For its third quarter of fiscal 2014, Alimentation Couche-Tard Inc. announced net earnings of $182.3 million, up $40.1 million or 28.2%, equivalent to $0.96 per share on a diluted basis, an increase of $0.21 per share or 28.0% over diluted net earnings per share of the third quarter of fiscal 2013.
Some items affected the results of the third quarter of fiscal 2014, mainly a foreign exchange gain of $10.4 million, a $6.8 million impairment charge over a non-operational lubricant plant in Poland, a negative goodwill of $6.6 million as well as a curtailment gain on pension plans obligation. On the other hand, the results from the third quarter of fiscal 2013 included a foreign exchange loss of $13.6 million.
Excluding these items as well as the negative goodwill for the third quarter of fiscal 2013 and acquisition costs from both comparable quarter results, the diluted net earnings per share would have been $0.92 for the third quarter of fiscal 2014 compared with $0.81 for the third quarter of fiscal 2013, an increase of 13.6%. This increase is mainly attributable to the growing contribution of merchandise and service revenues, to higher road transportation fuel volumes, to higher road transportation fuel gross margins in Europe as well as to the contribution from acquisitions. These items, which contributed to the growth in net earnings, were partially offset by the negative net impact related to the translation of earnings from Couche-Tard’s Canadian and European operations into the US dollar as well as by the fact that the third quarter of fiscal 2014 includes results of Statoil Fuel & Retail for a period of 110 days compared with 123 days for the comparable period. All financial information is in US dollars unless stated otherwise.
Same-store merchandise revenues up 3.8% in the U.S., 0.9% in Europe and 2.2% in Canada.
Merchandise and service gross margin stood at 32.7% in the U.S., at 43.2% in Europe and at 32.7% in Canada.
Same-store road transportation fuel volume up 1.3% in the U.S., 2.7% in Europe and 2.1% in Canada.
Road transportation fuel gross margin stood at US17.02¢ per gallon in the United States, at US11.44¢ per litre in Europe and at CA5.87¢ per litre in Canada.
A three-for-one split of all of the Corporation’s issued and outstanding Class “A” and “B” shares has been approved by regulatory authorities and will become effective on April 14, 2014.
“The third quarter earnings benefited from strong organic growth from merchandise and services as well as from road transportation fuel across all of our markets despite unfavorable weather in several of our markets, fewer number of days from our European operations included in our net earnings and the negative impact from foreign currency translation into the U.S. dollar,” said Alain Bouchard, president and CEO. “With this organic growth, along with higher road transportation fuel margins in Europe as well as our ongoing cost control we increased our adjusted net earnings by almost 14% without a significant increase in our store count. Our European operations continue to perform well with the implementation in our stores of new and sustainable merchandising strategies and with the help of the strong growth in food service sales. We also benefited from the contribution from recent acquisitions”
Raymond Paré, vice-president and chief financial officer, added: “With the cash flows associated with the strong third quarter results we keep improving our financial position and our indebtedness ratio. We believe we have the financial flexibility to materialize potential opportunities while staying focused on our commitment towards maintaining a strong balance sheet and a reasonable level of debt. In addition, the implementation of our new IT platform in Europe is about to be completed. Considering the magnitude and complexity of this task, we are proud of the work accomplished by our European team.”