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Couche-Tard braces for hurricane Irma while rebuilding from Harvey's destruction

September 06, 2017 - 1:52 PM

LAVAL, Que. - Employees of Alimentation Couche-Tard (TSX:ATD.B) in the Florida region are bracing for hurricane Irma as Texas staff continue to try to recover from "devastating" damage from hurricane Harvey, CEO Brian Hannasch said Wednesday.

"The flooding and damage done by Harvey is among the worst in our U.S. history and we continue to monitor daily the situation to help out our employees, their families and our customers," he said on a conference call.

"As we approach the weekend, we're now preparing for hurricane Irma while at the same time hoping the storm loses strength and turns back into the Atlantic."

Alimentation Couche-Tard said it closed 123 stores because of Harvey and 24 were still shut down as of Tuesday.

Employees in the Florida region are topping up store inventories of fuel, water and batteries while hoping they don't see "panic buying" as occurred in San Antonio and Dallas where lineups for fuel forced people to wait as long as five or six hours, Hannasch said.

He said the company has had to deal with hurricanes since buying Circle K in 2003.

But its recent spate of acquisitions have increased its exposure, especially its deal that closed in June for San Antonio-based CST Brands which included more than 600 stores in Texas.

He said that deal and one for CrossAmerica Partners wholesale fuel network have "critically strengthened" the company.

Alimentation Couche-Tard has some property insurance for storms but doesn't carry business interruption insurance, he said.

"We view ourselves as being very, very geographically diversified and certainly that's an advantage to us with situations we faced with Harvey and potentially here with hurricane Irma," said Hannasch.

His comments came as Couche-Tard, which reports in U.S. dollars, announced it had $365 million or 64 cents per share of net earnings in the first quarter of its 2018 financial year.

After adjustments to exclude numerous items including the impact of the acquisition of CST and the sale of some of its assets, Couche-Tard says it earned about $380 million or 67 cents per share.

The adjusted earnings were up 17.5 per cent from the same time last year and total revenue including acquisitions was up 16.9 per cent at $9.85 billion as of July 23, about a month before devastating flooding began sweeping the U.S. Gulf states.

Analyst Irene Nattel said she has modestly increased adjusted earnings forecasts going forward because of the quarterly trend but added those predictions don't include potentially negative results due to Harvey and Irma.

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News from © The Canadian Press, 2017
The Canadian Press

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