11th Jul 2024 09:56
(Alliance News) - DCC PLC on Thursday said its DCC Energy arm sold a majority stake in its liquid gas distribution business in Hong Kong and Macau at an enterprise value of USD150 million.
The Dublin-based sales, marketing and support services provider didn't say the exact size of the stake that was sold to Citadel Pacific Ltd. But DCC said it will receive USD105 million out of a total enterprise value, on a debt- and cash-free basis, of USD150 million, suggesting it sold a 70% stake.
DCC said that by retaining a minority stake in the Hong Kong and Macau business, it will benefit from the combination of the business with that of Philippines-based industrial group Citadel. DCC has the option to sell the remaining stake under an agreed mechanism after "a number of years".
The business operates under the Shell and Exxon brands. In the financial year that ended March 31, it distributed 183 million litres of liquid gas and booked an operating profit of USD19.5 million, DCC said.
That represented 2% of total DCC operating profit.
The announcement came as DCC held its annual general meeting on Thursday.
In a trading statement ahead of the AGM, DCC said operating profit was "modestly ahead" of a year before in the three months that ended June 30, the first quarter of its financial year.
Among business divisions, DCC Energy saw "good growth", driven by recent acquisitions. Operating profit was "modestly ahead" of a year before at DCC Healthcare but "modestly behind" at DCC Technology.
DCC continues to expects "strong operating profit growth and continued development activity" in financial 2025.
The company will release its interim results on November 12.
DCC shares were down 3.1% to 5,515.00 pence on Thursday morning in London. The wider FTSE 100 index was up 0.3%.
By Tom Waite, Alliance News editor
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