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DALLAS -- With 40 new convenience stores and three refineries, Alon USA just concluded a successful third quarter. The company reported its third quarter results yesterday, with net income at $46.5 million, up from the $19.4 million for the same period last year. A number of acquisitions were completed in the quarter, such as the acquisition of Paramount Petroleum Corp., 40 Good Time Stores and Edgington Oil Co.
For the nine months ended Sept. 30, Alon recorded a net income of $112.5 million, compared to the $51.3 million for the same period in 2005, excluding special items, which included a $36.9 million after-tax gain for the sale of its Amdel and White Oil crude pipelines to an affiliate of Sunoco Logistics Partners LP, among others.
Net sales for the company's convenience stores totaled $104.8 million, up from the $89.4 million recorded in the third quarter of 2005. Fuel sales topped 21.2 million gallons for the company, with an average of 34,000 gallons sold per site per month. Its merchandise margin of 32.2 percent for the quarter yielded the company $44.6 million in merchandise sales for the quarter.
The jump in earnings for the company was due to higher refinery production and continued favorable differences between WTI and WTS crude oil. The company's Big Spring refinery increased capacity to an average of 68,023 barrels per day for the third quarter, compared to the 66,747 barrels averaged for the same period in 2005. Additional refining capacity averaged 44,737 barrels at the company's recently acquired Paramount, Calif.-based refinery.
Its acquisition of 40 Good Times Stores in El Paso, Texas allows Alon to maintain the leading market share in the area and follow its strategy of strengthening its integrated marketing sector, the company stated.
"We are very excited and pleased with the growth that Alon has achieved in the third quarter," said company president and CEO Jeff Morris. "We began the quarter as an owner of a single refinery with 70,000 barrels per day of crude oil capacity and ended the quarter owning four sour and heavy crude oil refineries with approximately 170,000 barrels per day of crude oil capacity." He added: "The integration of these businesses is going well and we have already identified significant growth and optimization opportunities."
For 2007, the company plans to maintain a throughput capacity of 140,000 barrels per day at its refineries, double the crude oil capacity prior to its acquisitions made this year, Morris said. The company also plans to reduce excess inventories by $50 million.
Headquartered in Dallas, Alon is an independent refiner and marketer of petroleum products through its four sour and heavy crude refineries in Teas, California and Oregon. Alon also markets fuel under the FINA brand name to 207 convenience stores in West Texas and New Mexico.