Delek US Reports 1Q Profit Gain
BRENTWOOD, Tenn.-- Delek US Holdings Inc., a diversified energy company that also operates the MAPCO Express convenience store chain, announced its first quarter net income from continuing operations improved to $16.9 million, up from a net loss of $14.1 million a year ago. The results included expenses related to the acquisition of a majority interest in Lion Oil Co.
The contribution margin for Delek's retail segment, which includes approximately 400 company-operated stores under the MAPCO Express, MAPCO Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart brand names, declined to $6.5 million in the first quarter, compared with $7.4 million in the year ago period. Same-store merchandise sales increased on a year-over-year basis for a seventh consecutive quarter, as foodservice and private label sales initiatives continued to gain momentum. However, elevated crude oil prices applied downward pressure on retail fuel margins during the first quarter and led to higher retail fuel prices in the period. Higher retail fuel prices contributed to a modest decline in same-store fuel sales (gallons) during the first quarter 2011.
Same-store merchandise sales increased 4.0 percent in the first quarter 2011, compared to a same-store sales increase of 1.2 percent in the first quarter 2010. Same-store foodservice sales increased 13.7 percent during the first quarter 2011, compared to a same-store increase of 9.2 percent in the prior year period, as fresh and prepared food concepts gained traction throughout the retail network. Merchandise margin was unchanged at 30.8 percent in the first quarter 2011, when compared to the prior-year period.
Same-store sales of fuel (gallons) declined 2.3 percent in the first quarter 2011, versus a decline of 0.3 percent in the first quarter 2010. Delek's retail fuel margin was 12.5 cents per gallon in the first quarter 2011, compared to 12.9 cents per gallon in the first quarter 2010. At the conclusion of the first quarter 2011, the retail segment operated 404 locations, versus 434 locations in the prior-year period.
Uzi Yemin, president and CEO of Delek US, remarked: "Our strong first quarter results were driven by a significant improvement in Gulf Coast refining economics, when compared to the prior-year period. Our refining segment generated more than $54 million in contribution margin during the first quarter 2011, as elevated refined product margins, an ongoing recovery in regional demand and reliable operations at our Tyler refinery contributed to profitability in the period."