DCC seeks warmth in cold snap
Published 09/11/2011 | 05:00
ANOTHER severe winter could help distribution group DCC offset an expected 7.5pc decline in profits that it has pencilled in for the current financial year, its chief executive has confirmed.
Tommy Breen said he was "keeping his fingers, toes and everything crossed" for a colder than normal winter in the UK, where the company generates the bulk of its revenue and controls about 16pc of the home oil distribution network.
In its last financial year, which ended in March, DCC recorded about €17m in additional profits due to high demand for home heating fuel as the prolonged cold snap shattered weather records.
DCC is predicting a more normal winter this year, and reckons earnings per share for the period will sink 5pc. That would equate to a 7.5pc decline in operating profits.
The company yesterday released interim results for the six months to the end of September that showed a 14.2pc fall in operating profit to €58.3m for the period after a milder than usual spring this year impacted demand for home heating fuel.
Operating profit at its energy division -- which includes oil distribution -- slumped 37.8pc to €18.7m in the first half.
Revenue at the group, which also distributes healthcare, consumer electronics and food products, including brands such as Kelkin, rose 10.8pc in the first half to just shy of €4.4bn.
DCC is also involved in waste management. Those divisions all performed in line or ahead of the corresponding period in 2010, with the environmental unit performing the best, with a 12.2pc rise in operating profit to €7.9m.