Freezing temperatures boost DCC profits

Dublin-based distributor DCC announced a very strong third quarter driven by the exceptionally cold weather across Northern Europe that boosted volumes for its Energy division."With the exceptionally cold weather conditions throughout northern Europe, particularly in the last six weeks of the quarter, customer demand in DCC Energy, DCC's largest division, increased significantly," the statement said.The group achieved "very strong revenue and operating profit growth" for quarter ended 31 December as heating fuel volumes increased by 22%, meaning that it now expects a 15% increase in operating profit for the year ending 31 March. Earnings per share are estimated to grow by 10%.On 24 January, DCC refuted "very serious allegations" by The Sunday Times that its oil distribution subsidiary GB Oils has been "ripping off" its customers, "fleecing OAPs" and "inflating customer bills"."The oil distribution industry in Britain remains very fragmented with in excess of 175 distributors and is highly competitive, a fact evidenced by the low margins in the industry," DCC said."GB Oils' prices are competitive and remained competitive during this period.... The recent very severe weather conditions led to unprecedented demand and shortages of product. These factors, together with the challenges of poor road conditions during the snow, led to increased delivery lead times, fewer orders delivered per truck per day and higher costs."GB Oils has a market share of 14%, supplying to 450,000 domestic, commercial, industrial and agricultural customers. DCC