DALLAS — Alon USA Energy Inc. has known Delek US Holdings Inc. “for an extended period of time” and is “very impressed with Delek,” Alon USA President and CEO Paul Eisman stated Friday during the company's 2015 fiscal first-quarter earnings call.
“We are excited about the opportunities [Delek US brings us],” said Eisman. “It’s striking how similar we are.”
As CSNews Online reported on April 15, Delek US will acquire roughly 48 percent of Alon USA shares from its parent company, Alon Israel Oil Co. Ltd. The transaction has already received U.S. antitrust clearance and could close as early as May 12.
During its own first-quarter earnings call on May 6, Delek US CEO Uzi Yemin said his company will “think seriously” about acquiring the remaining portion of Alon USA in the near future.
When questioned by an analyst Friday about the possibility of a Delek US outright purchase of his company, Eisman said the 48-percent sale had yet to officially close and therefore it was “premature” to discuss such a transaction.
Best First Quarter Ever
Dallas-based Alon USA’s retail division achieved record operating income of just shy of $7 million for its 2015 fiscal first quarter ended March 31, more than double what it earned in the year-ago period.
Leading the way was retail fuel margins, which rose more than 5 cents per gallon to 23.6 cents per gallon. The company sold 46 million gallons of fuel in the quarter, an increase of about 500,000 gallons. On a per-site basis, Alon USA’s retail division sold 54,000 gallons of fuel per month, a 1,000-gallon increase year over year.
Merchandise sales were also strong, rising nearly $3 million to $76 million in Alon USA’s most recent quarter. Merchandise sales per site per month increased by $4,000 to $87,000, while merchandise margins rose 1.7 percentage points year over year to 33.2 percent. On a same-store basis, merchandise sales rose 4 percent year over year.
"Our retail business had its best first quarter ever, supported by attractive fuel and merchandise margins,” said Eisman. “With lower fuel prices at the pump, our retail customers are increasingly purchasing higher-margin products, driving an improvement in our merchandise margins.”
Alon USA is the country’s largest 7-Eleven licensee and operated 294 convenience stores in Texas and New Mexico as of May 8. Looking ahead, the company's top executive relayed that Friday’s opening of its 294th store in Rio Rancho, N.M., is significant as it represents a “prototype for the future.” The store features 4,500 square feet of space and 16 fueling stations.
Companywide, Alon USA earned $26.9 million in net income for Q1 2015, a huge rise from the $800,000 earned in its comparable 2014 quarter. In addition to retail, refinery operations were strong in Alon USA’s most recent quarter, Eisman concluded.