EXTRA: DCC Set To Run 1,000 Petrol Stations In Europe After Esso Deal

LONDON (Alliance News) - Irish distribution company DCC PLC on Tuesday said it secured another deal to expand its network of petrol stations in Europe, while saying it remains on track to meet its expectations for the financial year to the end of March.

Investors welcomed the latest deal and in-line trading update, with DCC shares up 6.7% to 6,800.00 pence on Tuesday, the best performer in the FTSE 100.

DCC has been expanding its Energy division in recent years as big oil and gas companies shed their downstream operations in a bid to shore up their finances in a low oil price environment.

In 2015, DCC bought French liquefied petroleum gas company Butagaz SAS from Royal Dutch Shell PLC, which transformed DCC's Energy division. It followed that in November last year with a deal to buy 97% of Gaz Europeen Holdings SAS, a French natural gas retailer and energy management company.

Those deals substantially increased the size of DCC's network of petrol stations in Europe, to which it delivers fuel, and on Tuesday said it had scaled up the division even further.

DCC said it will pay GBP235.0 million to acquire the Esso retail petrol station network in Norway from Esso Norge AS. The network is the third-largest in Norway with 142 company-operated sites, plus contracts to supply 108 Esso-branded stations in the country.

DCC said the majority of the stations in the network are in the more-populous south of Norway. The business will be integrated into DCC's Energy unit and, as part of the deal, DCC will enter a long-term brand and supply agreement with Esso Norge.

On completion, DCC Energy will operate around 1,000 retail petrol stations in Europe and supply around 2,000 dealer-run stations, in line with its push to build a substantial network of petrol stations across Europe.

"The acquisition of Esso Retail Norway is another material step for DCC in building its retail petrol station business in Europe," said Tommy Breen, DCC's chief executive.

"From a modest position three years ago, DCC Energy will, following completion, operate over 1,000 retail petrol stations and is ambitious to continue this development. The acquisition is consistent with our aim to operate world-renowned retail fuel brands and be an excellent partner for oil majors," he added.

Separately on Tuesday, DCC said group operating profit for the third quarter to the end of December was "strongly ahead" year-on-year and in line with its expectations.

At DCC Energy, operating profit grew strongly in the third quarter, helped by "very strong" organic volume growth in liquefied petroleum gas, plus good volumes for its Retail & Fuelcard and Oil units. Heating-related volumes met expectations, DCC said, with the milder weather conditions in the UK offset by colder conditions elsewhere.

The DCC Healthcare unit traded in line with expectations, with a good performance from its Health & Beauty division only partially offset by an impact from the weakness in the pound for the DCC Vital business.

DCC Technology was ahead year-on-year in the quarter, with strong performances in the UK and Ireland, while DCC Environmental also performed very well.

DCC said it continues to anticipates operating profit and adjusted earnings per share will be strongly ahead year-on-year for the financial year to March 31 and will meet market expectations.

DCC will publish annual results on May 16.

By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance

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