Alimentation Couche-Tard net earnings soar to US$117.8M in fourth quarter

THE CANADIAN PRESS

LAVAL, Que. — Alimentation Couche-Tard Inc. (TSX:ATD.B) has reported a big increase in both fourth-quarter and full-year earnings, citing acquisitions and higher sales and margins as well as a one-week longer reporting period.

The Quebec-based convenience store and fuel station chain operator said net profit in the 13 weeks ended April 29 totalled US$117.8 million, up $53.3 million or 82.6 per cent from US$64.5 million for the 12 weeks ended April 24, 2011.

Earnings per diluted share for the quarter were 65 cents, up 85.7 per cent from 35 cents per share in the 2011 quarter.

Couche-tard said the increase was mainly attributable to the growing contribution of merchandise and service sales, the contribution from acquisitions, higher motor fuel margins and expense management.

It also enjoyed a pre-tax gain of US$17 million on derivative financial instruments related to the acquisition of Statoil Fuel & Retail as well as a $5.6 million pre-tax negative goodwill recorded in the fourth quarter of fiscal 2012 earnings.

These items were partially offset by the rise in expenses related to electronic payment modes stemming from the higher average retail price of motor fuel, the increase of the depreciation expense, as well as by non-recurring acquisition costs under new IFRS guidelines.

Revenue for the quarter totalled US$6.06 billion, up 28 per cent from US$4.73 billion in the year-earlier period.

For the 53-weeks end April 29, net earnings were US$457.6 million or 2.49 per diluted share on revenue of just under US$23 billion, compared with US$369.2 million or $1.96 per diluted share on revenue of US$18.55 billion in the 52-week period a year earlier.

“In light of the fourth-quarter results, I believe we concluded fiscal year 2012 on a very strong note,” said president and CEO Alain Bouchard.

“We see positive trends in the quarter that make us very optimistic about fiscal 2013. These are in addition to the strong contribution we expect from our recent acquisition of Statoil Fuel & Retail.”

Chief financial officer Raymond Pare said that excluding positive and negative non-recurring items, net earnings for the fourth quarter increased by $37.9 million or 58.8 per cent, corresponding to an increase of 22 cents per share.

“Of course, the thirteenth week of the fourth quarter of fiscal 2012 slightly contributed to the increase in net earnings but the fact remains that the growth is significant and steady,” Pare said.

Many items contributed to the value creation during the year, including organic growth, acquisitions and, cost control, our share repurchase program as well as our tight management of the balance sheet.

“In terms of the contribution from acquisitions, it should be noted that most of the stores acquired were only integrated into our network over the third and fourth quarters. The contribution from acquisitions made during fiscal 2012 should therefore be felt more sharply in fiscal 2013,” Pare added.

Meanwhile Pare noted that while Couche-Tard’s $2.9-billion acquisition of Norway-based Statoil Fuel & Retail is expected to contribute to earnings and value it has also increased the company’s debt level.

“During fiscal 2013 and subsequent years, we will favour a rapid reduction of our indebtedness level to allow us the flexibility to seize opportunities that lie ahead,” he said.

“Likewise, we remain determined to maintain the quality of our credit profile by keeping focused on controlled organic growth as well as growth through acquisitions.”

12:43ET 10-07-12