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BRENTWOOD, Tenn. — Although Delek US Holdings Inc. is “not in the business” of only owning 48 percent of any publicly traded company, it will remain patient in terms of valuation and synergies before it purchases the remaining 52 percent of Alon USA Energy Inc. it doesn’t already own, Chairman, President and CEO Uzi Yemin said during Delek US’ 2015 fiscal second-quarter earnings call Tuesday.
As CSNews Online previously reported, Delek US struck an agreement with Alon Israel Oil to acquire approximately 48 percent of the outstanding shares of Alon USA. This transaction closed May 14.
“We are willing to move as quickly as needed [in terms of purchasing the remainder of Alon],” said Yemin. “But we are patient, long-term investors and will do what’s best for our shareholders.”
When questioned about a timeline for purchasing the remainder of Alon USA, Yemin said he expects it would occur in less than four years, but could not speculate further.
Regarding its current holdings in Alon USA — the largest 7-Eleven licensee in the United States — Yemin stressed that Delek US took “an exciting step forward,” is “very pleased with the acquisition” and “very happy with the company.”
The chief exec added that Delek US will also look into other acquisition possibilities, with opportunities particularly opening up in logistics assets owned by master limited partnerships.
LARGE-FORMAT STORES ROBUST
Delek US' large-format convenience stores continue to drive its retail division, according to Yemin. The company is so pleased with these stores that it plans to open six more large-format stores in the second half of 2015.
Currently, Delek US has 64 large-format convenience stores among its 360 company-operated c-stores that operate under the MAPCO Express, MAPCO Mart, East Coast, Fast Food and Fuel, Favorite Markets, Delta Express and Discount Food Mart brands.
These 360 stores achieved a net contribution margin of $14.3 million, a decrease of $2.3 million vs. the same period in 2014. The company cited lower fuel margins and higher operating expenses for the decline.
Merchandise sales increased by $5.5 million to $109.2 million, while merchandise margins improved by 0.3 percentage points to 28.7 percent.
At the forecourt, Delek US’ retail division sold 116.2 million gallons of fuel in its second quarter ended June 30. Fuel margins dropped by 4 cents per gallon to 15.3 cents per gallon, however.
On a same-store basis, fuel gallons sold increased by 2.6 percentage points and merchandise sales improved by 3.6 percentage points year over year.
Companywide, Brentwood-based Delek US earned a second-quarter net income of $48.3 million, compared to net income of $54.9 million in its 2014 fiscal second quarter. Hedging losses were cited for the earnings decline.