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SAN ANTONIO – Valero Energy Corp. received all necessary approvals from the U.S. Securities and Exchange Commission and will officially spin off its retail division as CST Brands Inc. tomorrow, May 1, Chairman and CEO Bill Klesse said today during the company’s 2013 first-quarter earnings call.
Valero stockholders as of April 19 will receive one share of CST Brands for every nine Valero shares owned. CST Brands will trade on the New York Stock Exchange starting May 2 under the ticker symbol CST.
CST Brands will operate approximately 1,900 convenience stores and gas stations, including 1,033 in the United States. Tomorrow, Valero will spin off 80 percent of CST Brands to its shareholders. The company revealed today it will sell off the remaining 20 percent as market conditions warrant in the next 18 months.
As CSNews Online previously reported, Kim Bowers will serve as president of San Antonio-based CST Brands. Bowers, who formerly served as Valero’s executive vice president and general counsel, was present on today’s earnings call, but was not questioned by analysts.
CST Brands will continue to operate its convenience stores under the current Valero Corner Store banner.
As for Valero’s final quarter as a combined company, U.S. operating income in its retail division rose to $18 million in the first quarter of 2013, ended March 31. That compares to an $11 million profit during the same time period last year.
U.S. merchandise sales rose $5 million to $293 million, while merchandise margins increased slightly to 29.7 percent.
Regarding retail fuel sales, the number of gallons sold per store each day improved slightly to 5,048. Fuel margins also rose to 8 cents, compared to 5 cents in Valero’s 2012 first quarter.
Companywide, Valero earned a Q1 profit of $654 million vs. $432 million in the same quarter of 2012. Klesse primarily credited refining margins for the year-over-year profit improvement.
"Valero achieved solid results in the first quarter," the chief executive noted. "Despite a heavy turnaround and maintenance workload, our refineries had good performance that was aided by wider diesel margins and crude oil discounts, plus contribution from our new hydrocracker at the Port Arthur, [Texas], refinery."