Tesoro to Complete Sale of Hawaii C-stores in September
SAN ANTONIO -- Tesoro Corp.'s sale of Tesoro Hawaii LLC received Federal Trade Commission clearance and will close in September, President and CEO Greg Goff said during today's 2013 second-quarter earnings call.
The sale includes 31 convenience stores and gas stations in the Aloha State to Par Petroleum Corp. All locations will continue to operate under the Tesoro brand name.
Refining and distribution assets are also part of the transaction, which carries a $75-million price tag.
Despite the sale of these 31 gas stations and convenience stores, Tesoro has been aggressively adding retail locations. The company added 835 dealer-operated ARCO locations on June 1 and also closed on its purchase of 174 retail stations from Thrifty Oil Co. late last year, Goff noted during today’s earnings call.
These new stores, in part, helped Tesoro enjoy a 3-percent rise in same-store fuel sales in its latest quarter ended June 30. However, retail fuel margins dropped significantly to 14 cents in the quarter.
Regarding in-store operations, Tesoro sold $48 million worth of in-store merchandise in its latest quarter, compared to $46 million in 2012's second quarter. The company's merchandise margin improved by 1 percent to 27 percent.
As of June 30, San Antonio-based Tesoro had 571 company-operated and 1,636 branded jobber/dealer convenience stores and gas stations. This total of 2,207 locations is 859 more than the company had exactly one year earlier.
Moving forward, Goff expressed tremendous confidence in Tesoro's retail division. He was especially excited about Tesoro's recent announcement that it secured the rights from ExxonMobil Corp. to use the Exxon and Mobil brand names at retail stations in northern California, Oregon, western Washington and Nevada. As CSNews Online reported, it also secured the rights to use the Exxon and Mobil brands throughout Minnesota, central and eastern North Dakota and northeastern South Dakota.
During today’s call, company executives acknowledged that it previously lacked a "premium" fuel brand in northern California and surrounding areas.
"Introducing the well-established Exxon and Mobil brands into the company's multi-branded retail network provides the capability to drive additional retail fuel sales volumes, further integrating Tesoro's refining and marketing businesses [and] supporting sustainably higher refinery utilization," Goff said.
Companywide, Tesoro earned a net profit of $238 million in its latest quarter vs. $363 million for the second quarter of 2012. Significant "turnaround activity" and a year-over-year decline in Mid-Continent and Canadian crude oil discounts were cited for the earnings decline."
"Our solid second quarter reflects a strong operating performance and continued execution of strategic plan," concluded Goff.