Asda’s purchase of petrol forecourt business EG Group has “significantly” reduced the forecourt giant’s debt, despite its EBITDA declining in its third quarter.
The proceeds of the supermarket’s acquisition, which complete last month, have “significantly reduced the group’s net leverage,”with the group claiming this primed it for future “international growth and the energy transition”.
Yet, EG Group’s EBITDA still declined by 18% to $345m (£272.3m) in the three months to September 30, with the company attributing this result to the “impact of lower fuel volumes and a competitive environment.”
Grocery and merchandise were slightly up by 2.8% to $376m (£269.7m), while its food service gross profit jumped 24% to $221m (£174m), bolstered by increased sales activity and improved margins across the UK, Ireland and Europe.
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However, overall group revenue fell to £7.6bn from just over £8bn for the same period last year.
EG Group co-CEOs Zuber and Mohsin Issa, who also own Asda, said:“We made significant progress in the quarter with our deleveraging strategy and putting in place a sustainable capital structure for the medium to long-term, following completing the sale of the majority of EG Group’s UK business to Asda.”
It said it had addressed “all our remaining 2025 maturities through successfully completing our refinancing activities”.
The Co-CEOs pointed out the company’s key strategic priorities for its future, including growing gross profit in food service, grocery, merchandise businesses and its Tesla partnership.
“In the quarter, we also signed a ground-breaking deal with Tesla to purchase their latest ultra-fast charging units – demonstrating how we continue to progress our strategy on EVs and alternative fuels,” added the Ideas.
“The agreement will support the delivery of crucial EV infrastructure for drivers, building on the momentum of our rapidly-growing evpoint business – EG’s proprietary-branded ultra-fast vehicle charging proposition. We see a significant opportunity to deploy EV charging points across our diverse site network.”