

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